A mass exodus has commenced in Silicon Valley. Last month alone, Oracle Corporation, Tesla Inc., Charles Schwab Corporation, SpaceX and Hewlett-Packard Company announced relocation plans. Amid the pandemic, companies and their employees realized that remote work offered an opportunity to improve their competitiveness and quality of life elsewhere. But they are not coming to Canada. Instead, they are moving to jurisdictions that actively recruited their entrepreneurs and employees.
Attracting top talent is already posing a challenge for Canada’s most innovative companies. Canada produces high-quality graduates and attracts highly skilled immigrants. But the tech sector continues to have key positions go unfilled due to labour shortages in strategic roles. At present, there are more than 54,000 tech-sector job openings.
This, in part, has been a result of multinational tech companies having set up engineering outposts here over the past generation to take full advantage of our relatively low-cost talent. The pressure on Canada will continue to grow as foreign companies look for top-tier talent. The International Monetary Fund reports there will be a shortage of 85 million tech workers by 2030.
Talented workers and the intellectual property (IP) they create and commercialize are the two most important ingredients of modern business globally. While IP permeates borders with relative ease, talent has been bound to traditional national structures.
The pandemic has begun to erode this construct, with companies looking for the best talent on the planet as the normalization of remote work continues. Under our current circumstances, Canada is more likely to be a victim than a beneficiary of this shift.
Canada’s productivity has already been lagging for a generation. Despite all the attention given to increasing investment in research and development and growing rates of entrepreneurship, our national innovation outcomes have continued to lag those of other advanced industrialized countries.
One bright spot has been Canada’s ambitious approach to economic immigration. Statistics Canada reported that six out of every 10 immigrants in 2019 were selected for their economic potential and that Canada’s immigration levels will rise to 350,000 in 2021.
However, our immigration system will be under immense pressure to deliver in a post-pandemic world. Canada’s demographic reality is almost as bleak as our innovation outputs. By 2035, another five million Canadians will retire, bringing our worker-to-retiree ratio down to 2:1. For reference, it was 7:1 in 1971.
The hope that the world’s top talent will simply come to the conclusion that they should call Canada home is wishful thinking. But hope and wishful thinking are not a viable macroeconomic strategy. If immigration is going to maintain and grow its positive impact on Canada’s economy, the government of Canada must reorient its immigration policy.
Today, Canada’s economic immigration is largely passive and convoluted. Would-be immigrants apply, and their paperwork is processed. In practice, potential employers and university admissions support quality candidates, but these are consecutive, time-consuming processes. Application processing took eight months on average in 2019.
Worse yet, the points system used to assess potential immigrants is based on dated labour market statistics with generalized job categories. Convoluting the system more, provincial governments also have the ability to prioritize certain categories of economic immigrants under the provincial nominee program.
This system has, in part, contributed to Canada’s long history of immigrant credentials not being recognized. In other instances, highly coveted professionals or students have chosen other jurisdictions before receiving approval from Canadian authorities.
If Canadian companies and postsecondary institutions are going to get the talent required to expand the Canadian economy, the government must shift to an aggressive, co-recruitment model of top talent globally. Real-time labour demand informing the recruitment of would-be immigrants is the only way to be competitive in the global innovation economy.
The government does have a role in ensuring that employers are not simply trying to conduct salary arbitrage with domestic candidates and that postsecondary institutions are not simply looking to increase revenue through higher fees for foreign students. But in an increasingly competitive world, a job offer from a credible Canadian employer or admission note from an accredited Canadian postsecondary institution should be tantamount to approval of residency in Canada unless there are grave security concerns.
This is not to say immigrants should be bound to the institution that sponsors them. Canada benefits regardless, as long as the immigrant continues to be employed or educated in Canada. The newcomer’s challenging path to setting up a new life in a new country also becomes streamlined, as finding a quality job is often one of the greatest barriers to making the immigration journey.
The government of Canada has had some experience with an employer-driven approach to highly technical talent immigration. It created the Global Skills Strategy, a program that allowed employers to fast-track work-permit processing to two weeks for skilled immigrants. Over its first two years, 40,000 immigrants have come to Canada through this program. The government has also operated the Start-up Visa Program for entrepreneurs setting up business in Canada with accredited backers.
The government has demonstrated it has the ability to shift its thinking on immigration. It now must take that experience, shed the passive approach and assert a culture of recruitment. Our immigration officials will have to be less application processors and more head-hunters for the entrepreneurs, engineers, researchers, finance professionals, marketers, salespeople and other strategic vocations required to fuel Canada’s economy and vibrant society for generations to come.
Neil Desai is an executive with Magnet Forensics, a Canadian technology company, and a senior fellow with the Munk School of Global Affairs and Public Policy at the University of Toronto and the Centre for International Governance Innovation.
Chris Albinson is the founder and managing director of BreakawayGrowth, a venture capital firm with investments in Canada and the U.S., and a co-founder of C100.
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New coronavirus variants pose major risk to the global economy, IMF warns – CTV News
The pandemic could slam the brakes on a global economic turnaround this year despite mass vaccination programs and unprecedented levels of stimulus, according to the International Monetary Fund.
The IMF expects the global economy to grow by 5.5% this year, it said on Tuesday, or 0.3 percentage points faster than its previous forecast in October. The upgrade reflects “expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies,” the group said. (The IMF estimates that the world economy shrank by 3.5% in 2020, its biggest peacetime contraction since the Great Depression.)
But it also warned that surging infections in late 2020, renewed lockdowns and logistical problems with vaccine distribution could hamstring growth. If new variants of the coronavirus also prove difficult to contain, global output this year would be 0.75% less than the IMF expects.
Looking further ahead, the IMF expects global growth to slow to 4.2% in 2022.
“Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens,” Gita Gopinath, chief economist of the IMF, said in a blog post.
Some countries will recover more quickly than others. China, which was the only major economy to grow in 2020, is forecast to achieve growth of 8.1% this year. The United States should emerge from its deep slump to expand by 5.1%, a pace that’s 2 percentage points faster than the IMF predicted in October.
The 19 countries that use the euro are expected to see growth of 4.2% in 2021. The United Kingdom, which endured a 10% contraction last year as it left the European Union and is now battling a new coronavirus variant, would rebound with relatively modest growth of 4.5%.
“The wide divergence reflects to an important extent differences across countries in behavioral and public health responses to infections, flexibility and adaptability of economic activity to low mobility, preexisting trends, and structural rigidities entering the crisis,” the IMF said.
The pandemic is causing “exceptional uncertainty,” according to the IMF.
“Although new restrictions following the surge in infections (particularly in Europe) suggest growth could be weaker than projected in early 2021, other factors pull the distribution of risks in the opposite direction,” the IMF said.
If the vaccine distribution and efficacy go smoothly, for example, output could exceed expectations by as much as 1% globally, with companies hiring and expanding capacity in anticipation of rising demand.
New coronavirus variants pose major risk to the global economy – CNN
Where the lopsided economic impact of COVID-19 in Canada goes from here – CBC.ca
All economic downturns are unfair. Some people inevitably get hit harder than others. But almost a year into the COVID-19 catastrophe, the data makes it abundantly clear: the impact of this crisis is uniquely unequal.
More than a million Canadians remain under- or unemployed while millions more simply adjusted to working from home.
The second wave of COVID-19 cases and increased restrictions in many parts of the country have clobbered the most vulnerable workers who were already struggling. But many Canadians who were lucky enough to keep their jobs have been able to cut expenses on travel, commuting and child care. In doing so, they’ve saved more than $170 billion, collectively.
Stock markets have soared to all-time highs even while the global economy collapsed. Since bottoming out last April, both the Dow and the S&P are up more than 60 per cent.
Djenaba Dayle lost her job as a server at events in Toronto when the pandemic hit last March.
“You watch the news and you see people who are privileged and fortunate enough to be in a position to save money right now,” she said. “And I know that, for myself, it’s just debt.”
When COVID-19 began spreading last year, Dayle knew tough times were coming. She applied for the Canada emergency response benefit (CERB) and eventually the new extended employment insurance programs. But it’s still not enough, she said.
“It’s either pay my full rent and not eat or eat and get behind in my rent.”
On the other side of the country, Cole Westersund has experienced both sides of the pandemic’s economic divide. Last March, he was terrified that his work as a real estate agent in Vancouver would grind to a halt along with the rest of the economy.
“It was incredibly difficult to face the fact that you might not be able to put food on the table,” he said.
Then, about a month into the pandemic, some restrictions began to lift. And suddenly his phone started ringing, he said. Clients were looking for properties out of town.
“Coming out of the lockdown, they figured, ‘Hey, we have this money saved up,'” said Westersund. “If people were fortunate to keep their jobs, [they figured] let’s change our lifestyle. You know, if you’re a skier, if you’re a hiker, a biker or a fisherman.”
He said people were looking for more space and privacy or even just a break from being cooped up because of public health restrictions.
And business has been booming ever since, he said. He’s been struggling to keep up with demand. The sale of recreational real estate, such as cottages, has soared 11.5 per cent in the first nine months of 2020.
But Westersund said it’s important to remember every purchase is also a sale. And many of the clients selling their properties were listing because times were so tough.
“Stepping into a client’s house, knowing full well that the reason that they’re selling is because they need the money, it’s a difficult conversation to have,” he said.
It is the definition of a K-shaped recovery. People on the lower branch have seen their fortunes fall and have not yet recovered while those on the upper branch have prospered.
Experts worry the increased division between those two branches may outlast the pandemic.
“Some of these effects could end up being permanent, and the bottom part of the K could persist for quite a while,” said former Bank of Canada governor Stephen Poloz, speaking at an online event on Jan. 13 hosted by Western University’s Ivey Business School.
The concern is that the worsening inequality of the economic downturn will lead to what economists call scarring: long-term job losses that result in lower growth and drag the whole economy down.
Poloz said the key right now is to support Canadians who are still reeling financially. He pointed out that interest rates remain at historic lows.
“The main thing is for us to focus on boosting growth,” he said. “I’m hopeful that, in this context that we find ourselves, we can have more federal and provincial collaboration that allows us to do some things that will boost growth forever.”
WATCH | Canadian entrepreneurs on navigating the pandemic:
Djenaba Dayle, the server from Toronto, takes umbrage with the term scarring.
“They’re deep, festering, open wounds,” she said. “It’s not a scar. Things have not healed over.”
In order to heal, she said, Canadians need to rethink how social programs work. Dayle said the COVID-19 crisis is a glaring reminder that the support system wasn’t adequate before the pandemic hit.
“[We need] changes to EI, changes to how we approach people who are renters, changes to how we support folks who are down on their luck,” she said.
Dayle said the minimum wage needs to rise, and that rent control is crucial — and not just during a crisis. Several economists have proposed introducing automatic triggers that would restart more intensive support programs such as CERB when major trouble hits.
On the upside, most experts agree the recovery is nearly here. Daily COVID-19 case numbers are finally starting to decrease. Vaccines are beginning to roll out, albeit slowly. Economic forecasts from the major Canadian banks suggest blockbuster growth in April, May and June. Even once you factor in a negative quarter of growth to start the year, economists are predicting GDP will come in around 4.5-5 per cent for 2021 and at a similar level in 2022.
“It’s a massive acceleration of growth that we’re expecting over the next couple of years or so,” said Derek Holt, vice-president and head of capital markets economics with the Bank of Nova Scotia.
It’s been decades since Canada has seen that level of growth. Growth like that means investment and building — and that means jobs will be created. It means everyone benefits.
But will Canadians remember how much people needed government assistance during the worst of the pandemic? Will they remember how insufficient it was for many?
Dayle isn’t sure
“Let’s say I have very little faith,” she said. “But [I have] a great deal of hope.”
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