The unemployment rate, at 5%, remains near a record low, and employment growth in recent months has been stronger than expected. But labour supply has also been growing faster than anticipated as more women and immigrants join the workforce. Increases in child care subsidies and more flexible work arrangements are improving the labour force participation of women, particularly mothers with young children.
More people coming to Canada are also augmenting the labour force. The Canadian population hit 39.6 million in January, after a record gain of one million newcomers in 2022. These newcomers include permanent residents, temporary foreign workers and international students. They are adding to demand in the economy, and many are new workers increasing labour supply.