OTTAWA, Jan 25, Reuters - More women have joined the Canadian workforce recently, helping offset labor shortages, and one reason could be Prime Minister Justin Trudeau's government's plan to cut child care costs, the Bank of Canada said on Wednesday.
The labor force's annual growth has shrunk to 0.9% over the 2020 -- 2022 period from 1.4% in 2017 -- 2019 because of an aging population and the interruption of immigration flows in 2020, according to the central bank.
The participation rate for prime-age Canadians, particularly women, has increased as well as the effect of aging, it said, noting that the participation rate for prime-age women is near record high 84.9%, and the increase had been notable for women with young children.
The federal Liberal government introduced a multi-billion dollar program last year to cut the costs of child care and encourage more women to work, and it may be in part due to the multi-billion dollar program it introduced last year.
The increase in the participation of prime-age women has helped increase the labor force by nearly 100,000, helping firms' labor shortages and hiring challenges, the bank said in its quarterly Monetary Policy Report.
Immigration is another factor that helps mitigate the effects of a tight labor market. Between December 2020 and December 2022, about 480,000 new employees joined the labor force.
There is an imbalance between labor supply and demand that can only be overcome by increased immigration, citing the increase in labor supply and the number of consumers.