New Immigrants and Temporary Residents Drive Up Canada’s Unemployment Rate

Temporary residents and new immigrants raise unemployment rates because they often struggle to find jobs, despite being brought in to address workforce shortages. Temporary residents, such as foreign workers, international students, and refugees and asylum seekers remain unemployed at a higher percentage than all workers where in June it stood at 11%. Unemployed immigrants with arrived within the past five years are also faced with some difficulties as they have a 12% unemployment rate. Meanwhile, if you are planning to visit India, you can avail cheap tickets to India from Canada with Tripbeam, ensuring a great deal and excellent service.

The Government’s Response to Rising Unemployment

Prime Minister Justin Trudeau’s administration can moderate the increase of non-permanent residents without significantly impacting the labor market, according to Macklem. The government aims to reduce this group by 20% over the next three years.

Effects on the Unemployment Rate

Bloomberg’s analysis indicates that the impact of temporary residents and recent immigrants on the overall unemployment rate has more than doubled in under two years. Despite comprising only 10% of the labor force, these groups now make up nearly 20% of the unemployed.

Data Reporting and Trends

Statistics Canada does not provide a direct unemployment rate for temporary residents; instead, it is derived from other data available from the agency. The labor market data for immigrants is reported on a three-month average basis without seasonal adjustments.

Thus, the June unemployment rate for all workers is reported at 6.2%, differing from the more frequently cited 6.4% figure, which is seasonally adjusted and reflects a single month. Bloomberg’s analysis shows that the unemployment rate for temporary residents reached a record low of 5.7% in November 2021.

Unintended Consequences of Relaxed Restrictions

The Trudeau government’s decision to relax restrictions for foreign students and workers during the pandemic may be having unintended consequences. While additional labor was crucial for addressing job shortages in 2022, many newcomers are now facing joblessness as those positions have been filled.

Future Outlook

Holt suggests that as the number of temporary residents declines, unemployment rates are expected to drop as well. “Reducing this segment of immigration might lead to a slight decrease in the unemployment rate,” he noted.

Integration Challenges for Newcomers

Integration into Canada’s labor market can be slow for newcomers, with their unemployment rate currently more than twice that of Canadian-born workers. However, after a decade or more, their employment rates tend to align closely with those of native-born Canadians.

Polarization of the Labor Market

According to Brendon Bernard, an economist at Indeed, the labor market is becoming increasingly polarized. Canadians with stable jobs are faring well, with minimal layoffs, while gig workers and new job seekers are encountering greater difficulties. “The cooling of employer hiring and the surge in job seekers has created a challenging environment,” Bernard said. Also, if you have spontaneous travel plans, you can book last minute flights from Canada to India with us. We ensure the cheapest pricing and best service.

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