Immigration and Labour Force Growth: Some Misleading Generalizations.
R. Beaujot and D.Kerr
In his introduction to the 2014 annual report to Parliament on Immigration, the current Minister
of Citizenship and Immigration, Chris Alexander, emphasized that “immigration is soon to
become Canada’s primary source of net labour force growth” (CIC, 2014). Similarly in a 2009
speech, his predecessor Jason Kenney observed that ‘with the demographic changes that will
soon start to take hold, within a few years one hundred percent of Canada’s labour market
growth will be attributable to immigration’ (Kenney, November 19, 2009). This idea has long
been promoted among decision makers in Ottawa, as for example, over a decade ago, the 2002
Annual Immigration Plan observed that ‘70 percent of labour force growth was due to
immigration’ and roughly ‘30 percent was due to natural increase’ (Citizenship and Immigration,
2001:2). Yet such figures can be misleading, they are merely derived by dividing the number of
immigrants who arrived over a specific period by the change in the size of the labour force over
the same period. That shows what percentage of the change in the size of the labour force is due
to immigration.
Let’s think a bit further on this: when the labour force is growing at a modest pace, as is now the
case, this figure is not necessarily very meaningful, and in fact, can be a bit misleading. For
instance, if the labour force grew from 10,000,000 to 10,000,001 but one member of the labour
force was an immigrant, then 100 percent of the labour force growth would be due to the arrival
of that one person. It is more useful to look at the relative size of the internal and external
sources of entry into the labour force.
For instance, the number of people turning say 20 in 2013 was roughly 480,000, while
immigration was about 260,000. Of course, neither group would be completely in the labour
force. If we estimate that 90 percent of those who reach labour force age will be in the labour
force at some point, and that about 75 percent of immigrants are aged 15–64 and would
immediately enter the labour force, then we would have 627,000 additions to the labour force, of
which 68.9 percent would be due to internal recruitment and only 31.1 percent due to
immigration. That is, while immigration is an important source of recruitment to the labour
force, its importance has been exaggerated. To suggest that we are being almost entirely reliant
on immigration to maintain the labour force implies that there is little regeneration by all the
people leaving Canadian schools, colleges and universities. It is absurd to say that our labour
force will not be renewed unless we have immigration!
Clearly, immigration is an important source of recruitment, but there are other options.
Moreover, depending excessively on immigration can also make us lazy about encouraging other
sources of recruitment; that is, we fail to make the necessary investment in education and
training and may neglect population groups that have low labour force participation. For
instance, in 2012 the average hours worked per week is 38.9 for employed men and 32.9 for
women. If women’s average hours were increased to that of men, it would be the equivalent of a
7.9 percent increase in the size of the labour force (Statistics Canada, 2013a, author’s
calculations). Similarly, at ages 25 and over, the employment rate is 68.3 percent for men and
58.4 percent for women. Reducing that difference would be equivalent to a 6.9 percent increase
in size of the labour force (Statistics Canada, 2013b, author’s calculations).
A clearer analysis of the underlying dynamics of labour force renewal and regeneration is
necessary, without ignoring those groups in Canadian society that are “unrepresented” in the
labour force” This is of fundamental importance in a context of rapid population aging, and
potentially slower rates of population growth. Enough with these overly simplistic
generalizations.
References:
CIC 2014. Annual Report to Parliament on Immigration. Ottawa: Citizenship and Immigration
Canada.
Citizenship and Immigration, 2002. Pursuing Canada’s commitment to immigration: the
immigration plan for 2002. Ottawa: Citizenship and Immigration Canada.
Hutchinson, Michael, 2002. “Baby boom bust.” Aboriginal Times 6(5), March 2002: 30-33.
Statistics Canada, 2013a. Labour force estimates, by usual hours worked, sex and age group
Kenney, Jason. 2009. Speaking Notes for the Minister of Citizenship, Immigration and
Multiculturalism to the 2009 Top Employer Summit “Helping Newcomers to Enter the
Workforce.” Fairmont Royal York Hotel Toronto, Ontario November 19, 2009.
Statistics Canada, 2013a. Labour Force Estimates, hours worked, by sex and detailed age group
(annual), 1976-2013. CANSIM 282-0016.
Statistics Canada. 2013b. Labour Force Estimates, by sex and detailed age group (annual), 19762013. CANSIM 282-0002.