Bank of Canada Flags Low‑Hire, Low‑Fire Labour Market
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- Bank of Canada warns that Canada’s labour market has become “low‑hire, low‑fire,” a structural shift that makes it harder to use interest‑rate policy to address unemployment.
- Nicolas Vincent told a Montreal think‑tank that unemployment has risen from 5 % (end‑2022) to 7.1 % (fall‑2023) while layoffs stay low, indicating hiring inertia.
- Higher interest rates since late 2022 and volatile U.S. trade policy have forced Canadian employers to scale back hiring, according to the bank’s analysis.
- Older workers (55‑64) have seen their employment rate climb by about one percentage point since Dec 2022, as firms hold onto experienced staff amid an aging workforce.
- Tim Hortons plans to cut its use of the Temporary Foreign Worker program and hire 10,000 workers locally.
Why it matters: Canadian workers gain from Tim Hortons’ 10,000 local hires, while the Bank’s warning suggests rates will stay higher longer, tightening borrowing costs for businesses and potentially pressuring profit margins.
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