Lalande | Here is a two-step plan to rebuild Canada’s economy and it isn’t centred on our natural resources

2025/06/13 Leave a comment

Step One repeats the previous tired messages, Step Two looks more sensibly looks forward on how to capitalize on the Trump administrations attacks on universities, scientists and researchers:

Canada’s premiers and prime minister want the world to know that they are ready to build: pipelines, a revitalized military, new high-speed transit, an energy corridor.

But if Canada is to build a truly national economy and to effectively respond to the Trump administration’s economic instability and isolation, it needs a larger, more skilled, and more adaptive workforce.

And there is a clear, achievable two-step strategy we must take to get there.

Step One

The first strategy is to reverse course on the government’s immigration cuts and to build a smart, long-term population strategy.

Last fall, the federal government announced a 20 per cent reduction in immigration levels in its 2025—2027 levels plan. It was a short-term political decision that will leave long-term economic scarring. Research from the Parliamentary Budget Officer shows this policy will reduce Canada’s nominal GDP by $37 billion over just three years. As detailed in Century Initiative’s latest report, cutting immigration accelerates economic decline by constricting labour supply and choking growth.

This contraction is unfolding against the backdrop of a demographic “perfect storm”: a rapidly aging population, a declining fertility rate, and severe labour shortages across critical sectors.

We can’t build the strongest economy in the G7 if our workforce is shrinking, particularly in high-growth sectors.

Canada cannot navigate this storm without a serious plan. We need strategic, well-managed immigration designed not only to meet immediate gaps but to build the long-term foundation for shared prosperity.

Realizing this vision will require purposeful collaboration between different levels of government, including building on intergovernmental successes like the provincial nominee program. Further, business, academia, and civil society all have a role to play leveraging their respective reach, resources, and networks.

This is the plan that enables every other plan. Infrastructure. National defence. Clean tech. Housing. None of it is possible without a strong tax base and a skilled, growing talent pool.

Step Two

The second strategy is to launch a targeted U.S. talent attraction strategy.

Flagrant and damaging threats from the Trump administration against Harvard and other academic institutions, the defunding of research institutions like the National Science Foundation, the gutting of visa programs, and the political targeting of international students have all weakened America’s standing as a magnet for innovation.

Taken together, these actions have opened the door in the global war for talent. As the saying goes, “Never interrupt your enemy when he is making a mistake.”

But we ought to capitalize on that mistake. As the U.S. turns inward, we should position ourselves as a global safe haven for scientists, entrepreneurs, and students who no longer feel welcome — or funded — south of the border.

This means being strategic about research opportunities, targeting U.S. universities with visa programs and recruitment campaigns for high-performing graduates. 

While appropriately managing international student capacity, we should simplify employment pathways for international students and postdocs in tech, AI, clean energy, and health sciences.

Settlement services should be rolled out in partnership with cross-border companies who are willing to relocate here. And regional accelerator hubs should bolster our fastest-growing sectors — connecting immigration, innovation, and talent with opportunity.

Canada’s greatest asset isn’t just our natural resources or trade deals — it’s our ability to build a fair, open, future-ready society. That takes people. And in this moment, when the U.S. is retreating from talent, science, and global leadership, we have the opportunity — and responsibility — to step up.

Source: Opinion | Here is a two-step plan to rebuild Canada’s economy and it isn’t centred on our natural resources

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Canada Case Study Explores the Limits of Immigration to Ease Demographic Decline

2025/03/01 Leave a comment

Good and relevant study by Dan Hiebert on the need for realism and a shift towards population policy framework:

High-income countries globally face a stark demographic transition as their populations age and fertility rates decline, with key implications for productivity and the maintenance of retiree benefits if tax bases decline as workforces shrink. Questions remain about how and to what extent immigration can help slow this transition and soften the impact on labor markets. 

Canada offers a unique vantage point on the role that immigration can play in easing demographic decline—and the potential drawbacks. Over the past decade, rising permanent and temporary migration accounted for the entirety of Canada’s labor force growth. But the rapid pace of change has come with challenges. By 2024, Canada’s historic embrace of immigration had cooled amid public concerns about its impact on housing costs and public services. 

In a new report out today for the Migration Policy Institute’s Transatlantic Council on Migration, respected Canadian researcher Daniel Hiebert investigates the efficacy of immigration in addressing population change and the old-age dependency ratio. The report examines Canada’s demographic challenges (its total fertility rate of 1.26 children per woman is among the lowest rates globally) and recent changes in migration policymaking before exploring the consequences of setting immigration rates at different levels. The report uses six scenarios for admissions and population projections over the next half-century that were commissioned from Statistics Canada. 

The report finds that while the six scenarios, which range from high- to near net-zero immigration, would produce very different overall population sizes by 2046 and 2071, the old-age dependency ratio would rise even under the highest immigration rate. “These scenarios point to an important lesson: Immigration can grow the population and slow the effects of falling fertility, but it is less efficient at changing the age composition of the population,” writes Hiebert, emeritus professor of geography at the University of British Columbia. That is because immigrants themselves age and eventually retire alongside their native-born peers. 

To tackle the rising old-age dependency ratio and the prospect of shrinking workforces, policymakers would need to also consider other interventions, such as raising the retirement age, Hiebert writes. 

The report, Understanding the Impact of Immigration on Demography: A Canadian Case Study, argues that for immigration policy to effectively tackle Canada’s challenges, policymakers will need to frame a long-term strategy that considers a number of intertwining realities, including: 

  • Calibrating immigrant admissions together with decisions about social spending and investment in housing stock and infrastructure. 
  • Taking a longer lens than the standard three-year population plan, given the consequences of changing immigration targets play out over decades. This also means recognizing the need for different policy interventions as “fast” regions such as large cities face pressures on housing and infrastructure from above-average population growth, while “slow” regions such as rural areas will need help navigating depopulation and rising old-age dependency ratios. 
  • Effectively communicating with the public to set appropriate expectations for immigration. 

“Canada is frequently seen as an exceptional case, globally, with a population that has been willing—enthusiastic, even—to accommodate a relatively high rate of immigration. This consensus has become frail and the Canadian government (like others around the world) has changed its tone on immigration, acknowledging that there are costs to immigration-led population growth,” Hiebert writes. “Nevertheless, demographic challenges are resolute and ignoring them will, eventually, also carry economic and political consequences.” 

While few governments globally have clearly and forcefully articulated the unprecedented levels of old-age dependency that are looming, and the resulting painful economic adjustments ahead, embarking on a national conversation around demography, engaging with the tough policy trade-offs involved and building a population strategy could help raise Canadian public awareness, the author concludes.

Read the report here: www.migrationpolicy.org/research/immigration-demography-canada. 

Source: Canada Case Study Explores the Limits of Immigration to Ease Demographic Decline

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Restaurants and stores say government aid is to blame for a labour shortage — but the hard data tells a different story

2021/08/09 Leave a comment

Of note, given current discussions on whether our immigration system needs to be rebalanced towards the lower skilled and paid:

Relaxed health rules are allowing thousands of restaurants and stores to reopen. But employers are already complaining they can’t find enough workers, especially in hospitality and retail. Some are offering signing bonuses, redistributing tips and making other special efforts to attract staff.

Employers like to point the finger at government income supports that helped people through the pandemic, like emergency recovery benefits (now extended to October) and expanded eligibility for EI payments. Employers complain these programs reduce the incentive to accept low-wage, irregular work in restaurants and shops. Many also want Ottawa to expand the Temporary Foreign Worker program, so they can access low-cost labour from other countries.

To be sure, it is an operational headache for restaurants and stores to reconnect with former employees after months of closure, and they’re all trying to do this at the same time. But the hard data does not support the claim of a generalized labour shortage.

After all, unemployment remains elevated: the latest Statistics Canada reportpegged the official rate at 7.5 per cent. And other pools of hidden unemployment (including people working very short hours, and people who left the labour force during the pandemic) push the true unemployment rate towards 15 per cent.

Wages in stores and restaurants remain very low, and are not rising, which should happen if labour was genuinely scarce. In hospitality, for example, the median wage is $15 per hour (barely matching the legal minimum in many provinces), and average weekly earnings are just $500 per week (reflecting inadequate hours of work as well as low wages).

There is no sign wages are improving, despite anecdotes in the media. To the contrary, wages have grown more slowly in retail and hospitality than the overall economy since the pandemic. Thus the wage penalty for workers in these sectors is getting worse, not better.

When your industry offers less than half the going wage, you shouldn’t be surprised you have trouble attracting workers. That’s like me offering $100,000 for a Lamborghini (less than half the list price), and then crying shortage when no-one will sell me one.

It’s no mystery how to recruit and retain a more stable workforce: offer better pay, stable shifts, decent benefits, and improved training and safety. Inadequate and irregular hours are actually a bigger disincentive than low hourly wages (almost half of hospitality staff work part time). Reorganizing schedules to allow predictable shifts and more full-time roles would support genuine career opportunities in these industries, rather than a culture of lousy precarious work.

Other countries have shown that service sector work can offer stable middle-class career paths. Canada could do the same, but only if we prevent employers from taking the easy out — namely, providing them with still more desperate workers willing to work for any wage. If governments respond to complaints about a labour shortage by cutting income supports or importing migrant labour, that will only short-circuit the improvements in job quality these sectors ultimately need.

Only once did Canada’s economy truly run out of workers. That was during the Second World War, when a massive, government-funded war effort ended the Depression and put every able worker into a productive job. We aren’t anywhere near that situation today, but we could be, if we wanted to. We could launch an ambitious post-COVID national reconstruction plan, featuring massive and ongoing investments in green energy, affordable housing, and human and caring services. That would create hundreds of thousands of jobs, end mass unemployment and improve living standards in the process.

But creating hundreds of thousands of good jobs is actually the last thing low-wage employers want. That would only make it all the harder for them to recruit cheap, desperate labour.

In sum, there’s no “labour shortage” in Canada today, nor is one on the horizon. Governments should ignore these phoney complaints, and instead encourage employers to respond to staffing problems like any other hard-to-find commodity. When something is truly scarce, smart businesses find ways to use less of it (in this case through automation and efficiency measures). They emphasize quality over quantity. And, at the end of the day, they pay more.

In the long run, this will drive productivity growth, innovation and better jobs. And that’s a good thing, not a bad thing.

Jim Stanford, director of the Centre for Future Work in Vancouver, is a freelance contributing columnist for the Star. Follow him on Twitter: @jimbostanford

Source: Restaurants and stores say government aid is to blame for a labour shortage — but the hard data tells a different story

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ICYMI: Now more than ever, political platforms should be built on the foundation of a long-term policy framework

2021/08/09 Leave a comment

Irrespective of one’s political leanings or whether one agrees with the specific recommendations, it would be nice if elections and politics provided space for more serious policy discussions with respect to longer-term issues, not just the productivity and investment issues highlighted here.

Ironically, their focus on productivity and GDP per capita raises questions regarding the increased immigration levels of the government.

The challenge, however, is how to do so given political party positioning, social media soundbites and the difficulty of doing so:

When presenting their policy platforms in the federal election we’re all expecting soon, political parties may be tempted to focus on capturing headlines. Resisting short-termism is not easy in the current era of growing populism and focus-group-driven politics, but the stakes for our country’s economic future are high.

We’re coming out of an unprecedented (and unsustainable) period of fiscal expansion to alleviate the economic ravages of a global pandemic. In addition, we face long-standing challenges including rapid technological transformation, climate change, aging demographics, changing geopolitical dynamics and more than a decade of secular stagnation. Now more than ever, political platforms should be built on the foundation of a long-term policy framework.

Progress is a choice. It doesn’t happen on its own. From 1945 to 1975, Canadians saw their average real weekly earnings grow at a rate that more than doubled every 28 years. This amazing level of economic growth came in large part as a result of policy choices we made as a country. There was intentionality on what we were trying to achieve together. We need a renewed commitment to our long-term economic future.

Political platforms should be formed based on long-term economic objectives with platform commitments reflecting their potential impact on those objectives. Critically, a strong accountability mechanism, such as a review of outcomes relative to commitments by the Parliamentary Budget Officer, would hold the ruling party accountable to its promises.

Which economic objectives should take priority? Here are two that could have a significant impact:

Real median per-capita income should rise by at least 5 per cent over every five-year period. This may not seem particularly ambitious, but in the five years leading up to 2019 (the most recent data available) median per-capita income only rose 3.4 per cent. Since 2009, there have only been three years in which the rolling five-year window has seen growth of 5 per cent or more. Focusing on median per-capita income ensures that the gains from growth are shared broadly across the population rather than benefiting only a few. To achieve this, policies would need to demonstrate how they plan to sustainably raise growth and improve labour-market outcomes for all segments of the population. We need a shift from consumption spending to greater focus on productive investments: applied public R&D in fast-growing sectors, child care, reskilling workers for the digital economy and helping our resource sector transition to a low-carbon future. Evaluating performance over a five-year window would allow for inevitable cyclical variations that can lead to large annual swings.

Commit to halving the investment gap with OECD countries. There is a well-known and well-documented lack of business investment in machinery, equipment and intellectual property in Canada. There are of course many firms that invest a lot, but by and large economy-wide data consistently show that Canada ranks near the bottom of the pack among members of the Organization for Economic Co-operation and Development. In relation to GDP, business investment of this type is barely more than half what it is in the United States, and just under two-thirds of what it is in the average OECD country. Moreover, as the C.D. Howe Institute notes, Canadian business investment per available worker also badly lags that in the U.S. and other OECD countries. This underperformance in business investment directly contributes to our poor productivity performance, and loss of competitiveness. It is no coincidence that Canada’s export competitiveness weakened in recent years as its share of the U.S. market declined. Over the past two decades, Canadian exports have risen at just half the pace of the overall economy.

In addition, while the United States and the United Kingdom are making ambitious moves on advanced industries and increasing their R&D investments, Canada’s approach is still tentative. In an economy increasingly dependent on intangible assets such as data and digital services, innovation will be a key driver of growth. Building Canada’s sectoral capabilities in advanced (or innovation) industries is becoming paramount. These industries encompass technology at its broadest and most consequential. High productivity ensures that the average worker employed in an advanced industry earns a yearly wage nearly 50 per cent higher than the average Canadian worker.

If pursued, these objectives would represent bold and firm commitments to sustainably raising our standard of living. Parties may of course disagree on the means to achieve them, but they can hardly ignore them. The policy choices that we make in the next few years will shape the Canada of 2050, and our country’s standing in the global economy.

Jean-François Perrault is Scotiabank’s chief economist and a former assistant deputy minister at the Department of Finance. Robert Asselin is senior vice-president of policy at the Business Council of Canada and former policy adviser to two prime ministers.

Source: Now more than ever, political platforms should be built on the foundation of a long-term policy framework

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Cost Of Racism: U.S. Economy Lost $16 Trillion Because Of Discrimination, Bank Says

2020/09/25 Leave a comment

From Citigroup:

Nationwide protests have cast a spotlight on racism and inequality in the United States. Now a major bank has put a price tag on how much the economy has lost as a result of discrimination against African Americans: $16 trillion.

Since 2000, U.S. gross domestic product lost that much as a result of discriminatory practices in a range of areas, including in education and access to business loans, according to a new study by Citigroup. It’s not an insignificant number: By comparison, U.S. GDP totaled $19.5 trillion last year.

And not acting to reverse discriminatory practices will continue to exact a cost. Citigroup estimates the economy would see a $5 trillion boost over the next five years if the U.S. were to tackle key areas of discrimination against African Americans.

“We believe we have a responsibility to address current events and to frame them with an economic lens in order to highlight the real costs of longstanding discrimination against minority groups, especially against Black people and particularly in the U.S.,” wrote Raymond J. McGuire, a vice chairman at the bank and the chairman of its banking, capital markets and advisory team.

Wall Street itself has also faced accusations for years of discriminatory practices against African Americans, such as limiting approval for mortgages or not providing enough banking options in minority neighborhoods, which are among the damaging actions identified by Citigroup researchers.

Specifically, the study came up with $16 trillion in lost GDP by noting four key racial gaps between African Americans and whites:

  • $13 trillion lost in potential business revenue because of discriminatory lending to African American entrepreneurs, with an estimated 6.1 million jobs not generated as a result
  • $2.7 trillion in income lost because of disparities in wages suffered by African Americans
  • $218 billion lost over the past two decades because of discrimination in providing housing credit
  • And $90 billion to $113 billion in lifetime income lost from discrimination in accessing higher education

As a result, Citigroup urges a slew of actions to reverse discriminatory practices and boost GDP over the next five years, including addressing the wage gap suffered by African Americans and promoting diversity at the top within banks and companies.

Citigroup’s recommendations aren’t new: Various studies have shown similar findings, and experts have called for similar action for years, though so far progress has been slow.

Source: Cost Of Racism: U.S. Economy Lost $16 Trillion Because Of Discrimination, Bank Says

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Ground shifts in Indonesia’s economy as conservative Islam takes root

2019/08/29 Leave a comment

Of note:

Arie Untung, a former video jockey for the Indonesian offshoot of MTV, says he used to drink alcohol regularly and – back then – was a jeans-clad, spiky-haired rocker who was only a nominal Muslim.

But he says his religious fervor was rekindled by online preachers promoting more conservative interpretations of Islam, which are gaining ground in the world’s most populous Muslim-majority country and bringing profound changes in its economy.

Untung has now reinvented his career by linking up with other celebrities to run a sharia (Islamic law)-friendly entertainment business in Southeast Asia’s biggest economy, including hosting popular Muslim prayer festivals.They are part of a growing body of “born-again” Muslims driving social changes that are also having an economic impact, encouraging everything from Muslim-targeted housing to sharia banking.

“We have become some sort of like endorsers, the endorsers of Allah,” said Untung, who now sports a beard and a more restrained hair style, referring to his celebrity colleagues.

The celebrities, who jointly have over 20 million followers on Instagram and Twitter, are part of what has become known as the “hijrah” movement in Indonesia and, according to Untung, aim to make an Islamic economy more mainstream.

Hijrah, Arabic for migration, is used to refer to Prophet Mohammad’s journey from Mecca to Medina to escape persecution, and represents the beginning of the Muslim era.

Indonesia’s 215 million Muslims have traditionally been moderate and their beliefs often included elements of mysticism and local customs.

The number of conservatives is now growing and more companies have embraced Islamic branding and marketing, said Edy Setiadi, secretary general of the non-profit Shariah Economy Society.

Restaurants have raced to secure halal certification, which means they comply with Islamic law. There are now hospitals where drugs are halal compliant and shampoos claiming to be suitable for headscarf wearers. Japan’s Sharp sells refrigerators labeled halal.

“PEACE OF MIND”

Many born-again Muslims are young, earn regular salaries and prepared to go the extra mile to feel they are living an Islamic lifestyle, said Setiadi.

“They don’t think about how much they spend, they just want peace of mind,” he said in an interview at his office in Jakarta.

Conservative Islamic groups were largely repressed during the 32-year rule of strongman Suharto, but since his downfall in 1998, they have emerged as a growing force, although officially, Indonesia remains secular.

During April elections, President Joko Widodo, a moderate Muslim, picked elderly conservative cleric Ma’ruf Amin as his running mate, a move seen as helping him secure more Muslim votes for his re-election.Amin, chairman of the Ulema Council of Indonesia, a group of clerics, has promoted laws for Islamic banking and mandatory halal certification and his vice presidency may usher in more incentives for the Islamic economy, analysts say.

A report by Thomson Reuters, the parent of Reuters News, estimated Indonesians spent more than $219 billion on halal food, tourism, fashion and cosmetics in 2017, compared to $193 billion in 2014.

Islamic banking assets were 486.9 trillion rupiah ($34.26 billion) by June 2019, representing more than 300% growth in the last nine years, even though they remain less than 6 percent of total banking assets at around $580 billion.

There has been particularly rapid growth in demand for halal food, modest fashion and Islamic travel, Dody Budi Waluyo, a deputy governor of Bank Indonesia (BI), told Reuters.

“BI sees a potential growth in the sharia economy amid demand for products certified halal and a halal lifestyle,” said Waluyo. He said the central bank and the government were trying to pin down the sharia economy’s share of GDP, and could not vouch for the accuracy of some estimates of the sector accounting for 40%.

MUSLIM HOUSING

Some housing developments now target Muslims, like the Az Zikra gated community near Jakarta, which offers 400 households “the chance to follow in the footsteps of Prophet Muhammad.”

At its center is a mosque, built using a grant from late Libyan dictator Muammar Gaddafi, and it hosts an archery range and horse riding, both pastimes regarded as favored in Islam.

In 2014, Indonesia adopted measures to make companies label whether products are halal, although the deadline was pushed from last year by as much as 7 years amid concerns from industry that the move could cause chaos and threaten supplies.

Still, marketing of halal products is becoming mainstream.

At a halal exhibition held in Jakarta last month, a foundation cream from Korean cosmetics line SOS Beauty was being offered to women in colorful headscarves.

“This doesn’t close your pores, so when you go to wudu, this will let the water come through,” said Lisa, a company representative, referring to the Islamic ritual washing of parts of the body, including the face, before prayers.

At Thamrin City, a popular 10-storey mall in central Jakarta, Muslim fashion stalls have taken over space in areas once occupied by sellers of traditional Indonesian batik.

Yesi, who runs a shop there called “Al-Fatih”, said her popular products were khimars, headscarves that go down to the stomach, and niqabs, veils that cover most of the face, at prices ranging from 20,000 rupiah to 200,000 rupiah ($1.40-$14).

Media Kernels Indonesia, a data consultancy, said its research showed words like “hijrah” and “halal” were mentioned on social media over 5,000 times in the past 30 days indicating Islamic phrases were being used more in product marketing.

“This wouldn’t happen without the demand or trend in society,” said company founder Ismail Fahmi.

Source: Ground shifts in Indonesia’s economy as conservative Islam takes root

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