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Tag: Canadian labor market

  • Canada’s Unemployment Rate Holds Steady at 6.5% Amid Modest Job Growth

    Canada’s Unemployment Rate Holds Steady at 6.5% Amid Modest Job Growth

    Canada’s unemployment rate remained unchanged at 6.5% in October, according to the latest data from Statistics Canada. The economy added 14,500 jobs last month, slightly under the expectations of economists who had forecast a stronger gain. Despite this modest growth, the country continues to face challenges in its labor market, with full-time employment showing a slight increase while part-time job numbers remained largely unchanged.

    The gains in employment were primarily in business services, building trades, and other support services, while sectors such as finance, insurance, and public administration saw fewer positions. Overall, total hours worked in Canada increased by 1.6% year-over-year, signaling a higher volume of labor output. Furthermore, average hourly wages rose by 4.9% compared to last October, reaching $35.76, a $1.68 increase.

    While youth employment saw a slight uptick for the first time since April, the youth employment rate continues to show a decline of 2.7 percentage points from the previous year. This trend highlights the ongoing challenges faced by younger workers and newcomers to Canada in securing stable employment.

    Inflation and Interest Rates Impact Hiring

    Canada’s labor force has expanded by 2.4% over the past year, largely driven by record levels of immigration. However, the growth in the number of available workers has not translated into significant job creation. High interest rates and persistent inflation have dampened demand, leading to slower business investment and hiring. Despite four rounds of interest rate cuts, Canada’s job market has been muted, and the labor force participation rate has seen a consistent decline.

    As a result, the employment rate—the percentage of the total labor force that is employed—has fallen from 61.9% in October of last year to 60.6% in October 2024. This trend suggests that although more people are entering the job market, many are unable to find employment, contributing to ongoing pressure on Canada’s economy.

    The Future of Canada’s Interest Rate Policy

    With just one more employment report before the Bank of Canada’s next interest rate decision, economists remain divided on the need for further cuts. CIBC economist Avery Shenfield noted that the latest employment data, while mixed, still leans toward a potential 50 basis-point rate cut.

    In a recent statement, Bank of Canada Governor Tiff Macklem acknowledged that while layoffs have remained relatively modest, business hiring has been weak, particularly affecting young people and immigrants. Macklem expressed hope that continued rate cuts would stimulate economic growth and employment, particularly in sectors that have struggled in recent months.

    As Canada’s job market navigates these challenges, attention will turn to the Bank of Canada’s next steps and how they might influence the broader economic landscape moving into the final months of 2024.

    Source : Swifteradio.com

  • Canada to Raise Minimum Wage for Temporary Foreign Workers in High-Wage Stream

    Canada to Raise Minimum Wage for Temporary Foreign Workers in High-Wage Stream

    OTTAWA – The Canadian government is set to increase the minimum hourly wage required for temporary foreign workers in the high-wage stream of the Temporary Foreign Worker (TFW) program. The adjustment, effective November 8, aims to encourage employers to prioritize hiring Canadian workers.

    Currently, under the high-wage Labour Market Impact Assessment (LMIA) stream, employers must pay at least the median wage of their province to qualify for hiring foreign workers. However, according to an unnamed government official, Employment Minister Randy Boissonnault will announce on Tuesday that the new wage threshold will rise to 20% above the provincial median hourly wage.

    In Ontario, for example, where the median hourly wage stands at $28.39, employers will soon be required to offer at least $34.07 per hour to hire foreign workers under this program.

    A Shift Towards Prioritizing Domestic Workforce

    The federal government’s objective with these wage adjustments is to reduce reliance on temporary foreign labor and encourage businesses to increase recruitment of Canadian workers. This move follows criticism directed at the Liberal government for expanding the number of temporary residents in Canada, which some argue has exacerbated housing shortages and driven up living costs.

    The TFW program has also faced scrutiny over alleged mistreatment of foreign workers.

    Employers hiring foreign workers through the LMIA stream must demonstrate that they could not find suitable Canadian candidates for the position. The upcoming wage increase will apply to 34,000 workers under the high-wage stream, according to government estimates. While current work permits will remain unaffected, renewals will be subject to the new wage rules.

    Surge in Temporary Foreign Workers Amid Tightening Rules

    Public data from Immigration, Refugees and Citizenship Canada (IRCC) shows that 183,820 temporary foreign worker permits were issued in 2023, a sharp increase from 98,025 permits in 2019, reflecting an 88% rise over four years.

    The upcoming change follows other efforts to limit the number of temporary residents, including restrictions on the percentage of low-wage foreign workers in certain sectors and eliminating permits in metropolitan regions with high unemployment. However, the new wage rules will not impact workers in agriculture, who have traditionally been exempt from similar changes.

    This policy shift signals the government’s continued efforts to balance economic needs with labor market protections while addressing concerns about the growing reliance on temporary workers.

     

    Source : The Canadian Press