The structural effects of aging on the labor market, on the competitiveness of the economy, the shortage of workers and the ability to grow should not be underestimated. And to mitigate the impact, all solutions need to be explored and potentially exploited.
The problem is that every time we talk about labor shortages and population aging, which have major economic implications, the government responds with numerous commitments, intentions, programmes, reports and roundtables, but the observations do not change year after year: the Labor shortages are increasing and aging is becoming more noticeable.
Economically, these problems are structural and can cause lasting damage. These are issues that are not attractive in political discourse. They are complex, they are difficult to explain, and some solutions, especially those of immigration, are generally stuck in all sorts of partisan confrontations in the National Assembly that don’t move us forward.
Quebec’s structural problems
Immigration’s solution to labor shortages and the aging of our population is far from the only one. And it has its share of challenges. But despite the integration problems, it cannot be dismissed out of hand. For this solution to work, we need to work on the integration of immigrants.
Why am I writing this? Because Quebec is struggling with structural problems that are slowing down its economy and could affect the necessary financing of the health system, our schools and our social services as well as the care of our elderly.
The data from Statistics Canada speaks for itself:
- In Quebec, one of the most populous provinces, we find the highest proportion of people aged 65 and over with 20.6%;
- The proportion of people aged 65 and over will increase to nearly 26% by 2043, compared to the Canadian average of 23.7%;
- The demographic weight of Quebec in Canada will increase from 22.6% in 2018 to a range of 20.1% to 20.6% in 2043 according to several scenarios studied. Meanwhile, in Ontario, that proportion will drop from 38.6% to about 39.3%;
- And retirees ages 55 to 64 make up 23.2% of Quebec’s working-age population, compared to 21.8% nationally.
According to Statistics Canada,
International migration is the main driver of growth in Quebec in all scenarios, offsetting negative or declining natural increases during the projection (due to population aging) and inter-provincial migration losses in all scenarios.
In other words, without immigration, Quebec’s population growth will remain slower than elsewhere. And this fact weighs heavily on our economy and our public finances.
In a piece published last October, I explained how Québec is at a numerical disadvantage compared to Canada’s most populous provinces. I explained this:
- Since 2011, the population of Alberta has increased by 21.9%, British Columbia by 18.5% and Ontario by 15.4%. Meanwhile, Quebec’s population growth was only 8.9%;
- And then, still since 2011, the 25-54 age group, the heart of the labor force, had fallen 2.2% in Quebec, while down 4.9% in Ontario and 9% in Alberta and British Columbia .9% had grown.
To alleviate the labor shortage, we need to focus on education. Labor Minister Jean Boulet is working hard to set up various programs to help businesses and workers transform.
To mitigate the effects of population aging, we need to focus on improving productivity. And that requires automation, big investments from companies and… more hands!
In a study published last November, the Institut du Québec wrote that Quebec must ensure that it meets the thresholds set for accepting immigrants. Quebec also has to make up for the losses of the pandemic years.
Catching up on those delays on target, the Institut du Québec wrote, is important to Quebec’s economy for two main reasons. On the one hand, this immigration is intended to meet immediate labor market needs, and on the other hand, many people currently on Québec soil awaiting granting of permanent residency status risk being discouraged from leaving Québec or losing their jobs if the delays do not enter subside.
The institute called for shorter admission times for immigrants and better recognition of foreign skills and experience. Quebec announced an agreement with the federal government on April 1 to expedite the arrival of foreign workers. The Legault government also announced a few days ago that it would hold 17 missions abroad to try to attract 3,000 workers to Quebec.
We need to end the partisan debates about immigration and take more interest in economics, society, demographics, the funding of our public services. Immigration is part of Quebec’s solution to maintaining our standard of living and our model of society.