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08/04/2006 | Canada: Foreign Bricklayers Needed, PhD Preferred

WMRC Staff

From coast to coast, the Canadian labour market is tight. Labour shortages are particularly pervasive in construction and could get much worse over the next few years. If workers cannot be found, Canada's economic performance will suffer.

 

While residential construction activity will slow due to decreasing affordability of homeownership, Global Insight predicts nonresidential construction will continue to grow strongly over the next few years, after expanding 6.8% in 2005. British Columbia is preparing to host the 2010 Winter Olympic Games, while investing in the Pacific Gateway to increase its share of North American container traffic from 9% to 15% by 2020. In Alberta, capital construction spending on oil sands for extraction and refining is predicted to peak by about 2008. Meanwhile, the Ontario government will invest heavily in public transit, electricity generation, and heath-care infrastructure.

With no letup in activity expected, labour shortages could become the single-most important impediment to Canada's economic potential. Without the needed workers, many projects will either not go ahead or will further stoke price pressures in both the affected sector and the wider economy. Immigrants, and especially temporary foreign workers, offer a natural and flexible escape hatch to Canadian shortages. Unfortunately, the current immigration mechanism may not be up to the job. In the present environment, applicants who would be most successful in both getting through the point system and obtaining well-paid employment upon landing would have to be university educated, fluently speak one of the official languages, and be skilled construction workers. Such people are very rare indeed.

The unfortunate results of the current system are evident. Last year's Statistics Canada study found that "two years after arrival, the employment rate among prime working-age immigrants was 63%, 18 percentage points below the national rate of 81%." Moreover, "most newcomers had not found employment in the occupations in which they had intended to work" (Longitudinal Survey of Immigrants to Canada: Progress and Challenges of New Immigrants in the Workforce, 2003). This year's Statistics Canada study found that "among immigrants that arrived in either business class or skilled worker class, about 4 in 10 left [Canada] within 10 years after arrival" (Return and Onward Migration among Working Age Men).

While many highly educated individuals that the system wants to keep are leaving, those that the system does not want to keep are gainfully, if illegally, employed. Construction sites across Canada have tapped into the pool of illegal workers. The Canadian media has reported that there were 10,000–15,000 illegal foreign workers in Ontario and as many as 200,000 nationally. Assuming the Ontario number is reasonable, the national number appears overstated. If illegal workers were proportionally distributed among the provinces, a national number of 25,000–40,000 would be more likely. If their status were legalized, the impact on the national economy would be minimal. No wonder this issue is not at the top of the new federal government's economic agenda.

Currently, the issue of illegal workers is more of a moral and political nature. After all, these undocumented workers, admitted without proper screening, are a potential security risk. In addition, since they have few legal rights, there is also the concern of mistreatment by their employers.

From a longer-term perspective, it is clear that the immigration system needs fine-tuning, and the temporary worker category should be part of the solution. The latest data from Citizenship and Immigration Canada show that there were 134,251 temporary foreign workers in 2004, an 8.4% increase from 2003. Ideally, there should be no limit on the number of temporary workers admitted, so long as they can be gainfully employed and are paid wages consistent with the domestic labour market. To its credit, the government is taking steps in the right direction. For example, Human Resources and Skills Development Canada and the Alberta government have reached an agreement to facilitate the recruitment of oil sands workers abroad. In addition, the fact that 700,000 individuals waited in line to be processed for immigration at the end of 2004 shows that Canada is still an attractive country to many people.

From the macroeconomic point of view, the current debate about illegal workers is a tempest in a teacup. Nevertheless, it raises a number of issues that will become more important in the future. As baby boomers retire, immigrants and temporary workers will increasingly determine Canada's potential to grow and compete. The time to adjust the rules is now.

Contact: Raul Dary

24 Hartwell Ave.
Lexington, MA 02421, USA
Tel: 781.301.9314
Cel: 857.222.0556
Fax: 781.301.9416
raul.dary@globalinsight.com

www.globalinsight.com and www.wmrc.com

WMRC (Reino Unido)

 



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