In late 2017 the Canadian Government set-out a very ambitious goal for our Immigration Policy in Canada. The country would not only admit nearly 1 million new immigrants over 3 years but also admin 350,000 new immigrants in the year 2021 alone. Although the raw numbers may seem small, 350,000 people is nearly 1% of Canada’s current population. This goal has been turning heads globally as many other countries are trying to reduce immigration numbers while Canada increases the number of new immigrants per year. So why is Canada embracing new immigrants while other countries push them away and more importantly what does this mean for our current residents?

Low Fertility Rate

1971 was the last time in Canada where the fertility rate matched the replacement level. The fertility rate tells us how many hypothetical children a female between the age of 15 and 49 will have. The replacement level tells us where this rate needs to be in order to replace our aging population. In essence if the fertility rate remains below the replacement level for a long period of time as it has in Canada, the population will naturally begin to shrink without immigration. It is thanks to our high immigration levels that Canada’s population is actually growing rather than shrinking.

Although our population may be growing, it is still not growing fast enough to replace all the retiring baby boomers in the job market. This is not only putting extra pressure on corporate pension plans and the Canada Pension Plan (CPP) but also causing our unemployment rates to drop to record lows as our overall economy is thriving.

Low Unemployment Rate

Last month the Canadian economy added 27,700 more jobs causing the unemployment rate in Canada to fall to a record low 5.4%. This is following an April where the economy added a record 106,500 jobs. Although the job numbers of May when broken down aren’t as great as they are on the surface, for the month of April, the numbers were amazing from every angle and breakdown. Such low unemployment is amazing right? Yes in a sense it means wages will start going up and the general public will benefit in the short-term.

However, an unemployment rate that is too low also means businesses will struggle to find good talent to fill there roles and that eventually the businesses will not be able to perform at full capacity because of the lack of full employment. Businesses will instead need to scale down if they are not able to find the right people for these jobs. In a sense the Canadian economy will be performing so well it will burn out. Immigrants are the reason our GDP and economy are growing while allowing Canada to maintain a healthy unemployment rate. Without immigration, less people in Canada would be employed so less people would be spending there hard earned dollars in our local economy and thus it would be unlikely that Canada’s economy would be able to maintain it’s growth rate without coming to a crashing halt.

The US Unemployment Rate

Many people are quick to point out that the US unemployment rate is much lower than Canada’s so if they burnout problem is real then we must be still far away from that burnout level. There is 1 very important thing to note here, the US and Canada calculate there unemployment rates very differently. In both Canada and US the very basic definition of being unemployed is the same.

To be considered “Unemployed” a survey respondent must not have done any work for pay during a particular week of the survey month, must be available for work, and – most crucially – must have done something to find a job during the last four weeks. – The Globe and Mail

However where the key difference comes into play is what qualifies as doing something to search for a job. In the US only active searching qualifies you to meet this criteria whereas in Canada both active and passive (simply browsing through job listings) searching qualifies you for this. For more details on the differences you can read this Globe and Mail article.

Cognitive Diversity

Canadian are no stranger to diversity in the traditional sense. As a country we embrace different types of people, diversity and multiculturalism is a part of Canada. However, cognitive diversity is something many people do not understand. While someone that is born or raised in Canada with a diverse background adds significant value to the workplace, we all went to the same elementary and high schools and were taught to think the same way. That is not to say differences in age, gender and ethnicity do not provide cognitive diversity. However, people arriving to Canada from various countries can bring very different ways of thinking and doing things. This creates cognitive diversity in the workplace and allows Canadian companies to better succeed.

A high degree of cognitive diversity could generate accelerated learning and performance in the face of new, uncertain, and complex situations, as in the case of the execution problem we set for our executives. – Harvard Business Review

 

 

 

 

 

 

 

Sources: Bloomberg; CTV News; CBC; CIC News; Bank of Canada; The Globe and Mail; The Globe and Mail; Statistics Canada; Miles Corak; Forbes; Forbes; Emergenetics; The Star; HBR; Wikipedia Commons;