The Great Pivot: navigating Canada’s new era of stagnant growth and AI integration

In a recent address to the Empire Club of Canada, Bank of Canada Governor Tiff Macklem outlined a vision of a Canadian economy at a critical crossroads, facing a multi-year period of structural restructuring. The governor identified a trio of disruptive forces—shifts in trade policy, slowing population growth, and the rise of artificial intelligence—that are expected to constrain economic growth and reshape the national labour market in the coming years.

For the staffing and recruitment industry, the governor’s forecast suggests a market defined by stagnation in the available workforce. Macklem indicated that the Canadian labour force is expected to hardly grow at all over the next few years, a result of both a declining fertility rate and more restrictive immigration policies. This demographic shift implies that the talent scarcity observed in recent years may become a permanent structural feature rather than a temporary cyclical issue. Recruiters will likely find that the pool of new entrants into the market is severely limited, placing a premium on retention and the more efficient allocation of existing human capital.