Not enough workers ahead

For anyone struggling to find a gig, it’s probably hard to believe, but a labour crunch is looming

IF THE JOB market seems unimaginably bleak and immovable at the moment, you might simply need some patience. A new report from RBC says that while things are very slack in the labour market right now, looming on the horizon is a swing back to the days where labour is scarce, it’s harder (and pricier) to hire good talent and employees are back in the driver’s seat.

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“The unemployment rate remains high following the Bank of Canada’s 2023-24 tightening cycle and disruptions from U.S. tariffs,” the report said. “But under the surface, longer-run structure headwinds against labour supply are building.”

The report isn’t really identifying anything all that new. Demographics are one key factor: more people are retiring, fewer immigrants are coming to the country and the population overall is shrinking. But the population of younger workers is declining too, related to net emigration and lower birth rates; Canada is set to see a decline of around 15,000 young workers per month for the next five years.

This, RBC suggests, will help ease the high level of youth unemployment Canada is currently experiencing. “That’s a good thing for workers. It means pockets of labour market weakness — particularly challenges for younger workers finding first jobs — will ease,” the report stated. “But, for businesses it also means that labour shortages will, eventually, return once the unusually high level of unemployment is absorbed.”

For younger Canadians, the technical analysis comes down to one question: when will it get easier to find a job? Much harder to say. Economists seem to think that while the job market is showing signs of life — see the 88,000 jobs added in May — that a low-hire, low-fire environment remains.

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“Some businesses are looking to hang on to seasoned and more qualified employees for as long as possible — even when business activity is slowing,” said Bank of Canada deputy governor Nicolas Vincent. But there are rumblings that might remind jobseekers of the halcyon days of 2021, when labour shortage was the dominant condition. “Businesses keep telling us it has become harder to find workers with the right skills and experience.”

So, if you’re experiencing the sharp end of 2025’s labour market, the answer might be just to try to hold on a little longer. “The experience of rising unemployment in recent years was somewhat anomalous — labour shortages were a growing persistent issue for businesses over most of the prior decade,” RBC’s Nathan Janzen wrote. “An older population means those labour shortages could return more quickly than otherwise would be the case.” Kieran Delamont