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Meanwhile, the 40 richest Canadians grew their wealth by $95B
I do think immigration is the main cause of the unemployment crisis, mass immigration while the Bank of Canada raised interest rates was always going to cause mass unemployment.
During Covid they did stimulus and QE, which caused the 8% inflation. If you see the Phillips curve you’ll see that causes a labor shortage in the short term. This is a natural part of an economy, and wipes out the wealth inequality caused by asset appreciation via bargaining power for wages, if you rememeber the “quiet quitting” phenomenon a few years back.
The Federal government then did mass immigration, 1.4 million a year, tripling immigration over 3 years. They also allowed students to work 40 hours. This decreased labor pressure and lowered wage growth.
The Bank of Canada then raised interest rates to cool the job market. Now we have cooled wages, less need for workers, and an inevitable surplus of workers. All this was also done when we had a preexisting housing shortage, so rents and housing prices dramatically increased as well.
This doesn’t seem like a logical argument for today.
Unemployment is either a too many workers or too few jobs issue.
Of course both can happen at the same time and that is to a degree what’s happening here.
The most significant shock to the Canadian economy in the past year is the trade war with the United States. This would be the primary reason in 2025 and 2026.
The immigration from years ago exacerbates the issue but Carney’s government has scaled back significantly in the past year.
Youth unemployment is up to 14.1% because cost of living has caused people to delay retirement and automation tends to snap up entry level jobs first.
I would look at this information and blame US trade policy primarily. Then maybe Trudeau for poor planning though doubt he could have anticipated the Canada US relationship turning sour.
Without immigration, Canada’s population is in a state of involution which is considered fairly incompatible with the idea of a growing economy. Canada and many Western countries are extra fucked because of the population skewing towards elderly.
Carney is slowing immigration likely because he’s anticipating Canada’s economy to stagnate or shrink in the short term. He’s not a miracle worker, the best he can likely do is limit the pain from the US’ betrayal but it’s going to be fairly improbable to create a win from the situation.
Housing is a factor. It’s a bit asinine to invite people over when your housing market is a hot mess but Trudeau did it anyways.
Canada is going to need to bolster its housing situation, healthcare system and other social institutions for the betterment of its people but also to be an attractive destination for immigration or risk losing its standing as a middle power (especially with the US no longer in its corner).
Well we had a large demand for workers when inflation was high, because there was a lot of new money supply created via cheap borrowing and QE. That money floods the economy and leads to shortages in labor. It also leads to rising asset prices as things are bid up, housing and gold are a good example.
But as we raise interest rates employment falls, as money supply is sucked from the economy. Now the employment shortage has reverted to the mean. Saying its automation seems silly when we can see the money supply growth, and its doing exactly what it meant to, you sound like Elon Musk trying to shill an LLM.
The people we brought in were less educated, as per the Trudeau himself, hence its not creating new industries or exports. Which is what countries typically due, attracting high skilled immigrants that efficiently increase exports and productivity, and lead to higher per capita standards of living. Which we had the reverse of this, as per capita GDP fell and Caroline rogers is ringing the alarm bells on productivity:
I’m not sure why you’re looking at Canada in isolation when the tariffs introduced by Trump have been the biggest shock to the Canadian economy in the past year. It seems that you really want to attrubute this to immigration / inviting temporary foreign workers (beyond Canada’s capacity) and, while that is a factor, I think Canada having its bestie (who gobbled up 70% of its exports) stab it in the back is a more logical explanation as to why unemployment has rise recently.
Immigration is going to be crucial to Canada’s growth story especially based on current local population trends. Canadian universities like UofT, McGill, UBC have already signed agreements in countries like India to create centers of excellence/innovation campuses in emerging markets with more favorable demographic skews (ie. more young participants in the workforce vs retirees) and it would be ill thought out of Canada to not offer those that attend these transnational education institutions preferable conditions to immigrate to Canada.
Per capita GDP has been falling for a decade. We had the second to last per capita GDP in the 38 countries of the OECD the last decade. Its been a problem long before tariffs.
Mass immigration into a housing shortage benefits who? Definitely not renters or non-asset holders, so what kind of regressive policy is it?
I’d be fine with it if we built the housing and infrastructure first, and there was a real labor shortage caused by more than just inflation.
100% of your problems could have been solved if we had max cap networth and 100% taxes above that cap.
Ya maybe, if you could stop investment from fleeing Canada; only because it would drastically raise inflation and interest rates, which would make mortgages far more expensive. Of course anyone with a large mortgage would be made poorer.