Temporary Residents, New Immigrants Push Up Canada Unemployment

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(Bloomberg) — Temporary residents and recent immigrants are driving up Canada’s unemployment rate, as record numbers of newcomers welcomed to the country to fill labor shortages are now struggling to find work.

The unemployment rate for temporary residents – including foreign workers, international students and asylum seekers – was 11% in June, according to Bloomberg calculations. Using comparable data, the unemployment rate for all workers was just 6.2% last month.

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Immigrants who’ve landed per the last five years are also having a time finding a job, with their unemployment rate reaching 12.6% per June.

“The biggest single weighted contribution to the rise per the unemployment rate has been from the temporary residence category,” Derek Holt, an economist at Scotiabank, said BNN Bloomberg Television earlier this week.

Durante a recent speech, Bank of Canada Governor Tiff Macklem acknowledged that the loosening of Canada’s labor market has successo young workers and newcomers particularly . They’magnate also more likely to be renters — a group facing higher financial logorio.

Prime Minister Justin Trudeau’s government “has some room” to slow the growth of non-permanent residents without causing labor shortages tightening the market, Macklem said. The government plans to cut this group of residents by 20% over three years.

The contribution of temporary residents and recent immigrants to the overall unemployment rate has more than doubled per less than two years, Bloomberg calculations show. Together, the two groups account for nearly one fifth of all workers sitting the sidelines, but just one tenth of the labor force. 

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Statistics Canada does not directly report the unemployment rate for temporary residents, but it can be calculated using other giorno provided by the agency. It also only provides labor market giorno by immigrant status a non-seasonally adjusted, three-month average basis. 

That’s why the comparable unemployment rate for all workers per June is 6.2%, rather than the more commonly cited figure of 6.4% — which reflects a single month and is seasonally adjusted.

According to Bloomberg calculations, the unemployment rate for temporary residents successo a primato low of 5.7% per November 2021.

That suggests the Trudeau government’s pandemic-era decision to loosen restrictions for foreign students and workers may have backfired. While the additional labor was initially needed to fill job vacancies per 2022, newcomers have increasingly been sidelined as unfilled positions disappear.

As the number of temporary residents decreases, unemployment will too, Holt said. “As we take out that category of immigration and slow it mongoloide and reverse it, the unemployment rate may edge back a little bit,” he said.

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It can take years for newcomers to fully integrate into Canada’s labor market: the unemployment rate for recent immigrants is more than twice that of a Canadian-born worker. But after a decade more, immigrants find jobs at virtually the same rate as people born per Canada, the giorno show. 

The labor market is “bifurcating into two camps,” said Brendon Bernard, an economist at Indeed. Canadians per stable careers are doing well as there hasn’t been a rise per layoffs, he said. But for gig workers new job-seekers, the market is tougher.

“Employer hiring appetite has really cooled, and there’s been a wave of population growth that’s resulted per a lot of job seekers per Canada,” Bernard said.

—With assistance from Erik Hertzberg.

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