Diverse Talent: The New Competitive Edge Hire Immigrants Ottawa March 9, 2011 Glen Hodgson Senior Vice-President and Chief Economist hodgson@conferenceboard.ca
Canadian Structural Challenges Aging work force: Recession has only delayed the inevitable impact Upward shift in the Loonie: Productivity boost, or Dutch disease? NAFTA drifting: N.A. integration has stalled Restoring fiscal balance: Demographics will weigh heavily Climate change: Still searching for concerted action
1.05 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55 The Loonie and the Oil Price WTI $US, $US/$C Dollar (left) Oil Price (right) 00 01 02 03 04 05 06 07 08 09 10 11 12 140 120 100 80 60 40 20 0 Sources: The Conference Board of Canada; U.S. EIA; Statistics Canada.
Unemployment Rate vs. Natural Rate 13 12 11 10 9 8 7 6 5 (percent), 1981-2015 Unemployment Rate Natural rate 198183 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 Sources: The Conference Board of Canada; Statistics Canada.
Growth in Industrial Composite Average Weekly Wage versus CPI (per cent change) 5.0 4.0 3.0 2.0 1.0 0.0-1.0 Average Weekly Wages 01 02 03 04 05 06 07 08 09f 10f 11f 12f 13f 14f 15f CPI 5.0 4.0 3.0 2.0 1.0 0.0-1.0 Sources: The Conference Board of Canada; Statistics Canada
Average Retirement Age 66 65 64 63 62 61 60 59 58 57 Public Sector Private Sector 56 Source: Statistics Canada.
Canadian LT Demographics Aging population will drive changes in the economy Supply constraints on labour already here Immigrants will be the dominant source of population growth by 2030 Potential output weakens through 2030 Productivity gains needed to help sustain GDP Active labour market policy required
Population Distribution by Age, 2030 Sources: The Conference Board of Canada; Statistics Canada.
Labour Force Participation Rate (1976-2030, per cent)
Labour Force Growth (average annual growth) 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 2001-2005 2006-2010 2011-2015 2016-2020 2021-2025 2026-2030 Sources: The Conference Board of Canada;
Real GDP Canada (per cent change, compound annual growth) Sources: The Conference Board of Canada; Statistics Canada.
Replenishing the Workforce There are essentially three inter-related options for adapting to aging demographics: Raise levels of immigration and speed up integration Invest in education: increase the skills of the workforce Encourage older workers to work longer
LT Path for Immigration The Conference Board s long-term economic forecast assumes that levels of immigration will be raised significantly We expect annual immigration levels to grow progressively, reaching 350,000 by 2030 But the system will have to change to achieve effective integration at this level
400 350 300 250 200 150 100 50 0 2018 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2020 Immigration By the Numbers Historical and Projected Immigration to Canada 1964 2020 (000 s)
Employment Barriers Lack of Canadian work experience Discrepancies in recognizing foreign qualifications and experience Language barriers Differences in workplace cultures Insufficient workplace integration and diversity programs Discrimination
Recent CBoC/Hodgson research Canada s Future Labour Market: Immigrants to the Rescue?, Policy Options, July-August 2010 We need immigrants as boomers retire, Toronto Star, August 26, 2010. Sustaining the Canadian Labour Force: Alternatives to Immigration, Executive Action briefing, August 2010.
Re-inventing Immigration Policy 1. Recognize importance of skills-based immigration to address labour market needs and immigrant s potential for long-term economic contribution. 2. Develop a consolidated immigration system that is streamlined, client-friendly and assesses technical and language skills early. 3. Engage employers up-front, improve their integration into the system and monitor.
Re-inventing Policy (cont.) 4. Increase use of TFWs to fill short-term gaps in labour markets. 5. Create new and improved pathways to permanent residency for TFWs, foreign students. 6. Improve foreign credential recognition, language training, settlement services and opportunities to gain meaningful work experience.
Ottawa-Gatineau Outlook: Highlights Ottawa Gatineau s economy bounced back solidly in 2010 following the downturn in 2009. Economic growth is expected to slow in 2011. A federal government spending freeze will restrict growth in the key public admin. sector. High-tech sector activity remains below peak levels. Job growth also expected to cool.
Labour Force Growth Ottawa-Gatineau (2003 2015) 5.0 4.0 3.0 2.0 1.0 0.0-1.0 03 04 05 06 07 08 09 10 11f 12f 13f 14f 15f Sources: The Conference Board of Canada; Statistics Canada.
Immigrant Share of Employed Labour Force 22% 21% 20% 19% 18% 17% 16% 15% Ottawa-Gatineau Canada 1996 2001 2006 Source: Statistics Canada.
Conclusion As demographics take hold, immigration is key to Canada s future -- if we want to maintain a vibrant economy This means raising levels of immigration and speeding up integration Ottawa should embrace this objective.
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