What happened
Canada's economy has shrunk for two straight quarters, and the debate is over why. As reported by Talent Canada, Prime Minister Mark Carney pointed to lower immigration as part of the explanation. Critics argue the opposite: that years of high intake hid how weak the economy was. Economists citing broader indicators say Canada is not in a true recession.
RBC economist Nathan Janzen said large immigration inflows did prop up total GDP and total employment growth. But per-capita GDP was falling and unemployment was rising in a way usually seen only in recessions. He said he sees signs that conditions for individuals are stabilizing, even as the headline numbers look weak.
The population grew 2.4 per cent in 2022, 3.1 per cent in 2023 and 2.21 per cent in 2024, against about 1 per cent before the pandemic. Ottawa is now targeting 380,000 permanent residents this year, plus 230,000 temporary workers and 155,000 students. Statistics Canada recorded flat population growth in 2025, and the first quarter of 2026 looks slightly negative.
An RBC report Janzen co-authored says about 25,500 workers retire each month, double the rate of a decade ago. He expects a smaller workforce and weaker growth, and says youth unemployment, at 14.3 per cent in April, may ease as openings appear.
Why it matters if you are hiring
The labour pool is no longer expanding the way it was from 2022 to 2024. Retirements are running at twice the earlier pace, and fewer newcomers are arriving. Roles that relied on temporary foreign workers or steady immigrant intake, such as production, warehousing, hospitality and entry-level office work, will be the first to feel it.
Weak headline GDP does not mean easy hiring. Employers should expect to compete for experienced people, especially where retirees take knowledge with them. Planning for headcount on the assumption of a growing pool is now risky.
The softer youth labour market is an opening. Younger candidates may be more available, and employers who train well can build the next layer of skilled staff.
One thing to do this week
List every role where someone is likely to retire within 3 years, or where you depend on temporary workers whose permits will expire. For each, name a successor or a pipeline plan, and start one conversation with a younger candidate or internal hire about it.
Traverse Staffing helps Canadian employers fill operations, contract, manufacturing and professional roles with experienced people, including when the pool is tight and knowledge is walking out the door.