By Chloe Bray

At the Institute for Canadian Citizenship (ICC) we champion immigration that mutually benefits newcomers and Canada. Effective immigration streams are critical to addressing Canada’s economic and labour challenges, supporting both immigrant integration and national prosperity. But the deteriorating Canada-US relationship casts a long shadow over our current approach to immigration and economic growth. Canada is failing to deliver for newcomers, and for its future prosperity. As Canada faces US tariffs, business and policy leaders need to embrace immigrant talent to help tackle these challenges. 

Throughout 2024, as housing, infrastructure and construction labour shortages made headlines daily, Canada admitted only 35 permanent residents (PRs) through its Federal Skilled Trades program. This program encompasses workers categorized as technical trades and transportation; general trades; natural resources and related production; and processing, manufacturing, and utilities. Over the same period, roughly 23,000 temporary foreign workers (TFWs) in the same categories were admitted under the temporary foreign worker program. This uneven distribution of tradespeople across temporary and permanent immigration streams suggests that Canada is not taking the long view on its current challenges. 

Throughout 2024, as housing, infrastructure and construction labour shortages made headlines daily, Canada admitted only 35 permanent residents (PRs) through its Federal Skilled Trades program.

Business leaders also need to step up to better integrate newcomers already in Canada into the labour force. Although Canada’s immigration policies claim to work towards addressing talent shortages in critical sectors, the 2024 Talent to Win report from the ICC and Deloitte demonstrates that immigrant talent remains “vastly underutilized”. Labour shortages “reduced Canada’s GDP potential by $54 billion in 2022.” Several key factors contribute to the underuse of immigrant talent, including poor onboarding, training, and mentoring; DEI gaps; difficulty translating experience and skills; and administration and regulatory compliance. 

RBC indicates that Canada is short 64,000 workers in construction alone, and by 2033, roughly 800,000 workers will retire from the manufacturing, utilities, business, finance and administration, and trades and transportation industries. Demand for labour in these sectors is only going to increase. No matter how you slice the 2024 immigrant admissions data, Canada appears to be falling well short of its current and future needs. 

The first months of 2025 have brought additional challenges. Confronting President Trump’s tariff threats and economic aggression demands an increase in Canadian domestic production. Labour shortages in these critical sectors – or the inability to better integrate the talent that’s already here – will threaten our ability to do so. 

President Trump’s tariffs have united government officials, business leaders, and everyday Canadians against a common threat. Former Prime Minister Justin Trudeau has “urged Canadians to rally around the flag and make patriotic choices when buying goods and deciding where to vacation,” while CEOs “are calling for Canada to start building more of its own resource infrastructure to wean itself off the U.S.” This patriotism extends to consumers: Canadians are willing to pay more, drive further, and wait longer for Canadian products. This increased unity and demand for made-in-Canada solutions offers a unique opportunity for the country to strengthen its shields against future economic threats as relations with the United States remain rocky. But without the labour to drive domestic production, how can Canada effectively build its defenses against these threats? 

The natural resource and energy sectors are especially vulnerable to the tariffs. Industry leaders in Canada’s resource sector are assessing the potential impact of the tariffs and exploring options to reduce their reliance on the United States. Business leaders are discussing the possibility of building more mines and pipelines to increase resource production in Canada and shipping it outside the US. In Quebec, there are plans for a significant expansion to Hydro-Québec, including thousands of new wind turbines, 5,000 km of transmission lines, and multi-billion-dollar yearly investments. All these expansion initiatives will require major injections of labour. The Hydro-Québec project alone is estimated to require 55,000 workers by 2033, and “it’s not clear where that staff will come from.” 

The ICC recognizes the immense and often unharnessed potential of newcomers to help solve this problem. Immigrants already contribute to filling critical labour shortages in other sectors. Canada’s healthcare sector is poised to see over 400,000 workers retire in the next 10 years, with existing recruitment challenges making it difficult to fill those roles. Highly skilled immigrants are helping to address this shortage: in 2021, immigrants accounted for 1 in 4 healthcare workers in Canada – and the proportion has likely increased over time. In certain areas, like dental technology, immigrants make up more than 60% of workers. Just as immigrants have filled essential positions in the healthcare system, so too can they support increased domestic production to shield Canada from the threat of American tariffs. But only if Canadians will let them. Immigrants remain overqualified and underemployed, unable to contribute effectively to the Canadian economy. This is especially true for immigrants with degrees in trades, who “face higher overqualification risks than those with STEM qualifications.” 

Immigration is a strategic tool that can be used to address urgent labour shortages in industries poised to see increased demand. By making better use of skilled immigrants already here and welcoming new talent equipped to strengthen domestic production capacity, business and policy leaders could transform this economic challenge into an opportunity for sustainable growth while reducing Canada’s dependency on our increasingly unpredictable neighbour to the South.  

At the ICC, we know that future Canadians are Canada’s future. But Canadian employers and policy makers need to find ways to source and integrate talent that continues to sit on the sidelines – at significant cost to our global competitiveness and our future prosperity. In addition to making better use of immigrant talent already in the country, Canada’s immigration policies should be better tailored to encourage and accept the skilled tradespeople needed to work in critical industries. As the economic impacts of Trump’s policies begin to hit Canadian consumers, the need for domestic production and diversification away from the US will only intensify. This is the perfect moment for Canadian business and policy leaders to address the factors preventing immigrants from contributing their full potential and to ensure our immigration policies are prioritizing labour market integration as a key outcome. The country’s housing, infrastructure, healthcare and productivity challenges cannot be solved until we do. 

Keywords: immigration, skilled trades, Canadian labour market, temporary foreign workers, domestic production, labour shortages, economic growth, U.S.-Canada relations, tariffs, Canadian economy, newcomers, Canadian workforce, natural resources