Labour Shortage in Atlantic Canada Deepens Amidst Federal Immigration Cuts

Canada’s Atlantic provinces are bracing for a critical workforce shortage as federal immigration cuts begin to impact the region. 

Business owners, policymakers, and economists across the Atlantic provinces — Prince Edward Island, Nova Scotia, New Brunswick, and Newfoundland and Labrador — are concerned that these changes will exacerbate the existing labour gap and hinder economic growth. 

With an aging population, a retiring workforce, and lower-than-average retention rates for immigrants, Atlantic Canada urgently needs skilled workers. Despite the region’s efforts to attract more immigrants over the past decade, the projected reduction in immigration threatens to reverse progress and put the economy under strain.

The Strain on Business

According to the Financial Post, Steve Jamieson, an electrical contractor in Prince Edward Island, is dealing with the labour crisis facing many Atlantic Canadian business owners. Jamieson is short five electricians and is often forced to turn down work, increasing costs for his company and clients. In his search for skilled workers, Jamieson extended his recruitment efforts internationally, successfully hiring three electricians from the United Kingdom. However, due to lengthy immigration processes, they have yet to arrive, even though recruitment efforts began six months ago. The delay has stalled his business growth, underscoring the need for a more streamlined immigration process that can respond quickly to labour demands.

Jamieson’s frustration reflects a common sentiment among Atlantic business leaders. Sam Sanderson, general manager of the Construction Association of Prince Edward Island, said the region is short an estimated 6,000 to 7,000 skilled workers. As a result, many contractors cannot bid on new projects, further stalling growth across the region.

A Shrinking Labour Pool

Atlantic Canada has long grappled with an aging population and low birth rates, making immigration a crucial element in sustaining its workforce. The construction industry is heavily impacted by the retirement of skilled workers. With fewer people entering the trades, the region’s capacity to meet growing demands—especially in construction and infrastructure—has dwindled. This is particularly concerning as the federal government targets constructing 3.87 million new homes by 2031. Without sufficient workers to carry out these ambitious plans, Atlantic Canada faces a potentially severe housing shortage that could negatively impact its economic future.

The reduction in immigration levels further compounds this issue. The federal government has announced cuts to Canada’s immigration targets, with 395,000 permanent residents planned for 2025, down from 485,000 in 2024. This trend is expected to continue, with just 380,000 immigrants projected for 2026 and 365,000 for 2027. Business leaders in Atlantic Canada are concerned that these cuts could impede the region’s economic growth, which has increasingly relied on immigration to replenish its workforce.

The Immigration Challenge

Atlantic Canada has made strides in attracting and retaining immigrants to mitigate the effects of an aging workforce. In 2023, the Atlantic provinces welcomed a record 32,000 immigrants, up from just 5,800 in 2013. This increase resulted from dedicated recruitment efforts and the implementation of the Atlantic Immigration Pilot Program (AIPP) in 2017, later replaced by the permanent Atlantic Immigration Program in 2022. These programs addressed regional labour shortages by encouraging skilled workers and their families to settle in Atlantic Canada.

Yet, retention remains a challenge. According to the Atlantic Economic Council’s recent Immigration Tracker, only 57 percent of immigrants who arrived in Atlantic Canada in 2017 were still in the region five years later. Low retention rates reflect various integration challenges, including limited access to affordable housing, healthcare, and childcare. Additionally, immigrant income levels, though improving, still lag those of non-immigrants. Addressing these barriers is essential for Atlantic Canada to build a sustainable workforce supporting regional industries.

Recruiting Skilled Workers Overseas

In response to labour shortages, construction associations across the Atlantic region have ramped up overseas recruitment efforts. This includes targeted recruitment in countries like the United Kingdom, Ireland, and Mexico. Nearly 900 skilled workers have expressed interest in relocating to Atlantic Canada, but the immigration process often takes up to two years, delaying workforce reinforcements.

Sam Sanderson of the Construction Association of Prince Edward Island said immigration policies must be adapted to meet the unique needs of Atlantic Canada. He emphasizes that for the construction industry to thrive, skilled labour must be prioritized in immigration pathways. “Money alone won’t solve this problem. It’s about people—qualified people who can help us build Canada,” he told the Financial Post.

Broad Economic Implications

Labour shortages extend beyond the construction industry. Ather Akbari, an economics professor at Saint Mary’s University in Halifax, notes that sectors ranging from healthcare to technology also feel the effects. Without adequate staffing, Atlantic Canada risks overloading its healthcare system and stifling innovation, making it difficult for local economies to thrive.

Furthermore, the Atlantic provinces, notably Newfoundland and Labrador, are especially vulnerable to labour shortages. With the oldest population in the country, Newfoundland and Labrador’s workforce is rapidly declining, making immigration cuts especially concerning. Wanda Cuff-Young, vice president of Work Global Canada Inc., argues that the province cannot afford any reductions in immigration quotas if it hopes to maintain economic stability.

Targeted Immigration Policy

Atlantic Canada’s challenges underscore the importance of a tailored immigration policy considering regional needs. Atlantic Canada’s demographic reality means its economic survival is intertwined with its ability to attract and retain skilled immigrants. For this reason, business leaders and policymakers are calling for a nuanced national immigration strategy that accounts for the labour demands of specific regions.

With Atlantic Canada’s growing reliance on immigration to address its workforce challenges, the region must prioritize strategies to improve immigrant retention. This approach includes providing adequate support systems such as affordable housing, healthcare, and education. The Atlantic provinces have demonstrated success in short-term retention through programs like the AIPP, which could serve as a model for addressing integration barriers nationwide.

As Canada prepares to adjust its immigration targets in the coming years, the voices of Atlantic Canada’s business community and economists highlight a critical need for action. To avoid economic stagnation, the federal government must work with the provinces to ensure that immigration policy supports Atlantic Canada’s growth to ensure the region thrives.

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