Canada Loosens Foreign-Worker Cap for Desperate Quebec Companies

(Bloomberg) -- Canada is making it easier for Quebec employers to hire temporary foreign workers in key industries like food and health care, the latest attempt at easing one of the most acute labor shortages in the country. 

Starting Monday, temporary workers from outside Canada can make up as much as 20% of the workforce for low-wage positions in certain sectors, up from 10% previously, the government of Prime Minister Justin Trudeau said in a news release. The measure is part of a pilot project announced in August that also loosens some recruiting requirements.

The moves won praise from the Canadian Federation of Independent Business, which conducted a survey of small firms in November that showed Quebec as the province hardest hit by labor shortages.   

While permit approval to bring in workers takes time, it’s still “a major improvement,” Francois Vincent, Quebec vice-president for the business lobby group, said in an interview. “Temporary foreign workers is one of the solutions.”

With unemployment in Quebec at 4.6% last month and job vacancies up 73% over two years, the provincial government has made the job market a priority of 2022. In a November budget update, it pledged almost C$3 billion ($2.4 billion) over five years to help train or attract workers in crucial sectors. 

Like firms across North America, Quebec companies have had a hard time filling low-paying jobs after the economy emerged from pandemic lockdowns. But the province’s predicament, which pre-dates the crisis, is also shaped by aging demographics, a tougher approach to immigration and a skills mismatch. 

The number of Quebec residents of working age grew by just 120,000 between 2010 and 2020, a 60% drop from the previous decade, and is set to decline by almost 100,000 between 2020 and 2030, according to a November study by Institut du Quebec, an economic think tank.

Compared to other Canadian provinces, aging workers in Quebec tend to leave the workforce faster. The participation rate for Quebeckers between 60 and 64 years old was 54% in 2021, versus 60% in Ontario and a national average of 58%.

The government has been dangling financial incentives to keep older workers on the job longer. It’s also offering scholarships of as much as C$20,000 to lure students to information technology, engineering or nursing programs. 

While Premier Francois Legault’s government initially lowered the number of immigrants it would accept, it has tempered its approach and vowed to do better of recognizing the degrees and skills of newcomers, long one of the province’s weaknesses. 

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