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There’s a strong case to be made for doing something about unemployment, because the usual market mechanism for absorbing a labour surplus — a wage reduction — isn’t available. However, there doesn’t seem to be an analogous argument for labour shortages: higher wages should (eventually) solve labour shortages.

Offering workers higher pay in order to address a labour shortage is a strategy that appears to have largely escaped the attention of employers in Quebec. Wages in Quebec have always been lower than the Canadian average, and the labour “shortage” doesn’t seem to have changed things much. To be sure, the wage gap has narrowed, but only slightly. Ten years ago, median and average weekly earnings in Quebec were just under 90 per cent of those in Ontario; now, a typical Quebec worker earns just over 90 per cent of her Ontario counterpart.

Employers have not offered higher pay to address the labour shortage

Not only are Quebec wages too low to attract workers from other provinces, they appear to be too low to even retain the ones that are already here. There have been some important changes in patterns of interprovincial migration in recent years — more people are now leaving Alberta than are moving there — but Quebec continues to lose working-age people to other provinces.

Of course, Quebec is still a high-wage economy by global standards: what about immigration from outside Canada? It’s not clear that expanded immigration is much of a solution to Quebec’s labour shortage: the immigrants who are already here have more difficulty finding work than they do in other provinces. For example, unemployment rates for the Canadian-born labour force in Quebec and in Ontario are virtually identical: 4.7 and 4.6 per cent, respectively. But the unemployment rate for immigrants in Quebec is 8.7 per cent, as opposed to 5.9 per cent in Ontario. And for immigrants who landed in the last five years, the unemployment rate is 13 per cent in Quebec and 9.4 per cent in Ontario. Everyone in Quebec talks about making it easier for immigrants to have their credentials recognized here and about the importance of integrating newcomers into the labour force, but nothing ever seems to happen.