(Bloomberg) -- A growing pool of newcomers to Canada can’t find work or aren’t looking, as businesses hire at a slower pace while the population continues to balloon.
The number of working-age people in the country rose by 96,400 in August, Statistics Canada reported Friday, a result of the country’s rapid population growth, which is among the fastest in the world. Over 82,000 people joined the country’s labor force last month, but net employment rose just 22,100.
In the last three months, Canada’s economy has created one new job for every six workers who joined the labor force on net, the lowest rate in over a year. It’s a stark deceleration from the start of the year, when the number of jobs was actually growing faster than the number of available workers.
While labor force growth was high in August, the longer trend shows a rising share of newcomers — many of whom are students — aren’t searching for work. Over the last year, the number of people over 15 surged by 1.1 million. About half looked for employment, and only 54% of those looking were successful, according to Bloomberg calculations.
By contrast, in the 20 years before the pandemic, Canada added between 200,000 and 500,000 people to its working-age population every year. Two-thirds would look for work, on average, and virtually all would find jobs.
Canada’s job market has cooled significantly. Businesses simply aren’t looking for labor at the scale that it’s arriving — job postings on Indeed fell 23% in August from the year before, and less up-to-date data from Statistics Canada shows a similar trend.
Overall, Canada’s population has grown by 3.2% in the last year, fueled by an explosion in foreign students and temporary workers. It’s the second year in a row where Canada added more than a million people, pushing Justin Trudeau’s government to take steps to curb the growth of new residents.
To be sure, the growth in the working-age population can’t be entirely attributed to migration, as a small portion is due to Canadian teenagers reaching the age of 15.
But in August, the unemployment rate for immigrants who arrived in the last five years was 12.3%. That’s more than double the rate for both Canada-born people and immigrants who landed over 10 years ago.
“Canada overshot on immigration with too much too fast relative to the ability of the country’s job market and infrastructure to absorb so much,” Derek Holt, an economist with Bank of Nova Scotia, wrote in a report to investors.
“Unfortunately this risks backfiring now and making it into a political issue because of how badly Ottawa has mismanaged immigration and housing files.”
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