Nov 23, 2022
In its battle to temper inflation, the Bank of Canada is facing two major complicating factors: a tight labour market putting upward pressure on wages and a weak Canadian dollar, now tenuously linked to oil prices, that increases the cost of imports. The federal government, aiming to help companies fill vacant positions and boost economic growth, recently announced a target of bringing in 1.4 million immigrants over the next few years. But Stephen Poloz, Osler Special Advisor and former Governor of the Bank of Canada, tells the Financial Post that such measures must be paired with increased clarity around the immigration process and the future of net-zero energy policies in order to achieve their intended effect.
With other countries around the world also competing for skilled immigrants to address their own worker shortages, Stephen points to Canada’s high cost of living and the lack of funding for post-secondary education as two flaws in the current system.
“We need to still get our act together and make sure it’s welcoming, it’s easy instead of painful, the processes need to be better,” Stephen says. “How does a business grow if they can’t get workers?”
The government’s ambitious immigration target isn’t guaranteed to draw those workers to available jobs, either.
“Sounds good on paper,” Stephen says. “But what could go wrong with it? Canada is rapidly developing a reputation as a place that’s really, really expensive to land in, and so I think that’s a worry.”
“If companies can’t get workers, they’re not going to make an investment.”
Clarifying what the road to net-zero carbon emissions by 2050 looks like could also bring investment back to Canada’s energy sector.
“I just think giving some daylight to that might help restore that normal relationship between the loonie and the energy sector,” Stephen suggests. “Right now, there’s too much uncertainty for it to have that (relationship).”
While the industry shifts to more renewable sources in the coming decades, fossil fuels can help to provide energy security in the meantime, with oil companies playing a role in that transition.
“That’s not the same as saying ‘Just leave them in the ground,’” he adds. “It’s a really big difference.”
You can read the full article, “How Stephen Poloz thinks Canada can solve labour shortages and its lagging loonie,” on the Financial Post website.