Employment rises as Canada’s labour force shrinks slightly

Asheesh Moosapeta
Updated: Aug, 21, 2023
  • Published: October 10, 2022

The national unemployment rate fell by 0.2% to 5.2% in September. Statistics Canada’s September Labour Force Survey revealed positive trends in the labour market around employment, while concerns loomed in the background regarding an aging population and ever-increasing retiree exits from the workforce.

Schedule a Free Canadian Immigration Consultation with the Cohen Immigration Law Firm

Employment increased in British Columbia, Manitoba, Nova Scotia, New Brunswick, Yukon, and Nunavut in September; while Ontario, Prince Edward Island, and the Northwest Territories saw slight declines. Among Canada’s+ core-aged population (25-54), employment increased for women (+0.8%) and remained steady for men in the same age demographic. These remain largely positive signs for general economic performance, as well as the strong hiring climate Canada is experiencing currently.

Gains in employment for educational services and health care and social assistance services were offset by losses in manufacturing, information, culture, and recreation, transportation and warehousing, and public administration. Increases in service sector industries reflect an increase in spending in these areas post-pandemic, which has aided a continued return toward pre-pandemic business levels.

Furthermore, people looking for work in Canada were spending less time unemployed, with a sharp decline of 9.7% (18,000) in long-term employment (the number of people who have been continually unemployed for 27 weeks or more).

This is yet another encouraging sign of a strong hiring climate. The need to continually address an inflated number of job vacancies, as seen since July, will remain of primary concern to the national labour market. Though these remain strong signs for economic performance and highlight opportunities within Canada, there are also some longer-term trends that are not as positive.

Labour force contraction

September saw a decrease in both the total size of the labour force (the total number of people employed or unemployed) by -0.4% and a decline in the participation rate of -0.1%. These declines are consistent with monthly and yearly trends that highlight the need for continued labour recruitment in Canada. Since 2002, the national labour force participation has declined by 2.4% cumulatively.

These measures remain extremely pertinent in the face of high job vacancies, and an aging population; the latter a significant domestic problem that Canada must continually address. However, in the face of yet another trend the decline becomes even more relevant:

In September, nearly one million people between 55-64 cited retirement as their main activity. Related to an aging population, increasing numbers of people in the workforce continue to pursue retirement, driving Canada’s labour force down.

As more of Canada’s working population reaches retirement age (since 2019 the number of Canadians aged 65+ grew by 11.6%, while the growth in the population of people of working age was only 3.5%), and in the face of vacancies and labour market contraction, Canada will have to take increasing measures to make sure that it does not experience a severe labour shortage and can still attain its economic and fiscal goals.

The importance of foreign workers

In the face of a labour market with high vacancies, a shrinking labour force, and an aging population—one government activity will be paramount to Canada’s ability to maintain economic growth and health: immigration.

As more of the population continues to reach or approach retirement age; coupled with a low fertility rate, it is clear that Canada cannot replenish the labour pool through natural growth. The government will instead look to address labour and skills shortages in the market through its immigration programs, (already seeing increases in Gen-Z and millennial workforce).

In the face of shortages (seen for example, in the healthcare and social assistance industry) Immigration Refugees and Citizenship Canada (IRCC) are looking to welcome a record 430,000 new immigrants annually.

The Canadian Government will additionally announce its immigration levels plan 2023-2025—the umbrella plan for newcomer strategy—by November 1st.

Schedule a Free Canadian Immigration Consultation with the Cohen Immigration Law Firm

© CIC News All Rights Reserved. Visit CanadaVisa.com to discover your Canadian immigration options.

Share this article
Share your voice
Did you find this article helpful?
Thank you for your feedback.
Subscribe to our newsletter
Did you find this article helpful?
Please provide a response
Thank you for your helpful feedback
Please contact us if you would like to share additional feedback, have a question, or would like Canadian immigration assistance.
  • Do you need Canadian immigration assistance? Contact the Contact Cohen Immigration Law firm by completing our form
  • Send us your feedback or your non-legal assistance questions by emailing us at media@canadavisa.com
Related articles
Gender Equality Week: How Canada promotes equality for all newcomers
A diverse group of friends.
Marc Miller: Canada’s immigration levels to remain steady or continue climbing
Patriot woman sitting on an old wooden pier over mazarine color water of the Cultus Lake and holding up a Canadian flag
Pursuing Education, Work, and Life in Canada: How an Academic Credential Assessment Report Can Help International Students
An academic credential assessment report compares an individual’s international education to educational standards in Canada.
Is it illegal for employers to ask newcomers about their lack of Canadian work experience?
Interview process
Top Stories
Canada’s non-permanent resident population is 2.2 million people
How long does it take for Canada to process visa applications from India?
Canada invites 500 French-speaking candidates in category-based Express Entry draw
Join our free newsletter. Get Canada's top immigration stories delivered to your inbox.
More in Express Entry
Canada invites 500 French-speaking candidates in category-based Express Entry draw
Waterfall near Victoria on Vancouver Island.
Canada releases 2022 Annual Report on Express Entry
Children playing together in colourful natural park on autumn day
What counts as eligible work experience for immigration through Express Entry?
Business people having a meeting in a tech company
Express Entry: Canada has first ever draw for transport occupations
IRCC has held its first ever Express Entry draw for transport occupations.
Link copied to clipboard