What newcomers can expect in Canada’s evolving economy
Credit to Author: Chitra K. Menon| Date: Wed, 29 Jan 2025 20:08:29 +0000
Teecee Okore
As Canada enters 2025, the economy presents both opportunities and hurdles for immigrants, who are essential to its workforce yet often encounter barriers that make the path to success complex. Take Teecee Okore for instance. A seasoned marketing consultant from Nigeria, she moved to Canada in 2024 with high hopes of upskilling, expanding her network and potentially starting her own business. However, like many newcomers, Okore has encountered obstacles “I feel the policies designed for immigrants don’t provide much initial support.” Yet, she remains optimistic, having enrolled in a financial management program at the International Business University in Toronto, which she believes is helping her adapt to Canadian business practices. “The course is opening new doors for me,” she shares.
Economic landscape and key sectors for growth
Across the country, newcomers with exceptional skills face challenges similar to Okore’s as they try to establish themselves in Canada’s evolving economy. Skilled immigrants continue to contend with higher living costs, housing shortages, regional economic disparities and stiff job market competition. Gervan Fearon, economist and George Brown College president, emphasizes that while immigration continues to be a critical driver of Canada’s economic success, navigating this complex landscape requires a strategic, proactive approach. “Canada’s economic growth trajectory in 2025 is positive,” says Fearon. “It is expected to grow at a pace of roughly 1.5 per cent in 2025 as it continues to recover from the shadows of the pandemic.” Fearon’s insights align with BMO Capital Markets’ 2025 Economic Outlook, which says Canada will experience “stable but uneven” growth, with projected GDP growth between 1.5 per cent and 2 per cent annually.
Gervan Fearon
While the interest rates cut by the Bank of Canada are expected to ease financial pressures for consumers, challenges like inflation, high living costs, and job competition will continue to pose hurdles. On a positive note, the federal government’s plan to cut permanent resident targets by 20 per cent in 2025 is expected to ease the housing affordability crisis and address population growth, thereby boosting the economy. Inflation is forecasted to average below two per cent for 2025, with further declines possible if oil prices drop. Still, a range of obstacles could challenge growth in the year ahead, says Fearon.
The biggest issues are trade uncertainty and workforce concerns, all shaped by U.S. President Donald Trump’s administration. “Trump has discussed plans to impose tariffs on Canadian goods and strengthen border controls. History shows that tariffs often lead to retaliation and trade wars, which hurt all sides economically. There are also concerns about U.S. tax policies and government spending, which could affect the global economy, including exchange and interest rates.” However, the Canadian economy will remain focused on its competitive service sector, including financial services, and will benefit from productivity improvements in agri-food, manufacturing, and resources, says Fearon. “Technology, healthcare and green energy are emerging as areas of growth. Our tech industry is leading in fields like artificial intelligence and quantum computing, which could boost productivity and economic progress. To support this, the government and businesses are using strategies like tax credits, investment plans and policies to encourage innovation and attract private investment,” he adds.
Usha Srinivasan
Usha Srinivasan, a market researcher, supports Fearon’s observations. She highlights that while Canada’s tech industry is booming in major cities like Toronto, Vancouver and Montreal, provinces like Alberta and Saskatchewan offer untapped opportunities for skilled newcomers in sectors such as energy, technology and agriculture. “Smaller cities like Waterloo and Calgary are emerging as affordable alternatives with growing tech industries. Alberta is also leading in green energy initiatives, driving demand for specialists in wind and solar technologies. But while healthcare is expanding due to the aging population, regulatory barriers prevent skilled immigrants such as nurses and doctors from addressing critical shortages.”
Challenges ahead: Wage growth, affordability and employment competition
Srinivasan predicts that the wage growth in 2025 will be moderate and is unlikely to match rising living costs. The housing affordability crisis will remain one of the most pressing issues in 2025, particularly in urban centres like Toronto, Vancouver and Montreal. Statistics Canada reports show that nearly 45 per cent of Canadians are concerned about housing affordability because of the rising costs. In cities like Toronto, the average housing cost has surpassed $1 million, making homeownership unattainable for many, especially newcomers starting their careers.
Manoj Karatha, a broker in Mississauga, Ontario, doesn’t anticipate significant changes in the housing market anytime soon. While the interest rate cuts by the Bank of Canada may lower monthly mortgage payments, housing prices and property values are unlikely to decrease. Karatha predicts that the government’s recent immigration cuts will have a significant impact on the rental market. “The current housing crisis is largely due to overpopulation. Once the immigrant population stabilizes, rents are likely to drop, making housing slightly more affordable,” he explains.
Manoj Karatha
As a potential solution, Karatha suggests that immigrants should consider moving to other provinces such as Manitoba or Alberta, where housing is relatively affordable. However, he notes that this comes with trade-offs, such as compromising on luxury, lifestyle standards, and, for some, the dream of living in major cities like Toronto or Vancouver. In addition to the housing crisis, employment competition in major cities will remain a significant barrier. Although Canada’s unemployment rate is expected to remain relatively low in 2025, the demand for highly skilled roles, particularly in technology and healthcare, will outpace the available workforce. Newcomers with specialized skills may face challenges securing employment without well[1]established networks and a comprehensive understanding of the labour market. Usha George, a professor of social work at Toronto Metropolitan University (TMU), says that based on research conducted by TMU in 2021, it took newcomers six to seven years to catch up with the Canadian population in terms of employment and education. “The National Occupational Classification lists many in-demand jobs, but these roles are often inaccessible to newcomers. Governments must better understand the unique needs of newcomers and should create more supportive conditions,” she says.
How newcomers can thrive
While navigating higher living costs, housing shortages and job competition will require resilience, the growing demand for talent in key industries offers hope for those willing to adapt and thrive. George suggests leveraging regional opportunities, adapting to local market demands, upskilling and reskilling, and most importantly, networking as key measures of success. “Networking is social capital. Newcomers should actively engage in industry events, mentorship programs and online platforms like LinkedIn to connect with potential employers and colleagues. This will help them to explore regional job markets in provinces where there is a growing demand for skilled workers,” she advises.
Usha George
George stresses the need to stay updated in rapidly changing sectors by committing to lifelong learning. “Canadian universities offer a smorgasbord of certifications and bridging programs. By understanding local practices, culture and industry-specific requirements newcomers can navigate the competitive job market and build rewarding careers in Canada’s diverse economy,” she adds.
Okore also emphasizes the importance of learning. “My course has been instrumental in helping me understand market dynamics and connect with professionals from various countries thanks to its multicultural environment. It also provides insights into how businesses operate in Canada. Meeting people from diverse backgrounds who bring knowledge of different industries has been incredibly valuable,” she explains.
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