Wage Growth Picks Up Again in July

Key Insights

Despite signs that the slowing economy is starting to weigh on the labour market, layoffs in Canada have thus far remained remarkably stable. While job losses in the tech and financial sectors reflect sector-specific pressures, widespread job cutting has yet to materialize. Instead, falling job vacancies appear to be driving the recent rise in the jobless rate. Our Canadian Hiring Index reveals that online job postings fell to an 18-month low in June and are trending down across most industries, occupations, and jurisdictions. Mixed economic signals raise questions about the scale of the developing slowdown. As a result, firms are proceeding cautiously, wary of laying off staff prematurely but reducing hiring until a brighter picture emerges.

In July, the federal government launched a new category-based immigrant selection initiative aimed to fast-track candidates with STEM or French-language skills applying to Canada’s Express Entry system. According to the government, this move aims to address specific labour market needs and bolster support for Canada’s French-speaking communities. The change comes as labour demand in STEM-related industries such as professional, scientific, and technical services wanes and the jobless rate creeps upward. Concerns have been raised that by prioritizing skills in this way, other attributes may be overlooked. Immigration selection must be responsive to an ever-evolving labour market while seeking to address persistent skills gaps, such as in the healthcare sector. Increasing the overall productivity of the labour force must also remain a guiding light in the process.

More frequent extreme weather events in Canada, such as wildfires, tornados, and flooding, are a sobering reminder of the impact of climate change. Climate change is a disruptive force that is already affecting the economy and will increasingly threaten livelihoods, infrastructure, and supply chains. Natural resource-reliant industries, including mining, forestry, fishing, and agriculture, are especially vulnerable, posing a threat to jobs and incomes, particularly in regions heavily reliant on these sectors. Climate displacement will also increase, stoking higher levels of global migration. Canada is likely to play an important role as a destination country for the climate refugees of the future. Meanwhile, the push to reduce carbon will drive technological change causing the employment and skill makeup of the economy to change.