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Bank of Canada’s governor Tiff Macklem says that the country should bring more immigrant workers to fill the vacant job positions in order to avoid more interest rate increases. In his speech at the Conference on Diversity, Equity and Inclusion in Economics, Finance and Central Banking in Ottawa he indicated that the labour market in the country is out of sync. “Businesses have had a hard time hiring enough workers to produce all the goods and services Canadians want to buy. Job vacancies are elevated, and firms report widespread labour shortages. This is symptomatic of an economy that is overheated. Businesses can’t keep up with demand, and this is driving prices higher, he pointed out.
If there are not enough workers, the only solution to curb inflation will be increasing the interest rates and thus reducing the spending. So, bringing more immigrant workers could mean that the interest rate will not have to be increased.
Why Canada needs immigrants?
In 2022, Bank of Canada raised its target overnight rate seven times, which is currently 4.25 per cent. This is the highest rate since 2008.All these can be seen as the economic impact of COVID-19 and as it was predicted much earlier, Canada needs more immigrants to tackle these impacts.
As the economy is recovering fast from the impact of the pandemic, there is a massive shortage of employees in several sectors. In the third quarter of 2022, there were a total of 959600 job vacancies. In the second quarter of the year, the number was 992200.
In order to address this severe labour shortage crisis, Canada has increased the number of immigrants being welcomed to the country. As per the Immigration Levels Plan for 2023-25, the country will be welcoming around 500000 in a single year by 2025. The total number of permanent residents who will come to Canada during the plan period is 1.45 million.
Economic immigration to Canada
Provincial Nominee Program and Express Entry are the two major economic immigration pathways through which Canada will be welcoming a high number of immigrants during the Plan period. PNPs allow Canadian provinces to nominate eligible candidates for permanent residence in the country. At the same time, Express Entry allows immigration candidates to apply for permanent residence through three economic immigration programs, which are the Federal Skilled Worker Program (FSW), Federal Skilled Trades Program (FST), and Canada Experience Class Program (CEC), or a participating provincial immigration program.
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