Labour shortages getting worse

Labour shortages have intensified in recent months, which could both act as a brake on the recovery and lead to a stronger acceleration in wage growth. According to the CFIB Business Barometer, the share of small firms suffering from labour shortages surged over the summer, and this suggests that labour shortages are now as much of an issue as in the US. Part of the recent surge could be a seasonal effect, with the lack of temporary immigration causing problems in sectors such as hospitality and agriculture during their busy periods. What’s more, there could soon be an increase in jobseekers, because many people who lost their jobs during the pandemic will soon see their CRB payments reduced or stopped altogether. However, this will probably only help to ease the shortages of unskilled labour. For skilled labour, it is hard to see the issue being resolved until immigration picks back up. While the government has ambitious immigration targets, the reality is that the IRCC is still only processing permanent resident applications from people already in Canada. Even if the IRCC soon invites applications from people outside of Canada, the processing times mean it is unlikely we’ll see a meaningful pick up in immigration until at least the second half of next year.