Unemployment rises in Canada

 

Temporary residents and recent immigrants drive up Canada's unemployment rate. Those who came to the country to fill the labor shortage during the Covid pandemic are now struggling to find work.
The unemployment rate for temporary residents, including foreign workers, international students and immigrants to Canada, hit 11 percent in June, according to economic analysis firm Bloomberg. Immigrants who landed in the past five years are struggling to find work, with their unemployment rate hitting 12.6% in June. Bank of Canada Governor Tiff McClem said pressures in Canada's labor market have hit young workers and newcomers to the country.

Unemployment in Canada rose to 6.7 percent in August. This is the highest rate since May 2017. The Bank of Canada cut its key interest rate for the third time in a row on Wednesday. It has also signaled that interest rates will have to be cut further if inflation rises. The Bank of Canada cut interest rates by 25 basis points to 4.5%. In June, the interest rate was 4.75 per cent, down from five per cent.

New rules to control people entering the country on temporary work visas will come into effect from September 26. The new move by the Canadian government comes at a time when job opportunities in the country are decreasing and indigenous youth are unemployed.

The existing opportunity for temporary foreign workers has been reduced to 10 percent with lower wages of up to 20 percent in various job sectors. The country is facing extreme unemployment. Canada's unemployment rate is 6.4 percent. But according to figures from the Canadian Ministry of Employment, Workforce Development and Official Languages, the youth unemployment rate is 14.2 percent.

The number of work visas granted between 2021 and 2023 has also increased. Last year alone, 2.4 lakh people came to work in Canada through the TFW system. Most people worked in the restaurant and retail sectors.

At the same time, with the implementation of the immigration policy in Canada, many foreign students are in crisis. It is reported that about 70,000 foreign students are facing the threat of expulsion in Canada. The challenge for the students was that the study permit was limited and the permission for permanent residence was cut. Many graduates will reportedly face deportation later this year as their work permits expire.

The government has reduced the number of permanent residence applications by 25 percent through new provincial policies. It is estimated that 37 percent of all students in Canada in 2023 will be foreign students. The Canadian government says it is straining housing, health care and other services. Considering this, the issuing of study permits to foreign students for the next two years is controlled.

Areas with an unemployment rate of six percent or more will be barred from hiring temporary foreign workers. The number of low-wage temporary foreign workers that employers can hire will be reduced to 10 percent of the total labor force. Currently, the government has announced changes such as reducing the permit of low-wage temporary foreign workers from two years to one year. Some sectors are exempt from these changes, including agriculture, food processing, construction and healthcare.

According to estimates, immigration accounted for the vast majority of Canada's population growth last year. Justin Trudeau and his government have already been criticized for increasing immigration without increasing services and housing.

According to Employment and Social Development Canada, the government has issued approximately 1,83,820 temporary foreign worker permits in 2023. But this is 88 percent more than in 2019. By early 2024, the government had allowed employers to hire 28,730 people through the low-wage stream of the Temporary Foreign Worker Programme.

There is a significant growth in the number of Indians in Canada. 26,495 workers from India came to Canada in 2023 under the Temporary Foreign Worker Program. In 2022, 2,20,000 new students came to Canada from India. India has also become the country that sends the most students to Canada.

Between 2000 and 2020, the registered Indian population in Canada increased from 670,000 to 10 lakh. As of 2020, there are 10,21,356 registered Indians living in Canada. According to the Ministry of External Affairs, there are currently about 2.8 lakh Indians in Canada, including 1.8 lakh people of Indian origin.

The Canadian government aims to reduce the number of temporary residents here to five percent of the total population within three years. It was 6.8 percent as per the last April estimate. Employment Minister Randy Boissonault says the current measures are expected to reduce the number of temporary foreign workers by 65,000.

In order to reduce the number of foreign students arriving in the country, Canada has recently announced measures including doubling the cost of living for foreign students. Opinions are also rising that the recent diplomatic rift is behind Canada's policy change affecting Indians.