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Economic Viewpoint

With Non‑permanent Residents Expected to Decline, Who Will Fill Their Jobs?

June 6, 2024
Randall Bartlett
Senior Director of Canadian Economics

If the federal government follows through with its plan to reduce the number of non‑permanent residents (NPRs) admitted to Canada, our analysis suggests it will weigh on real GDP growth and inflation, notably shelter costs. At the same time, fewer NPRs should boost per capita GDP and real wage growth.

Some have argued that higher wages will persuade people to return to the labour force, but there is little evidence of people waiting on the sidelines to work. Underemployment is near an all-time low currently, as is the share of Canadians who aren’t in the labour force but who want to work. Of that latter group, the majority are of prime age and have been sidelined largely due to illness or personal/family responsibilities—considerations best addressed with public policy.

With labour likely to become scarcer and wages expected to rise, this should put more pressure on sectors of the economy most likely to employ NPRs, specifically accommodation and food services and retail trade. Unfortunately, these are also among the sectors most likely to be struggling coming out of the pandemic and to have experienced a surge in insolvencies at the start of 2024. Reducing the availability of low-cost, temporary labour will only increase their challenges. However, it may also force these low-productivity sectors to innovate quickly.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.