Canada is currently experiencing persistent labour shortages and higher unemployment simultaneously. This raises a key question: Why are jobs going unfilled when people are available to work?
In economics, unemployment is often classified as either structural or cyclical. Structural unemployment arises from skill mismatches caused by long-term changes in technology, demographics, globalization, or industry composition. Cyclical unemployment occurs due to fluctuations in the business cycle — during economic booms unemployment falls, and during downturns it rises.
Canada’s labour shortage is largely structural issue, rooted in demographics and sectoral imbalances (especially in healthcare and construction). The high unemployment rate is more cyclical, reflecting slower economic growth and technological change. This article examines the economic drivers of this paradox and its implications for growth in Canada which are important and relevant insights for Hong Kong foreign workers and employers in Canada.
