It is hard to find anyone who doubts Canada’s need for immigrants, the only point of disagreement seems to be the number of immigrants Canada admits each year.
In September, the Department of Immigration’s annual tracking study found that four in 10 Canadians believed immigration quotas were too high, and 52 per cent of the surveyed agreed with the statement that “Canada should focus on helping unemployed Canadians rather than looking for skilled immigrants for our workforce.”
This poll obviously wasn’t taken into account because last week Minister of Immigration, Refugees and Citizenship Marco Mendicino announced a plan to bring in 1.2 million new immigrants over the next three years — a historic high for the country.
Few would argue with the need to bring in around 300,000 immigrants annually, but increasing that number at a time when 1.8 million people in Canada are officially categorized as unemployed (as of September) has taken many aback.
It seems to me that apart from politicians, immigration consultants, manufacturing and business associations, there is little appetite among many Canadians for high levels of immigration during an economic crisis brought about by COVID-19.
The rationale offered by Minister Mendicino is that since the pandemic struck, immigrants and international students played a prominent role as front-line workers in grocery stores, warehouses and in long-term care facilities.
Very supportive of high immigration numbers is the Canadian Manufacturers and Exporters association, who are on record stating that the immigration numbers for the next three years were too modest given the shortfall of admissions in 2020.
As the Business Council of Canada President and CEO Goldy Hyder said in a statement, “There is widespread agreement across party lines that immigration is essential to long-term economic growth. Newcomers bring energy, skills, new ideas and entrepreneurial spirit. They start companies, fill skill shortages, buy houses and pay taxes.”
The reality of the job market
According to StatsCan, as of August, there were still 2.2 million unemployed people in Canada. The unemployment rate for people aged 15 to 69 was 11.3 per cent. As of September, it hovered around nine per cent.
But Canada’s unemployment rate would likely be much higher had it not been for the Canada Emergency Wage Subsidy (CEWS), which has ensured that employers continue to keep on their rolls 3.7 million Canadian workers.
The CEWS will continue until June 2021, after which a spike in unemployment is a distinct possibility. Most companies across the country are restructuring their businesses, reducing staff and investing more in automation.
Amazon, one of Canada’s largest employers, with 21,000 full- and part-time staff, as well as its rivals are increasingly requiring warehouse employees to get used to working with robots. Amazon alone now has more than 200,000 robotic vehicles it calls “drives” that are moving goods through its delivery-fulfilment centres around the U.S. That’s double the number it had last year and up from 15,000 units in 2014.
It is quite likely that in a matter of years, most manufacturing companies and warehouses here in Canada won’t be needing more than a few dozen workers to oversee the robots.
Another big employer, Loblaws, began investing heavily in artificial intelligence and automation at the company’s offices, distribution centres and stores in 2019.
So, it is quite possible that those politicians and mostly small-business owners who are up at night worrying about impending labour shortages are not taking into account the rapid pace at which artificial intelligence and other technologies are expected to significantly reduce their staffing needs.
Working from “home” could mean anywhere
Thousands of employees working at some of Canada’s top companies are expected to work from home even after the pandemic passes. Technological improvements over the past year has made it possible for any company to outsource an even greater number of jobs.
There is little stopping a company from hiring a software engineer anywhere in the world and giving him or her the option of working from “home” without setting foot in Canada. Technology makes “attracting” the best brains and talent from around the world possible on a scale that could never have been imagined.
Immigration has historically been a convenient way to address labour shortfalls which could last for decades, however in today’s fast-changing economy, it may not be wise to bring in permanent residents to essentially do jobs that are expected to become redundant in a matter of years.
By 2034, immigration will account for 100 per cent of Canada’s population growth, as the number of deaths is expected to exceed the number of births. There will have to be a steady influx of immigrants, but not in the numbers we see today. While most Canadians have been led to believe that fewer immigrants would lead to the collapse of the economy, perhaps one could point to Japan which is facing a steep population decline. In 2014, its population was 127 million and is expected to shrink to 107 million by 2040. Not wanting to stoke xenophobia, the government has not resorted to mass immigration despite a growing labour shortage. There is more acceptance of automation and robots than for immigration and companies are automating at record speed.
At some point in the near future, Canada will have to become more creative when it comes to dealing with its labour shortages.
A case to calibrate immigration with the economy
There is plenty of evidence that in previous Canadian recessions new immigrants suffered high rates of chronic unemployment and underemployment, sometimes with lasting effect — a phenomenon referred to as the “scarring effect.”
For example, immigrants who had been in Canada for less than five years preceding the 2009 economic downturn suffered job losses at a rate far more than their Canadian-born peers. During the current COVID-19 pandemic, several visible minority groups have significantly higher rates of joblessness, such as South Asian (17.8 per cent), Arab (17.3 per cent), and Black (16.8 per cent) Canadians.
Whether Canada sinks deeper into recession after government subsidies dry up in mid-2021 or rebounds is anybody’s guess. Public hostility toward immigrants could rise and xenophobes could blame them for worsening a bad economic situation when immigrants themselves could well be hurting more than the average out-of-work Canadian.