In late 2023, Immigration Minister Marc Miller revealed that his department was working on a “broad and comprehensive” plan to “regularize” the status of hundreds of thousands of undocumented immigrants who either came to Canada illegally or overstayed their visas.
The planned move to grant legal status to undocumented immigrants, many of whom had been working in Canada for years, drew praise from the New Democratic Party, on whose support the Liberal minority government has relied to stay in power.
Fortunately, Mr. Miller has now put that plan on ice. And none too soon, as the fallout from Ottawa’s short-sighted approach to immigration begins to show up in the labour market, with soaring unemployment among youth and newcomers.
There should always be room for exceptions on humanitarian grounds. But blanket amnesty for undocumented immigrants would send a clear message to the vast majority of the country’s 2.8 million temporary residents, who are legally obligated to leave when their student visas or temporary work permits expire, or if their asylum claims or applications for permanent residency are rejected. It would encourage temporary residents to go underground in the belief that Ottawa would eventually grant them amnesty, too.
That is the last message the Trudeau government should be sending at a time when the unintended consequences of its move as the pandemic receded to massively boost immigration to torque economic growth have now been laid bare.
As Statistics Canada reported on Friday, the unemployment rate among youth aged between 15 and 24 surged to 14.2 per cent in July, up 3.6 percentage points from 2023 and the highest rate (outside of the pandemic) since 2012.
Among recent immigrants in that age group, the jobless rate stood at a non-seasonally adjusted 22.8 per cent in July, up 8.6 percentage points in one year. Among all recent immigrants – newcomers who have been in the country for less than five years – the unemployment rate hit 12.6 per cent last month.
These numbers are all the more concerning considering that, over all, Canada’s economy has continued to grow over the past year, however modestly. Rising unemployment among young people and new immigrants outside of a recession augurs poorly for how such groups can be expected to fare during an economic downturn, the likelihood of which appears to be rising, as the U.S. and global economies show signs of sputtering to a halt.
Research has shown that entering the labour market during a recession can leave long-term scars on young people and new immigrants, who can continue to experience lower earnings long after economic growth resumes. That is why federal immigration policy needs to be based on more than stoking short-term growth or pleasing certain political constituencies.
It has taken far too long for the Liberals to figure this out. The Trudeau government belatedly announced in March that it aimed to shrink the proportion of non-permanent residents, or NPRs, in the country to 5 per cent from 6.2 per cent of the overall population by 2027.
But execution has never been this government’s strong suit, and many analysts remain skeptical that it will reach its target. Indeed, Ottawa approved 71,000 applications to hire temporary foreign workers in the first quarter of 2024 alone.
“NPRs represented 6.8 per cent of the population at the beginning of April – much higher than at the time of the March announcement – and the share is expected to continue rising over the near term,” the Bank of Canada noted in July.
“This suggests that it will take longer for planned policies to reduce NPR inflows to achieve the 5 per cent target.”
What this means for a labour market that is already showing significant signs of slack is cause for concern. Canada’s population continues to grow at an unsustainable rate, while job growth is slowing rapidly. The size of the labour market increased by 3.5 per cent in the year to July, but employment rose by only 1.7 per cent.
Over all, Canada lost 2,800 jobs last month, but that figure belies a growing imbalance between the public and private sectors. Private-sector employment declined by 42,000 last month, after staying flat in May and June; the public sector continued to add jobs in July, and accounts for about 60 per cent of all job growth in the past year. The government hiring spree cannot continue indefinitely, as a weaker overall job market begins to eat into tax revenues.
“The Canadian job vacancy rate and our own Canadian Hiring Index have shown little sign of revival having declined steadily amid weakening labour demand over the past two years,” the Conference Board of Canada said in a note on the July jobs report.
“The tepid job numbers in Canada will do little to build confidence among businesses that momentum is building, and we are unlikely to see a pick-up in hiring until sentiment improves.”
The Trudeau government’s misguided immigration policies will continue to make the situation worse for a while yet. It cannot turn the taps off temporary immigration fast enough to correct the imbalance it has created in the labour market.
Young people and recent newcomers are now paying the price for the Liberals’ immigration folly.