Canada’s weakening labour market, unfavourable to new immigrants

Newer immigrants are struggling as the Canadian labour market goes through a rough patch.

 

The unemployment rate for recent immigrants – those who became permanent residents within the last five years – was 12.6 per cent in June, an increase of four percentage points from a year earlier, according to Statistics Canada. (All figures in this piece are three-month moving averages, unadjusted for seasonality.)

 

It’s a very different story for those born in Canada. Their unemployment rate was 5.5 per cent last month – up slightly from 5 per cent in June, 2023.

 

The gap in jobless rates between these groups is the largest since August, 2014.

The labour market has softened over the past two years year as companies struggle with higher interest rates, making them more hesitant to hire. At the same time, the Canadian population has soared – largely because of strong immigration – and led to an infusion of job seekers.

 

“The record surge in immigration has meant that even the healthy pace of job growth over the past year has fallen well short of what would have been needed to keep the unemployment rate steady,” Royce Mendes and Tiago Figueiredo, economists at Desjardins Securities, said in a research note on Tuesday.

 

It’s not only newcomers bearing the brunt of a weaker job market. The youth unemployment rate has risen to 13.6 per cent, the highest level since the spring of 2016, not including the initial pandemic years of 2020 and 2021. For Black Canadians between the ages of 25 and 54, their unemployment rate was 11.9 per cent in June, up 4.4 percentage points over a year.

 

“The labour market is fairly solid for those who already have a job, but it’s become extremely tough for those looking for work,” the Desjardins economists said.

 

 

 

 

This article was first reported by The Globe and Mail