Canada needs to go on a global talent hunt

By New Canadian Media

Canada must double down on attracting more skilled immigrants to counter the effects of an aging population and propel the nation’s post-pandemic economic recovery plan, states a new report by the Business Council of Canada.

The council, whose member companies employ 1.7 million Canadians, said among the key priorities for Canada in the post-pandemic era will be attracting and retaining international students.

“This large cohort of talent represents a huge opportunity for Canada. It makes eminent sense – particularly in parts of the country where the labour supply is declining – to retain young graduates who have a Canadian education, relationships and connections to the country,” said the report entitled “Powering a strong recovery: An economic growth plan for Canada”.

It was released just before Ottawa announced last Friday that it is dramatically increasing its

immigration quotas for the next three years, which could see more than a million newcomers arrive at Canadian ports of entry.

"Immigration is essential to getting us through the pandemic, but also to our short-term economic recovery and our long-term economic growth,” said Marco Mendicino, Minister of Immigration, Refugees and Citizenship.

“Canadians have seen how newcomers are playing an outsized role in our hospitals and care homes, and helping us to keep food on the table. As we look to recovery, newcomers create jobs not just by giving our businesses the skills they need to thrive, but also by starting businesses themselves. Our plan will help to address some of our most acute labour shortages and to grow our population to keep Canada competitive on the world stage," he said in a statement.

Immigrants today account for 33% of all business owners with paid staff, and 25% of workers in Canada’s health sector are immigrants.

Goldy Hyder, president and CEO of the Business Council of Canada said the new increased targets by Mendicino will help to strengthen the country’s economy at a crucial time.

“There is widespread agreement across party lines that immigration is essential to long-term economic growth,” said Hyder.

“Newcomers bring energy, skills, new ideas and entrepreneurial spirit. They start companies, fill skill shortages, buy houses and pay taxes. The Minister’s plan will allow Canada to make up lost ground as the pandemic eases. It will inject new dynamism into our economy when we need it most.”

The Business Council of Canada in its report said a credible plan for economic growth rests on three main pillars: people, capital and ideas;

People: We need to cultivate and enhance our human capital by developing a more agile and adaptable workforce, doing more to help young Canadians build rewarding careers, and building on the success of our immigration system to make our country an even more powerful magnet for international talent.

Capital: We need to strengthen business investment by adopting a more focussed approach to infrastructure, enhancing interprovincial trade, removing unnecessary regulatory barriers, and ensuring that our tax system is globally competitive.

Ideas: In a world in which wealth creation is driven by knowledge and innovation, we must get better at commercializing our research, protecting intellectual property, harnessing the power of public procurement, and pursuing a more intentional industrial strategy that leverages Canada’s domestic strengths for success in the global market

On education, the Council said Canadian universities, colleges and polytechnics have made tremendous strides in attracting international students over the past decade.

The numbers have increased from roughly 240,000 in 2011 to 495,000 in 2017.

Earlier last month, Canada opened its border to international students. Foreign students can now apply to designated learning institutions (DLI) or colleges and universities that have a COVID-19 readiness plan.

“Investing in human capital and attracting talented newcomers to our shores are among the smartest possible policy responses to the unceasing forces of disruption, dislocation, and skills-based change,” stated the Council’s report.

“Global competition for talent is intense and likely to become even more so as companies and economies vie for advantage in the post-pandemic world. Canada must pursue an unrelenting, people-centric strategy,” it concluded.

Over the coming months, the Council will be reaching out to policy experts, partners and stakeholders across the country for input to define a path forward with concrete and detailed recommendations in each of the priority areas identified in the report.

Six key obstacles to growing Canada

1. Canadians are getting older. The share of the population that is 65 or older was 14 percent in 2010 but is forecast to reach 20 percent by 2024. An ageing population weakens GDP growth and makes it harder for employers to find the people they need to expand and grow. It also puts upward pressure on government spending, notably for health care and pension costs.

2. We import more goods and services than we produce. Over the past decade, our country’s current account deficits with the rest of the world have hovered between two and three percent of GDP. Non-energy exports have essentially remained flat and the share of Canadian exports that go to emerging economies is among the lowest of G7 countries (Fall Economic Statement 2018).

3. Canada struggles to grow firms with the scale to compete globally. In 2020, only 13 Canadian companies were listed among the Fortune Global 500, an annual ranking of the top 500 corporations worldwide as measured by revenue.

4. Business investment in Canada has lagged that of other major advanced economies in recent years. According to the federal government’s 2019 Economic and Fiscal Update, real business investment increased between 2015 and 2019 in the United States, the United Kingdom and Germany. In Canada, it fell sharply and has yet to recover.

5. A 2018 Brookings report found that Canada’s advanced industries – including sectors as diverse as auto and aerospace production, information technology and oil and gas extraction – are far less productive than their U.S. counterparts: “In 1996, the productivity differential between the average Canadian worker in a metro area and the average U.S. worker in a metro area was about 17 percent. By 2015, that gap had grown to 100 percent.”

6. Canada’s federal debt-to-GDP ratio was 30 percent before COVID-19 but now exceeds 50 percent. This will impose serious constraints on the government’s fiscal capacity going forward. As former Bank of Canada Deputy Governor Paul Jenkins has stated, “The most durable source of funding is sustained economic growth, not a reliance on low-interest rates.”

— Business Council of Canada