Canada’s COVID-spurred immigration backlog is hurting its economic growth, survey suggests

Valid concern. But perhaps it would be more helpful to recommend reducing levels to focus on timely approval processes particularly for the economic class that IRCC can manage, and do not excessively strain housing, infrastructure, healthcare, the environment etc.

Programs highlighted by Business Council members: the global talent stream, federal skilled worker program and the Canadian experience class.

Immigration backlogs and processing delays have become a top barrier to Canadian employers seeking to attract talent and the situation is impeding economic growth and business investment, a new survey suggests.

The report by the Business Council of Canada found 80 per cent of surveyed employers were having trouble finding skilled workers, with labour shortages in every province and territory — with it being most pronounced in Ontario, Quebec and British Columbia.

Canada’s immigration system has been upended during the pandemic, with applications piling up while staff worked remotely in a restricted capacity. There’s not a single program without a backlog and processing times have gone off the roof, doubling or tripling what they were pre-COVID.

According to CIC News, an online immigration information website, Canada’s immigration backlog has grown to 2.4 million people, including 522,047 awaiting permanent residence; 1.47 million waiting for temporary residence on work and study permits; and almost 400,000 for citizenship.

Sixty-seven per cent of employers said they are being forced to cancel and/or delay projects; 60 per cent are suffering revenue loss; 30 per cent are relocating work outside of Canada; and 26 per cent are losing market share as a result, said the business council, whose member companies employ 1.7 million Canadians in 20 industries and generate $1.2 trillion revenues yearly.

Eighty of the council’s 170 members responded to the survey, including in sectors from agriculture to automotive, energy utilities, finance, high technology manufacturing, information technology, telecom/media and transportation.

Sixty-five per cent of the respondents said they recruit workers through the immigration system and the rest hire permanent residents already in Canada. More than 80 per cent of employers reported relying on immigration to address labour shortages and for global experience, knowledge and networks.

While two-thirds of those who use the system intend to increase their recruitment of immigrant talents, 67 per cent said processing delays have become the top barrier for employers to meet those needs, while 58 per cent of the companies expressed frustration with the complex administrative requirements.

“Given the growing immigration backlog has been identified as a major barrier to economic growth and business investment, it’s imperative Canada take an all-hands-on-deck approach to secure a competitive advantage and … modernize the immigration system,” said Goldy Hyder, president and CEO of the Business Council of Canada.

Of all economic immigration programs, employers said they relied most on the global talent stream, federal skilled worker program and the Canadian experience class, but the two latter programs have been suspended during the pandemic.

The survey found skills shortages are most common in fields such as computer science, engineering and information technology. There is also a huge demand for construction workers, plumbers, electricians, and other skilled trades.

Half of the employers said Canada should increase its annual intake of permanent residents and the rest support the government’s current three-year immigration plan to welcome 431,645 permanent residents in 2022; 447,055 in 2023; and 451,000 in 2024.

“Canada is in a global competition for talent, and we risk losing out to countries with more effective and efficient immigration systems,” Hyder said. “Nobody can afford to wait a year or more to have an application processed, not the deserving candidates themselves nor the companies hiring them.”

Source: Canada’s COVID-spurred immigration backlog is hurting its economic growth, survey suggests

Analysis: Quebec focuses on French speaking immigrants as companies plea for workers

More coverage:

Quebec’s plans to attract more French-speaking newcomers are unnerving some business owners who say they need immigrants from varied backgrounds to address a tight labor market in the Canadian province.

Unlike other provinces, Quebec gets to choose its economic immigrants. The government previously lowered the number of new permanent residents it brings in, relying more on temporary workers, and says it has increased the francophone share of economic immigrants.

Premier Francois Legault’s Coalition Avenir Quebec (CAQ) is determined to protect French, which he says is vulnerable in mostly English-speaking North America, ahead of an Oct. 3 election.

His government announced a new minister for French and passed a sweeping law requiring, among other things, newcomers to receive most non-health services in French after six months in the province.

While Legault campaigns on attracting more francophones, some business owners warn the move could put off immigrants with critical skills. Quebec has Canada’s second-highest job vacancy rate among provinces.

Montreal entrepreneur Vince Guzzo, whose businesses include restaurants and movie theaters, said he is desperate for dishwashers no matter what language they speak.

“I would download an app … and my phone would translate it in Punjabi if I had to,” Guzzo told Reuters.

According to Statistics Canada data from the fourth quarter of 2021, Quebec accounts for almost 40% of Canada’s estimated 81,000 vacant manufacturing positions. Manufacturing accounted for 12.6% of Quebec’s gross domestic product in 2021 – higher than any other sector.

“We’re not saying that French isn’t important. But it does become a limiting factor when we’re looking to attract the best people and talent that we need,” said Veronique Proulx, president of Quebec Manufacturers and Exporters.

She called Quebec’s shift toward temporary work a “band-aid” for manufacturing’s labor shortage. “We have some companies that are thinking of shutting down production lines.”

Quebec minister Jean Boulet, who is responsible for labor and immigration, said via email that his government has taken steps to attract foreign students and lure workers in priority sectors. He said the new law would include services making it easier to learn French.

Quebec plans to take in more than 71,000 permanent residents in 2022 after immigration numbers fell to 25,225 in 2020 due to the pandemic.

Boulet said CAQ deliberately brought in fewer new permanent residents after coming to power in 2018 to help newcomers integrate, and that it is making efforts to better recognize foreign credentials.

Quebec’s share of Canada’s total new permanent residents dropped to about 12.4% last year from 21.3% in 2012, according to government data.

Quebec also risks losing newcomers to other Canadian regions. About 16.3% of immigrants who came to Quebec in 2009 had left for other provinces by 2019, nearly double that of Ontario, according to Statistics Canada data.

‘NOT ALWAYS REALISTIC’

Quebec has historically been a popular destination for immigrants to Canada. But changing criteria for making temporary residents permanent and long waits to gain residency could discourage newcomers, said Montreal-based immigration lawyer Rosalie Brunel.

Boulet said 84% of economic immigrants admitted in 2021 spoke French, compared with 56% in 2019.

His office said Quebec increased its francophone share through selection of applicants in certain immigration streams and by making French programs accessible to temporary residents.

Legault wants Quebec to choose people who immigrate to join their families – a power held by Canada’s federal government – so it can select more French-speakers.

The head of one manufacturer said the government wants companies to recruit French-speaking workers.

Quebec said companies can also turn to alternatives such as automation.

“The dream is to have well-trained workers who are French speaking, but that’s not always realistic,” said Technosub Chief Executive Eric Beaupre. Technosub, based in rural Rouyn-Noranda, Quebec, produces and repairs pumps for mining and other sectors.

With limited local labor, Technosub is taking on more temporary workers from Latin America and the Philippines who have needed skills and learn French on the job, he said.

Emmanuel Suerte Felipe arrived at Technosub as a temporary worker from the Philippines in 2018. His French is good enough for the job but he worries about it passing muster for permanent residency as he wants to bring his family to Quebec.

“I would love to stay here,” he said. “I found my dream job.”

Source: Analysis: Quebec focuses on French speaking immigrants as companies plea for workers

Scofield: Canada’s worker shortage has one big upside for employers

And employees:

The supertight job market that is bedevilling employers and the Bank of Canada alike has an upside: it has managed to do quickly what employment equity practices and public policy have struggled with for years.

It has drawn in racialized workers, new immigrants, young people, older workers and women in astounding numbers, making history along the way.

Whether that kind of inclusion can last, however, is an open question that will depend on employers and public-policy makers alike.

For one, the current pace of hiring is not likely to last.

In May, the unemployment rate hit a record low of 5.1 per cent, Statistics Canada reported on Friday. Employers created just 39,800 new positions over the course of a month — solid although nothing to write home about.

Still, from the start of the pandemic, the job market is now 497,000 positions larger than it was back then. In other words, after all of the ups and downs, closures and reopenings, illness and fear, that’s half a million more jobs than what we used to have, and it speaks to the resilience of the Canadian labour market.

That resilience has benefited a wide array of people who used to have a hard time getting a fair shake.

Let’s look at workers between the ages of 25 and 54 years old, to start. First Nations women in that age bracket have seen their unemployment rate plunge 9.3 percentage points over the past year to 7.3 per cent. Southeast Asian women have a 4.1 per cent unemployment rate, which is 6.3 percentage points lower than a year ago. Filipino men have a 3.4 per cent unemployment rate, down 4.7 points on the year.

Participation rates — how many people are actively working or looking for work — are also proof of significant progress for some key demographics. The participation rate is at a record high for women aged 25 to 54, at 85 per cent. That’s still lower than men of the same age (91.9 per cent), but after all of the troubles women had at the beginning of the pandemic, it’s remarkable.

The experience of newcomers to Canada is also eye-opening, says Brendon Bernard, senior economist at jobs website Indeed.com. He points out that immigrants who have been in Canada for five years or less are jumping into the job market in leaps and bounds, and they’re landing pretty good jobs.

Before the pandemic, their participation rate was 76.5 per cent. Now, it’s 84.3 per cent. And wage data shows they’re being hired into higher-income areas.

“One of Canada’s longest-standing labour market challenges has been the underemployment of newcomers. And there really has been a noticeable shift,” Bernard said in an interview.

Can it all last? Or will the pending slowdown in the Canadian economy make for “last hired, first fired” and erase the gains for demographics that have been struggling to catch up?

Jean-François Perrault, chief economist at Scotiabank, suggests it can actually last. For sure, hiring is set to slow down as the economy overheats and the central bank moves to cool it off by dramatically raising interest rates. But at the same time, Perrault points out there are about one million vacancies in the job market right now, and they’re not just going to evaporate with a slowing economy.

“There’s this huge backlog of jobs to fill,” he said. For companies hoping to just get by day to day, “these vacancies are massive, and they’re critical.”

He suspects even if the pace of hiring slows down over the next few months, vacancies will remain high. So employers are deeply concerned about long-standing labour shortages and they’ll hang on to their workers for as long as they can. It’s just too hard to ramp back up.

For politicians, this means they can’t really afford to let up on their policy attempts to draw more people into the workforce, even if the job numbers soften.

Even if there’s a downturn, the long-standing trend toward an aging population means Canada will need to encourage older workers and women to join the workforce in greater numbers over the next few years.

Ottawa’s $30-billion child care strategy was supposed to dramatically increase women’s participation in the workforce, but it has been slow to fully gear up. The returns, in terms of labour participation, are likely still years away.

And the federal Liberals are unlikely to reverse their dedication to retiring at 65 to encourage older workers to stay in the workforce longer.

But if employers and policy-makers are wise, they’ll take a look at what the tight job market has accomplished for them, appreciate what the gains to inclusivity have done for their workforce, and then lock them in.

The next slowdown doesn’t have to set us back.

Source: Canada’s worker shortage has one big upside for employers

USA: Economists hope a rebound in immigration helps curb inflation

Of note, temporary workers as a way to both address labour shortages and reduce wage pressures:

When the crowds return to Funland this summer, they’ll find familiar rides like the Fire Engines and the Sea Dragon at this small beachside amusement park.

For the first time since the pandemic began, many of those rides and games will be staffed by student guest workers from around the world.

“They are truly important to the success of our business,” said Chris Darr, the personnel manager at Funland. “We saw last year, we couldn’t fill the positions that we had.”

The number of guest workers and immigrants coming to the United States is slowly climbing again after steep declines during the pandemic. Tens of thousands of international students are back at resort towns and amusement parks. The Biden administration has released more visas for seasonal guest workers, and it’s automatically extending work permits for others.

Economists say that should ease labor shortages — and some, though not all, think it could help calm inflation too.

“Hopefully if this trend continues, and maybe accelerates, we will see the easing of some of the shortages,” said Giovanni Peri, an economics professor at the University of California, Davis.

Businesses in Rehoboth Beach rely on seasonal guest workers

Employers in Rehoboth Beach are clearly glad to have these temporary student workers back. Without them, Darr says, he couldn’t hire enough people to keep Funland open every day.

“Especially at the end of the summer, early August, we lose college students, we lose high school students back to sports and theater programs,” said Darr, a fourth-generation member of the family that owns the park.

For decades, he says, Funland has relied on students coming to the U.S. on J-1 visas. But the program was all but shut down in 2020. The numbers were up last year, though still far short of pre-pandemic levels.

“Without the J-1 visa program, we wouldn’t be able to open half of the stuff that is in the park,” he said.

This summer, Darr is expecting about two dozen student guest workers — including 21-year-old Morgan Bennett, a student from Jamaica.

“There was a listing of all the different places that I could have worked,” Bennett said. “When the person had told me the type of job that I would have encountered, I just said yes!”

The State Department says the number of participants in its summer work travel program is rebounding toward pre-pandemic levels. Roughly 30,000 participants have started the program already this year, according to a State Department official, with about 50,000 more in the pipeline. That would put the program at roughly three-quarters of its enrollment in 2019, when more than 108,000 visas were issued.

More guest workers could help ease labor shortages

Overall, the U.S. economy is about two million working-age immigrants short of where it would have been if not for the pandemic and the Trump administration’s cuts, according to Peri. He says that’s contributed to a tighter labor market, putting pressure on employers to raise wages — and in turn, prices.

“If these shortages loosens up — so if there are more workers — this should also reduce the inflationary pressures,” Peri said. That’s especially true, he says, in industries that depend heavily on immigrant labor, like hospitality.

“We were 32 employees short last summer,” said Susan Wood, who owns the Cultured Pearl Restaurant and Sushi Bar in Rehoboth Beach. “It was torture. I mean all of our staff work six, seven days. They killed themselves.”

“I worked 183 days straight at the front desk, and my husband worked more than that in the kitchen,” she said.

Wood is also participating in the J-1 visa program this year. Without those international student workers, she says, her year-round staff worked a lot of overtime last summer, driving her labor costs way up.

“We had to raise prices,” Wood said. “We raised prices because of payroll, but not nearly as much as we had to raise prices because of food costs.”

Some economists doubt that more immigration will cure inflation

The costs of food and energy are still rising fast. Economists say that’s contributing to inflation across the economy — and some are skeptical that a partial rebound in the number of guest workers and immigrants will have a measurable impact.

“I don’t think it’s going to do much to fix our inflation problem,” said Ramesh Ponnuru, the editor of the National Review, and a fellow at the American Enterprise Institute, a conservative think-tank in Washington.

Ponnuru argues that inflation right now is largely caused by problems in the supply chain, and that simply bringing immigration back to pre-COVID levels won’t solve those problems.

“We need an immigration policy designed with our economy’s interests in mind. We don’t have that,” Ponnuru said. “And just toggling that so that you have more of a dysfunctional immigration policy seems to me to be a mistake.”

Temporary guest workers are already making an impact on the bottom line at Thrasher’s French Fries in Rehoboth Beach. General manager Dean Shuttleworth is expecting about a dozen international student workers this summer, which means that he’ll have enough staff to reopen another location across the street that’s been shuttered since the pandemic began.

“[Memorial Day] weekend was the first time we opened our 26 Rehoboth Avenue store up in two years,” Shuttleworth said.

“Last year, we had the volume up. We were extremely busy,” he said. “So I’m in pretty good shape this year.”

Source: Economists hope a rebound in immigration helps curb inflation

Rise of the Robots Speeds Up in Pandemic With U.S. Labor Scarce

Of note to Canadian policy makers as well given this trend will cross the border and needs to be taken into account in immigration policy:

American workers are hoping that the tight pandemic labor market will translate into better pay. It might just mean robots take their jobs instead.

Labor shortages and rising wages are pushing U.S. business to invest in automation. A recent Federal Reserve survey of chief financial officers found that at firms with difficulty hiring, one-third are implementing or exploring automation to replace workers. In earnings calls over the past month, executives from a range of businesses confirmed the trend.

Domino’s Pizza Inc. is “putting in place equipment and technology that reduce the amount of labor that is required to produce our dough balls,” said Chief Executive Officer Ritch Allison.
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Mark Coffey, a group vice president at Hormel Foods Corp., said the maker of Spam spread and Skippy peanut butter is “ramping up our investments in automation” because of the “tight labor supply.”

The mechanizing of mundane tasks has been underway for generations. It’s made remarkable progress in the past decade: The number of industrial robots installed in the world’s factories more than doubled in that time, to about 3 million. Automation has been spreading into service businesses too.

The U.S. has lagged behind other economies, especially Asian ones, but the pandemic might trigger some catching up. With some 10.4 million open positions as of August, and record numbers of Americans quitting their jobs, the difficulty of finding staff is adding new incentives.

Ametek Inc. makes automation equipment for industrial firms, like motion trackers that are used from steel and lumber mills to packaging systems. Chief Executive Officer David A. Zapico says that part of the company is “firing on all cylinders.” That’s because “people want to remove labor from the processes,” he said on an earnings call. “In some places, you can’t hire labor.”

Unions have long seen automation as a threat. At U.S. ports, which lag their global peers in technology and are currently at the center of a major supply-chain crisis, the International Longshoremen’s Association has vowed to fight it.

Companies that say they want to automate “have one goal in mind: to eliminate your job, and put more money in their pockets,” ILA President Harold Daggett said in a video message to a June conference. “We’re going to fight this for 100 years.”

Some economists have warned that automation could make America’s income and wealth gaps worse.

“If it continues, labor demand will grow slowly, inequality will increase, and the prospects for many low-education workers will not be very good,” says Daron Acemoglu, a professor at the Massachusetts Institute of Technology, who testified Wednesday at a Senate hearing on the issue.

That’s not an inevitable outcome, Acemoglu says: Scientific knowhow could be used “to develop technologies that are more complementary to workers.” But, with research largely dominated by a handful of giant firms that spend the most money on it, “this is not the direction the technology is going currently.”

Knightscope makes security robots that look a bit like R2-D2 from Star Wars, and can patrol sites such as factory perimeters. The company says it’s attracting new clients who are having trouble hiring workers to keep watch. Its robots cost from $3.50 to $7.50 an hour, according to Chief Client Officer Stacy Stephens, and can be installed a month after signing a contract.

One new customer is the Los Angeles International Airport, one of the busiest in the U.S. Soon, Knightscope robots will be monitoring some of its parking lots.

They are “supplementing what we have in place and are not replacing any human services,” said Heath Montgomery, the airport’s director of public relations. “It’s another way we are providing exceptional guest experiences.”

Source: Rise of the Robots Speeds Up in Pandemic With U.S. Labor Scarce