Hiring challenges expected to limit Quebec job losses in 2024, report says

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Unemployment in Quebec is headed higher, but hard-to-find workers are one of the reasons job losses will probably be more limited than in past downturns, a new report says.

Joblessness in Canada’s second-most populous province could hit as much as six per cent in 2024, the Institut du Québec (IDQ) said Wednesday in its annual roundup of the provincial job market. Demand for workers is likely to remain high, especially in sectors such as construction and health care, researchers at the non-profit institute predict.

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Quebec’s economy created about 67,000 jobs, mostly part-time ones, between December 2022 and December 2023 — a growth rate comparable with the pre-pandemic boom years the province experienced. Unemployment nevertheless rose to 4.7 per cent by year’s end from 4.1 per cent 12 months earlier as an influx of immigrants boosted the working-age population.

“It’s one of the lessons of the pandemic,” IDQ executive director Emna Braham, who co-authored the report, said in an interview. As the economy slows and consumer demand ebbs, “many employers have preferred to eliminate positions for which they couldn’t find candidates rather than laying off staff. Many of these employers expect to have difficulty recruiting.”

In the 1980s and 1990s, recessions routinely pushed Quebec’s jobless rate above nine per cent.

After years of historically low unemployment rates and thousands of unfilled positions, Quebec saw excess labour demand start to shrink in 2023.

Quebec’s potential pool of workers grew faster than job creation just as economic output was cooling, IDQ researchers say. The province’s labour force grew by almost 100,000 people last year, largely because of the arrival of new temporary residents. At 2.1 per cent, the growth in the labour force outstripped the 1.5 per cent pace of job creation.

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By year’s end, job vacancies across the province had plunged 29 per cent to 149,000.

“We’re going through a slowdown, which means that the demand for workers from many employers has dropped because business is not there,” Braham said. “At the same time, a portion of the vacant jobs have been filled, which is particularly evident in the restaurant industry and lodging. We also have entrepreneurs who have reviewed their way of doing business — for instance, by cutting back on opening hours. There’s an adaptation taking place.”

Immigrants have borne the brunt of the downturn. Of the 49,000 new unemployed that Quebec added between December 2022 and December 2023, 13,000 were temporary residents, the IDQ report says.

Permanent immigrants have been hit even harder, accounting for more than half, or 27,000, of the new unemployed in Quebec — which boosted their jobless rate to 7.5 per cent. Given that Quebec had done a better job of integrating its immigrants into the labour force in recent years, the increase comes as a surprise, IDQ researchers say.

“These are people who have been selected because they meet the needs of the economy, so it’s worrisome to see that their unemployment rate has risen faster than the provincial average,” Braham said. “Even a moderate slowdown is causing damage.”

Immigration levels will continue to affect unemployment rates in 2024, IDQ researchers say. At the same time, recruitment problems will persist in key sectors such as health care and construction.

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Massive housing needs, coupled with Hydro-Québec’s plan to spend up to $185 billion on infrastructure, mean that competition for construction workers will be especially fierce in coming years.

“We’ll need to identify what the priority projects are,” IDQ chief economist Simon Savard, another co-author of the report, said in the interview. “Ultimately, we’re going to need to make choices.”

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