Canada won’t grow without immigrants
Countries worldwide have long envied Canada’s ability to attract and integrate immigrants. Yet just as our aging demography is beginning to bite, we risk losing the longstanding public consensus that immigration is good for Canada.
To boot, our GDP per capita is declining at a faster rate than that of many other advanced countries. Productivity is abysmal and Canadians are looking for solutions.
Though Canadian support for continued growth in immigration numbers is dropping, the need for new immigrants to address our demography can’t be wished away.
With more Canadians leaving the workforce than entering it each year and our total fertility rate dropping to a historic low of 1.33 in 2023, immigration is the only way to maintain the living standards and levels of services we have come to expect.
If we were to freeze Canada’s population, we would go from around 30 people over 65 per 100 workingage Canadians to over 60 per 100 in the year 2071 — an unfathomable increase in very much loved, but costly, dependants supported by each working Canadian. We must address our demography at the same time as we improve our living standards.
As Carolyn Rogers at the Bank of Canada has cried out, productivity growth is key, where our lagging measures predate current increased immigration levels by a few decades.
Some lay blame on newcomers for decreasing businesses’ willingness to invest in equipment and technology. Why invest when you can just hire another person? This is shortsighted because to overcome demography we need both more workers and more capital investment. It would be foolish to put the country into population decline.
Immigrants can help solve the productivity problem over time. A recent Statistics Canada study showed that so-called “two-step” immigrants, who gain education or experience in Canada before becoming permanent residents, broadly earn more (reflecting higher productivity) than permanent residents without Canadian education or experience. Many of our most successful entrepreneurs are immigrants, too, for example Tobias Lütke of Shopify.
Immigration is not on its own an economic silver bullet for every problem, but Canada cannot grow without newcomers’ skills and ambition. We should all welcome a renewed dialogue about our national economic, social, and humanitarian goals, since the case for improving our immigration system is strong.
The time is now to ensure the selection of immigrants selected for the economic impact are aligned with labour market needs. In its recent strategic review, Immigration, Refugees, and Citizenship Canada committed to hiring a chief talent officer. We are ready to support this work through our connections to employers from coast to coast.
Immigration is of course an interconnected issue, not just an economic one. Newcomers alleviate workforce and demographic pressures but also create their own demand for housing, health care and transportation. Concentrated in major cities, this demand can expand on the other factors driving the housing crisis — the foundations of which we laid long ago.
The recent cap on international students shows that the government is taking the issue seriously and increasingly considering the multiple factors that lead to success, like housing availability and “wraparound” support for newcomers. This is good. Prospective immigrants must be able to see a complete future here, not just a job. If they do not, more will leave for better opportunities.
Our system has been the envy of the world, but as other countries compete to attract the best, we should update our policy-making to incorporate data from across the economy, with tailored thinking that nimbly responds to labour market demand.
It is vital that Canadians see immigration as part of our future and keep supporting it. Approval is still high, but that will only continue with successful outcomes. To achieve these, it is time to adjust course, adopt more data-driven decision making, and throw off the institutional shackles that resist change within our system.