January 22nd, 2025 | Sterling

The Future of Work in Canada: 2025 Employment Trends to Watch

The year 2024 was transformative for Canada’s hiring and background check industries. The surge in popularity of new technologies, particularly AI and automation, reshaped many HR processes, including hiring, onboarding and workforce management. Amidst a high unemployment rate and concerns about the rising cost of living, the current administration reduced its immigration targets, significantly impacting the job market.  Meanwhile, employers remain vigilant about identity theft and employee fraud, especially since technological advancements have made fake identities more convincing than ever.

As we move into 2025, let’s explore the key topics and pressing concerns in Canada’s HR and background check industries.

International Checks

In October 2024, the Minister of Immigration, Refugees and Citizenship Canada (IRCC) announced Canada’s new immigration plan. This plan aims to reduce the number of temporary residents to 5% of Canada’s population by the end of 2026, and set a target of 365,000 permanent residents for 2027, down from 500,000 the previous year. The plan’s purpose is to address housing shortages and the rising unemployment rate, especially among young people.

Despite the anticipated reduction, the international workforce will remain vital, especially in key sectors like health care, construction, and transportation. These sectors will continue to benefit from the diverse skills and perspectives of international employees, further driving growth and innovation. Additionally, the IRCC’s tightening of work permit requirements for postgraduate students is expected to result in many students losing their work permits. To help employers remain compliant with employment regulations, confirm their employees are legally entitled to work in Canada and ensure their screening practices are consistent, right to work checks and international criminal record checks remain a key component of a thorough screening program.

AI and Automation

Once experimental new technologies widely regarded with skepticism, AI and automation are here to stay. According to a recent study conducted by Gartner, 38% of HR leaders have explored or implemented AI solutions to improve process efficiency within their organization. AI and automation have many benefits for hiring managers, including:

  • Reducing repetitive manual tasks, allowing hiring managers to focus on their core responsibilities
  • Collecting, tracking, and analyzing large amounts of data
  • Increasing the efficiency of hiring, onboarding, and employee management processes

When implemented effectively, AI and automation can enhance the employee experience by freeing up HR professionals’ time. This allows them to concentrate on adding a personal touch to the hiring and onboarding process. When it comes to background checks, choose a third-party provider with an extensive global network of integration partners, who leverage advanced AI capabilities to optimize, accelerate, and enhance their identity and background check services, while maintaining compliance with regulatory obligations worldwide.

Fraud Prevention

While new technologies empower both employers and candidates, they also enable fraudsters to scale up their activities and create more convincing fakes. In a recent case in Toronto, a fraud ring generated over 680 synthetic identities. While the false identities in this case were used to commit banking and credit fraud, fraudsters can also exploit them for employment purposes.

For instance, an unscrupulous applicant might use fake nursing credentials to apply for a job for which they are not qualified, or to use a false name to hide their criminal convictions. Advanced technologies help fraudsters create documents that appear authentic and are difficult to detect without thorough scrutiny. For this reason, thorough identity verification is a crucial part of any employment background check program.

In addition, some candidates try to stand out in a crowded job market by fabricating non-existent employers, sometimes assisted by fraudulent employment services. Traditionally, employment verification has followed a standard approach, where candidates provide details about their employment history (such as where and when they worked and their standing). Employers then verify this information either directly or through a third-party background check provider by contacting previous employers for confirmation. However, we have recently observed some discrepancies, with candidates sometimes providing employers whose legitimacy is in doubt.

To combat these sophisticated fraud techniques, it’s essential for employers to implement advanced verification methods. These methods include:

By leveraging these advanced techniques, employers can ensure a thorough and accurate assessment of a candidate’s background, thus helping to reduce the risk of fraud and enhancing workplace safety.

Rescreening

Employers have to manage many risks in the workplace, not all of which come from new employees. Fraud by existing employees and contractors remains a serious concern. In a recent high-profile case, suspected employee fraud may have cost the federal government at least $5 million, prompting an ongoing RCMP investigation. Employers might believe that background screening is a one-time process, but many things can change in an employee’s life after they are hired. Implementing a rescreening program is one of the most effective ways for employers to protect themselves against the costly consequences of employee fraud.

This raises the question: which checks should employers include in their rescreening program?

The answer varies from one industry to another, but criminal record checks are generally a core component, as they can reveal new criminal convictions that employees may have incurred since their initial hire. A credit bureau inquiry  is advisable for employees with financial responsibilities or managerial oversight. In regulated industries, such as transportation and healthcare, specialized checks such as driver abstract searches and credential verifications may be required to ensure employees are still qualified to hold their position.

Compliance

Ahead of the 2025 federal elections, Canada is looking at modernizing its legal privacy framework with Bill C-27, which is currently under review in the House of Commons. Bill C-27 aims to update Canada’s privacy regulations to align more closely with the EU’s GDPR. In addition, on July 1st, 2025, Ontario’s Digital Platform Workers’ Rights Act will come into full force. The Act sets forth new regulations regarding gig workers, similar to those governing traditional employment and include provisions regarding wages, termination, and workers’ rights. Canada’s legal landscape is always evolving, and employers may wonder whether they are impacted by specific laws and what steps they may need to take to remain compliant.

For specific legal and compliance advice, always consult your dedicated legal counsel. However, private background screening companies, like Sterling Backcheck, continuously monitor the legal and compliance landscape to help you stay informed about the latest regulatory changes affecting the hiring and background check industry. To ensure you never miss an important update, sign up for our quarterly newsletter.

As we enter 2025, employers can continue to rely on our expert guidance and industry updates to help navigate the complexities of the Canadian job market. To learn more about setting up a background screening program that will help you face the future with confidence, contact us today.

1 Sterling Backcheck in-house data 2024

This content is offered for informational purposes only. First Advantage is not a law firm, and this content does not, and is not intended to, constitute legal advice. Information in this may not constitute the most up-to-date legal or other information.

Readers of this content should contact their attorney or lawyer to obtain advice concerning any particular legal matter. No reader, or user of this content, should act or refrain from acting on the basis of information in this content without first seeking legal advice from counsel or lawyers in the relevant jurisdiction. Only your individual attorney or legal advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this content does not create an attorney-client relationship between the reader, or user of this presentation and First Advantage.

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