As an economist, I have carried out several economic impact studies: the study of the potential benefits of the Great Whale project for Hydro-Québec, the ex post the fallout from La Grande 1 and 2, that of the James Bay Convention, that of all wind farms installed in Quebec from 1997 to 2020 for CANWEA (Canadian Wind Energy Association), etc. In addition, in 2014, the Société d’habitation du Québec (SHQ) commissioned me to study the economic impact of municipal housing offices.
Overall, these studies demonstrate that on average, depending on the sector of activity, the multiplier coefficient for the creation of indirect (first and second suppliers) and induced jobs throughout Quebec calculated from the creation of Direct jobs can vary between 5 and 10. Thus, for each direct job created, between 5 and 10 indirect and induced jobs will be created.
There is currently a lot of talk about labor shortages in several sectors of economic activity. Can the recruitment of a new employee be assimilated to the creation of a new job as we have just seen above? Not completely, the creation of a new job by setting up a new activity generates indirect jobs not only for production inputs, but also for the manufacturing of the new equipment required. This is not necessarily the case for recruitment aimed at filling a vacant position.
But we can affirm that the lack of labor in a structural and significant way in a company forces it to produce below its real capacity. The arrival of new employees to fill vacant positions will therefore make it possible to increase production, requiring a greater need for raw materials and inputs of all kinds (packaging, transport, etc.). These new employees therefore solicit and mobilize employees in a multitude of other companies. It is a new demand which generates labor needs. Is this multiplier coefficient between 5 and 10 or a little less? At first glance, it is difficult to say, but it exists, without a doubt.
In this multiplier coefficient, there are the induced effects. These are the jobs created when the wages generated by these new jobs (direct and indirect) are spent. This type of effect remains questionable when the workers who occupy these new jobs already lived in Quebec and therefore had a salary (or other forms of income, such as employment insurance). In this case, not all of the induction is attributable to the new jobs.
That said, we realize that if we use immigration to try to fill the labor shortage, we are going in circles while making the situation worse. Each job filled by a new immigrant will require several other jobs to satisfy their activity and daily vital needs (more child care, more health care, more retail stores, more housing). Since these are new people (and even new families) on Quebec soil, the induced effects in terms of jobs created by the purchases of goods and services of these families must be taken into account in full.
Thus, even remaining very cautious, we can easily believe that a multiplier coefficient of 5 (the bottom of the range, therefore) could be retained, each immigrant worker would require the creation of five new jobs, including at least two or three induced manner. It is therefore clear that, as long as we can use labor already on the territory of Quebec (better training of the young workforce, more systematic use of older people, better working conditions in certain sectors, etc.) and especially the automation and robotization of processes, it will be easier to reduce the labor shortage than to resort to immigration.
Promoting increased immigration out of compassion for people in difficulty in other countries or to compensate for our low fertility rate and the aging of our population is one thing, but counting on immigration to reduce the labor shortage is a mistake. Germany’s immigration policy in recent years is enlightening in this matter. After having opened their doors wide to immigration, its leaders find themselves in 2023 with significant labor shortages in key sectors.
We are currently becoming aware of the enormous pressures that increasing immigration thresholds would create on housing. But these pressures would be felt throughout the economic system, and in particular on our already overwhelmed health and education systems.
It is surprising to say the least that politicians do not have a minimum of knowledge about economic analysis instruments. However, economic impact analyzes are very well known (and necessary for almost all projects submitted to the BAPE). They are made possible thanks to a very sophisticated statistical instrument managed and updated by the Institute of Statistics of Quebec, the Interindustrial Table of Quebec, which interrelates all of Quebec’s economic activities.