Labour Shortage


In its release of 2001 Census data earlier this month, Statistics Canada reported a growing reliance on immigration as a source of skills and knowledge. The covering statement goes on to note that recent immigrants represented 70 percent of total labour force growth over the past decade and could account for virtually all labour force growth by 2011 (Statistics Canada, 2003). The implied message for Canadians is clear: without significant immigration, Canadas economy cannot grow or, in the words of a Southam News national editorial published after a release of 2001 Census data last year, without more people we cant sustain our well being, let alone do better. With our low birth rate, immigration is therefore vital (Southam, 2002). This begs the question of whether Canadians need or want a larger population. The government has, however, no plan for how large a population the country as a whole should have and has certainly not asked the people of Canada what their preferences are in this regard. To say that we need a larger work force, however, is premised on the assumption that we need one because we are going to have a larger population. While it is probably safe to say that few Canadians want to see their communities diminish in size, there are probably manyparticularly among those living in large metropolitan areaswho do not want to see their cities and towns become a great deal larger. While arguments can be made both for and against population increase, the StatsCan statement that there is a growing reliance on immigration for growth in the labour force implies that we have no choice in the matter, that the population is going to increase, the work force must continue to grow, and we can only achieve this with large-scale immigration whether we like it or not. As for the fact that most of the recent increase in the work force has taken place because of immigration, this is hardly surprising since most of the population increase has occurred for precisely the same reason. The questions remain, however, as to whether we really need or any want such increases.

Skills shortage?
Canada has benefited from immigration in many ways over the years, ranging from the populating of the West in the early part of the century to the arrival of new human capital and the enrichment of our society through diversity in more recent decades. As well, we have been able to meet humanitarian goals by accepting refugees fleeing persecution. However, claims that that Canadas economic well-being depends on continued population growth, or that we are facing a massive skills shortage that we cannot meet without large-scale immigration, are simply not warranted by the facts.

Fraser Institute Digital Publication
February 2003
Is there a Looming Labour Shortage and Can Immigration Fill the Gap? 2

A paper on immigration policy released in September by The Fraser Institute demonstrated that economic growth does not require increases in population (Collacott, pp. 6, 7). A study by the Economic Council of Canada found that in the past century, the fastest growth in real per capita income occurred at times when net migration was zero or even negative (Economic and Social Impacts, p. 29). In similar vein, a report issued by Health and Welfare Canada noted that, according to the OECD, there was no correlation whatsoever between population growth and economic growth in its 22 member countries Charting Canadas Future, p. 9).
There is no question in this regard that women all over the world are having fewer babies and population growth is slowing down and will eventually cease, barring an unlikely reversal of this trend. StatsCan projections show that without any net immigration or change in the fertility rate, the Canadian population will begin to fall below current levels in the late 2020sbut not until then (Statistics Canada, 2001, p. 64). The fact that Canadians are living longer, when combined with the low fertility rate, also means that we will have a greater proportion of retired persons per worker than at present.
This need not be a problem, however, as other countries such as Sweden, which have populations already as old as ours will be several decades from now, have been able to cope with such a development through a more rational use of the workforce, including better training and education, more use of women, and allowing older people to continue working if they choose to do so. Some experts, indeed, believe the aging of the population will bring with it advantages to society. (Andrew M?ette (2002) of the University of Ottawa, for example, identifies a number of benefits, including the fact that an aging population will be well suited to the new economy, which demands more brains and less brawn.) There is considerable evidence, therefore, that Canada is well placed to deal with an increasing percentage of retirees, providing we have a well-qualified workforce, make good use of it, and have normal increases in productivity. Whatever the problems associated with an aging population and whatever solutions are devised to meet them (and a number of these are described in The Fraser Institute paper referred to above), it is abundantly clear that immigration does not provide a practical solution. Not only do newcomers
themselves grow old, but they also tend to have families just as small as Canadian-born after they settle here. A United Nations study concluded that immigration can only serve as a tool to arrest the aging of the population if carried out at levels that are unacceptably high and ever-increasing (Replacement Migration). Fraser Institute Digital Publication
February 2003 Is there a Looming Labour Shortage and Can Immigration Fill the Gap?