Immigration to Canada is improving from pandemic lows, but it’s still weak. A BMO economics analysis shows the net flow of non-permanent residents was minimal in Q2 2021. It’s better than the beginning of the pandemic when the flows were negative, but not by much. The bank sees this as a big contributor to the rising job vacancies, and will potentially force wages to rise to attract domestic labor.

Canada Is Seeing A Lot Fewer Non-Permanent Residents

Canada’s inflow of non-permanent residents is still much lower than normal. During the beginning of the pandemic, there were net outflows, but those have since reversed. Positive flows are better than contractions, but they’re still fairly close to nil, especially in contrast to pre-2020 numbers.

The lack of non-permanent residents has put a major drag on the labor supply. “This is likely adding to the labor shortage situation in Canada, as it appears difficult to pull domestic labor into jobs normally filled by foreign workers. Or it might take more significant wage increases to do so,” said BMO.