Appendix A: The importance of immigration to labour force growth

According to the 2006 Census, the immigrant proportion of the Canadian labour force is one to two percentage points above the immigrant proportion of the Canadian population. For example, in 2006, immigrants made up 18.4% of the Canadian population and 19.9% of the Canadian labour force. In 1996, these figures were 17.4% and 19%, respectively.

Between 1996 and 2006, the Canadian labour force grew by 2.3 million participants. Of those immigrants landing in the ten-year period preceding the 2006 Census (recent immigrants), roughly 1.1 million were in the labour market in 2006. Some researchers have suggested that dividing the number of new immigrants entering the labour force during this period by the net labour force change between 1996 and 2006 reveals the contribution of recent immigrants to net labour force growth. For example, 1,126,165 new immigrants in the labour force divided by the overall increase in the labour force of 2,333,435 show that close to half (48%) of net labour force growth during the period was due to immigration. This can be a misleading statement if not taken in context.

Specifically, what about the contribution of Canadian-born new entrants to the labour market over this same time period? In 2006, there were more than 2.4 million young (15-24) Canadian-born participants who also entered the labour market during the same time period. Combining young Canadian-born participants with recent immigrants yields roughly 3.5 million new entrants to the labour market since 1996.^{Footnote 32} Breaking down these two sources of new entrants shows that recent immigrants accounted for less than one-third (32%) of all new entrants over the 1996-2006 period.^{Footnote 33}

Using the same method which gives us the finding that recent immigrants accounted for roughly half of net labour force growth between 1996 and 2006, researchers estimate that sometime between 2011 and 2016 immigrants will account for 100% of net labour force growth. This estimate could be interpreted to mean that young Canadian-born individuals will make no contribution to the labour force – this, of course, is impossible. Recent immigrants will continue to comprise a significant portion (and perhaps an increasing proportion) of new entrants to the labour market. However, it can be expected that young Canadian-born individuals will make up the majority of new entrants in the foreseeable future.

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