Chris Albinson is the Founder & Managing Director of BreakawayGrowth, a Venture capital firm with investments in Canada and the U.S.
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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.
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.
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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.
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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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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
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