In two recent speeches on November 10 and 14, Bank of Canada (BoC) Governor Tiff McCallum spoke to attendees and the media about how immigration could be the key to achieving labor market stability and correcting the course of inflation .
His speeches addressed “the future of workers and jobs”, tackling questions that included:
- Why Businesses Can’t Find Enough Employees?
- Are we heading for a recession?
- does [a recession] Meaning a big increase in the unemployment rate?
- What is the role of the Bank of Canada in supporting maximum sustainable employment?
What Tiff McCallum had to say about the link between immigration, labor and inflation in Canada
Focused on addressing issues in the labor market and explaining how employers can expand the pool of available workers to account for inflation, the following is a summary of McCallum’s speeches as they work to balance Canada’s labor market. related to the role of immigration in
Governor McCallum made the initial mention of immigration as he stressed that there is more demand than labor supply in Canada’s current labor market.
According to the BoC governor, the labor shortage has put pressure on wages across the country and subsequently pushed up inflation. Therefore, McCallum urged Canadian employers to hire immigrants – and especially recent immigrants – to meet the growing labor demand and combat inflation accordingly.
,[One] The way to rebalance supply and demand is to increase the supply of workers,” Governor McCallum said. “The more we can do on supply, the less we’ll need to do on demand.” By hiring more immigrants Higher wages are expected to help regulate better, which the BOC says will “slow down wages to bring inflation under control.”
immigration status in canada 2020
After reviewing the 2020 immigration downturn that Canada experienced during the peak of the COVID-19 pandemic, where the country missed its immigration target by nearly 100,000 workers, McCallum also noted that “immigration [now] Bouncing back when border restrictions return to normal.
Evidence of a return to normal for Canadian immigration is clear in the country’s latest Immigration Levels Plan for 2023-2025, released on November 1. After slow immigration through the height of the pandemic, Canada is clearly making a comeback, and is aiming for even more – 500,000 in 2024 and 2025.
what will happen next
Accordingly, immigration will aid in Canada’s labor market balance, growth and inflation stability, especially compared to other countries around the world. This is because Canada’s “robust immigration goals suggest that … immigration will account for more than two-thirds of the expected growth in Canada’s potential output.”
In other words, immigrants add potential workers to the Canadian workforce, which counteracts the declining workforce participation rate in this country due to our aging natural population and, as a result, solves the economic problems we currently face. helps to do.
parting note
Note: The full transcript of Governor Tiff McCallum’s November 10 speech at Toronto Metropolitan University is available on the Bank of Canada website, as is the full video of his November 14 speech at the Conference on Diversity, Equity and Inclusion in Economics, Finance and Central Is. Banking (Part 1 and Part 2).
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