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By now, Quebec’s economic turnaround has become the stuff of envy as the rest of Canada watches the once chronically slow-growing province move to the top of the class. While Alberta recalls better days and Ontario muddles along, Quebec keeps surprising everyone.

Statistics Canada’s latest employment numbers for July confirmed once again that Quebec’s job machine is running on all cylinders. Almost 100,000 jobs have been created in the past year in the province and employment is up by 2.3 per cent. Despite a labour force that is two-thirds bigger, Ontario produced 118,000 jobs in the year to July, an increase of 1.6 per cent.

No province matched British Columbia, which produced 94,000 new jobs in the year to July, a heady 3.8-per-cent increase from mid-2018. B.C.’s unemployment rate stands at 4.4 per cent.

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Still, at 4.9 per cent, Quebec’s unemployment rate is not far behind B.C.’s. And with the average hourly wage up 6.2 per cent year-over-year in July, Quebeckers are enjoying a boost in purchasing power not seen in more than two decades. The province is producing well-paying full-time jobs in the manufacturing and construction sectors. Part-time jobs are down.

Scratch beneath the surface of the Quebec job numbers, however, and the picture is far less rosy. The province’s labour force is shrinking everywhere outside the Montreal area and the Coalition Avenir Québec’s (CAQ) government’s move to cut immigration levels will only exacerbate the trend in coming years. And that is making Quebec a less attractive place to invest.

Quebec’s labour shortage has led to “the suspension or postponement of investments, or their realization in other jurisdictions” and a “slow down in sales and economic growth projections,” the Conseil du patronat du Québec (CPQ), the province’s leading employers group, said Tuesday in a submission to a National Assembly committee studying the CAQ’s immigration plan.

“It is the [province’s] demographic decline – particularly the aging of the population and a reduction in the number of births – that explains the labour shortage,” the CPQ added. “Between now and 2030, the number of Quebeckers between the ages of 23 and 67, or the veritable working-age population, will shrink by 140,000. By contrast, the population aged 68 and over will increase by more than 630,000.”

By 2027, the number of annual deaths will surpass the number of annual births in Quebec. And by 2022, the number of seniors in the province will outnumber Quebeckers under 20 years old.

So, there’s no mystery about what the province needs to do to avoid a demographically induced economic decline; it needs to accept more immigrants, and fast.

Yet, that is the opposite of what Premier François Legault’s government is doing. After cutting immigration levels to 40,000 this year, down 20 per cent from 2018, the CAQ intends to progressively raise them back to 52,000 by 2022. And while the proposed increase is a concession to business, which widely decried the CAQ’s original plan, it still falls far short of what the CPQ and most experts agree is necessary to keep the economy from shrinking.

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For decades now, Quebec has accepted proportionally fewer immigrants than the rest of Canada. While Quebec’s share of the Canadian population hovered around 22.7 per cent in 2018, the province took in just 18.3 per cent of the country’s immigrants. Its share of immigration will fall to only 12 per cent this year. Instead of the 40,000 immigrants the CAQ government is admitting, the CPQ estimates the province needs to welcome 75,000 newcomers this year to keep pace with the rest of Canada.

It’s not just the province’s economy that will suffer from the CAQ’s plan, the CPQ warns. As Quebec’s share of the Canadian population continues to decline, it will have less political influence in Ottawa. While Quebec MPs accounted for 27 per cent of the seats in the House of Commons in 1976, their share is now at 23 per cent. And it will continue to fall with each decennial redistribution, even if the province is guaranteed a minimum of 75 seats under the 1985 federal Representation Act.

The CAQ government has justified its plans by arguing that recent immigrants to Quebec tend to stay unemployed longer than in the rest of Canada. The government says it needs to be more selective in choosing immigrants who are ready to fill current job openings.

The CPQ counters that the gap in unemployment levels between new immigrants and the provincial average has shrunk considerably in the past few years to almost zero.

“As the unemployment level among immigrants is declining rapidly, Quebec has the capacity to welcome far more than 40,000 or even 50,000 immigrants,” the CPQ concludes. “Employers are ready and willing to hire more immigrants because the growth, if not survival, of their businesses depends on it.”

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