By Julie Gordon

OTTAWA, (Reuters) – Canadian workers have become a hot commodity in a tight labor market. Companies are being forced to increase wages to fill vacant jobs – as well as retain current staff – a fact that could complicate efforts by the Bank of Canada to control inflation.

Although wages are not yet showing up in official statistics, there is still a lot of interest from employers to hire. Staffing companies claim it’s a seller market for both skilled and unskilled workers across all industries.

Economists warn that wage growth could become a major problem for Bank of Canada. This is despite the fact that inflation is at an all-time high of almost two decades. On Wednesday the central bank surprised the market https://www.reuters.com/world/americas/bank-canada-signals-it-could-hike-rates-sooner-than-expected-2021-10-27 with its hawkish tone, nudging forward the chance of an interest rate hike as it warned inflation would go higher.

Tanya Cerniuk is the head of Canada’s sales at global staffing agency Global Staffing. She stated, “I see increases in labor wages anywhere from 10%-40%.” Adecco (SIX.) Group.

One was offering C$14 ($11.35/hour) and they now offer C$19.50/hour,” she stated. The world is changing rapidly. Employers must be flexible.

Riley Haas is a digital market professional. She started searching for a job in August. Within weeks she signed with an internet marketing agency. In addition to earning 30% more, there were benefits.

Haas said, “I was stunned by the variety of opportunities that existed as well the high remuneration offered.” “This was the best job-hunting experience I’ve ever had in my entire life.”

Statistics Canada reports that while Canada’s employment levels have returned to pre-pandemic levels in September, the wage growth in the country was 1.7% higher than the 4.3% recorded in February 2020 right before the outbreak of the pandemic.

Tiff Macklem, Bank of Canada Governor, stated Wednesday that “if you look at all the wage measures they are still somewhat below pre-pandemic levels.”

He said that the central bank was closely monitoring signs of inflation in wage wages as the headline Consumer Price Index will now be higher than the 1%-3% range up to late 2022.

More money, more workers

Some businesses are hesitant about increasing base wages in the face of ongoing uncertainty from pandemics, so they offer rich signing bonuses or hourly premiums that depend on attendance and retention. These may not be considered wage increases.

The loosening of COVID-19 regulations has led to an earlier start to seasonal employment for holidays. This pitted retailers and restaurants against manufacturers to hire workers and warehousing companies to store them. This has contributed to the shortage.

Cerniuk stated, “I believe it’s the perfect storm.”

The giant billboard in front of an Ottawa liquor shop offers seasonal employment starting around 15% higher than the provincial minimum wage (C$14.35 per hour in Ontario). A sign in the nearby Whole Foods stores promises employees a C$2-C$3 hour bonus, plus more overtime, if they remain on-site for the holiday season.

Derek Holt of Scotiabank is head, capital market economists. He pointed to annualized and seasonally adjusted data that shows a three-month sharp acceleration in wages growth. This makes it hard for anyone to ignore.

He stated that wage growth in Canada is on the rise and added that this is the latest concern for the central bank.

Meloche Group is a Montreal-based aerospace parts manufacturer. It has increased worker wages this month, and plans to increase its wage in February. Hugue Meloche (Chief Executive Officer) stated that there are currently 30 jobs available in the company, which is 10% of its total workforce. The shortage makes it more difficult for deliveries to be completed on time.

He said that he was expecting a lot more growth while speaking to Reuters at the Aero Montreal global supply chain summit. “We must prepare.”