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Aftab Ahmed

May 15, 2023

Canada finds itself at a historic juncture at which the realities of an aging population coincide with an urgent need to transition toward a green economy. However, this evolution is hampered by prevalent labor market shortages, leaving the nation grappling with an important question: In this landscape, what measures can policymakers take to better prepare the market for eco-friendly jobs?

To anchor the country toward a low-carbon, high-growth future, the federal government must harmonize its priorities across environmental protection, job creation, and economic development.

Immigration, it seems, holds the key to this predicament. Traditionally, Ottawa has touted relatively open, flexible, and progressive immigration policies compared to other Western nations. Contrary to popular belief, this does not represent an open-door invitation. Rather, it functions as a mechanism for enlisting skilled workers who can bolster the economy. This strategy will remain a central component in driving forward Canada’s forthcoming policy agendas. However, Ottawa’s challenge in assisting newcomers to secure jobs that align with their pre-existing training is a source of apprehension.

To fully harness the potential of skilled immigrants, the federal government needs to take proactive measures and move beyond rhetoric in addressing the issue of underemployment. By providing effective integration support and tackling the systemic barriers that hinder the full utilization of newcomers’ skills and talents, Canada can leverage immigration as a tool for long-term economic growth.

As the Baby Boomer generation begins to retire, Canada is undergoing a momentous demographic shift. In a pre-budget article, McGill University economist Christopher Ragan addressed a complicated fiscal dilemma that has emerged as this group of seniors begins to receive Old Age Security (OAS) benefits and Guaranteed Income Supplements (GIS). Retirement income packages represent the principal and swiftest growing cost element in the federal budget, reaching about $60 billion in 2023.

This trend is expected to continue in the next decade or so. As more seniors place heightened demand on the health care system, the costs associated with age-related expenditures are projected to rise by 3 to 4 percent of national income over the next two decades. The question naturally arises: Can Canada stand by its non-working population without stimulating substantial levels of economic activity?

Bottom line: Ottawa needs to identify solutions to make “more stuff”, drive forward sustainable economic growth, and ensure the protection of its treasured social welfare system. Ideally, this should be achieved by encouraging the advancement of the green economy. This is where immigrants come in.

With a focus on attracting skilled workers, Ottawa has set a notable target of welcoming approximately 500,000 newcomers per year starting in 2025. The ideal outcome being: these individuals can help fill labour market gaps and Canada can “import” fresh ideas and expertise to support a “just” transition toward a low-carbon economy – and in doing so fuel the overarching national productive capacity.

All this seems good on paper. But, the problem of high-skilled immigrants working low-skilled jobs is not a new phenomenon. This is a consequence of deficiencies in the country’s settlement and employment services for newcomers. Though the recent federal budget underscored commendable investments in green infrastructure, renewable energy, and technology, the economic integration of immigrants remains a roadblock that has regrettably been overlooked.

A staggering 3.1 million jobs, about 15 percent of the labour force, will experience disruptions within the next decade. Eight out of the ten major economic sectors, including transportation, energy, and manufacturing, are expected to be impacted profoundly by the transition.

The potential labor market disruptions are depicted in a complex light in a report by RBC Thought Leadership. A staggering 3.1 million jobs, about 15 percent of the labour force, will experience disruptions within the next decade. Eight out of the ten major economic sectors, including transportation, energy, and manufacturing, are expected to be impacted profoundly by the transition.

In particular, the report underscores that automation and digitization will significantly affect jobs in manufacturing and transportation, while emerging fields like clean energy, infrastructure, and digital technologies will create new opportunities. The ultimate effect on the labor market will depend on factors such as the rate of technological adoption and the availability of skilled workers.

Importantly, 46 percent of new employment in natural resources and agriculture, and 40 percent in trades, transport, and equipment, will demand an enhanced skill set. The implications are even more striking for highly-paid and highly-skilled workers, such as managers in engineering, architecture, utilities, and manufacturing, who are already witnessing over 50 percent of their tasks shifting due to a combination of environmental and economic factors – a rate five times higher than the average manager.

Minister of Natural Resources Jonathan Wilkinson’s recently published Sustainable Jobs Plan aims to create thousands of new green jobs, providing a vital opportunity for the Canadian labour force. These jobs will be crucial to both mitigating the impact of climate change and to ensuring sustainable economic growth. However, the plan lacks a clear focus on integrating skilled immigrants into the workforce, leaving behind a portion of untapped human capital that could strengthen the country’s green ambitions.

Overcoming these challenges will not be easy. Canada must devise a comprehensive skills strategy that promotes upskilling and training, not simply for its current pool of workers, but simultaneously for incoming newcomers. A logical first step would be for Immigration, Refugees, and Citizenship Canada (IRCC) to establish a detailed category for green jobs that prioritizes economic migrants.

Unfortunately, there is a barrier to doing this. Canada currently lacks North American Industry Classification System codes for green jobs, making it difficult to orient immigration policy and accurately measure the demand for such employment via national labor market data. This needs to change.

Additionally, newcomers must be supported with the necessary tools and resources for success. This includes offering training programs, mentorship opportunities, and employment services tailored to align with immigrant qualifications. It is unacceptable that an environmental consultant or a sustainability manager from Asia or Latin America has to resort to cash jobs to support their families, due to the absence of transitional programs that promptly recognize and validate their international experiences.

This requires policymakers to do better than simply playing the blame game and pointing fingers at jurisdictional concerns. Long story short: Canada must prioritize the underutilized potential of newcomers to build a stronger, sustainable, and growth-driven future for all.

Aftab Ahmed is a Master of Public Policy candidate with the Max Bell School of Public Policy at McGill University, where he is the editor-in-chief of the policy newsletter The Bell. Aftab is a freelance columnist for the Bangladeshi English-language newspapers, The Daily Star and Dhaka Tribune.