The Canadian job market seems to be undergoing a significant change, due in part to the global pandemic – there are more jobs in Canada than there are available workers to fill them all.

For example, at the beginning of November 2021, there were only about 200,000 workers available to fill an incredible 900,000 Canadian job vacancies.

Furthermore, the unemployment rate declined from 6.9% during September 2021 to just 6.7% in October 2021.

Thus, the creation of new jobs in Canada keeps going up, while the unemployment rate keeps going down.

The big question being asked in Canada is: Where are all of the workers?

Supply & Demand

Another way to describe what is occurring in the Canadian economy is that the demand for workers is going up, but the supply of workers is going down.

There are a variety of explanations for why Canada is experiencing such a major labor shortage.

First, all of the jobs in Canada that were lost at the start of the global pandemic, when the lockdowns forced millions of Canadians to stay at home, have been recovered.

In fact, there are more people working in Canada than there were in February 2020 when the pandemic began.

Second, many Canadians have been doing some “soul-searching” during the pandemic about what is most important to them.

A large number of workers have decided not to return to their previous jobs in Canada and instead, have started their own businesses so they can spend more time with their family.

Others who were thinking about retiring in the near future were prompted to go ahead and retire now, partly because of the fear of getting Covid-19 or the unpredictability of the workplace (e.g., lockdowns) or “burn-out” from working large numbers of hours or other reasons.

Third, this is the decade that several million Canadian workers of the massive “baby boomer” generation will be retiring from the labor market.

However, declining birth rates are not producing enough younger workers to replace all of the jobs in Canada being left vacant by retiring workers as well as all of the new jobs that the Canadian economy is creating.

What Does This Mean?

This brings us back to the economic Law of Supply & Demand, which basically says if the demand is higher than the supply, the price will increase, but if the supply is larger than the demand, the price will decrease.

Consequently, the major labor shortage taking place in Canada is forcing employers to pay higher wages to attract new workers and to hold on to the employees that they already have.

Employers are also being more responsive to the request of employees and job-seekers to offer flexible work schedules, allow them to work from home (if possible), and have an overall better work-life balance.

Many Canadian workers who were employed in occupations that were greatly affected by the pandemic lockdowns (i.e., jobs with face-to-face contact with the public, such as in the restaurant, retail, hotel and travel industries) took advantage of being stuck at home to train online for more resilient careers, such as in the information technology sector.

Others did not switch careers, but changed employers and received a higher salary and better benefits as a result of the competitive Canadian job market.

Consequently, certain lower-paying jobs have lost workers who have gone to the higher-paying positions with different employers where they were able to negotiate a better compensation package.

Nonetheless, about 70% of Canadian workers who were temporarily unemployed because of the pandemic remained in the same business sector when they returned to work in Canada.

Conclusion

It may be that there is a combination of factors at work in Canada, resulting in the ongoing labor shortage.

The bottom line is that workers and job-seekers are in the driver’s seat (i.e., in control) for the first time in a while, as one Canadian economist recently explained.

There are hundreds of thousands of Canadian jobs advertised, not only in the lower-paying business sectors, but also in the higher-paying skilled occupations.

The demand for skilled foreign workers has never been higher and several Canadian visa programs have been created to offer permanent residency to eligible skilled immigrants who meet the eligibility requirements.

In short, this is one of the best times to find jobs in Canada!