Canada appears to be very open to immigrants, with a staggering 1.45 million individuals anticipated to come to the country between 2023 and 2025. This situation has prompted numerous Canadians to question the ideal amount of immigration for Canada.
The Ideal Immigration Rate for Canada: A Look at the Numbers
The Desjardins study delves into this matter by taking into account Canada’s demographic and economic objectives, which rely heavily on immigration, and the ability of public services and federal support systems to handle the influx of new arrivals.
The Economic Aspect
One of the main objectives of Canada’s immigration policy is to tackle labor shortages that cannot be filled by the country’s aging population. Interestingly, this is occurring at the same time as a low unemployment rate, causing some to speculate that we may be accepting an excessive number of newcomers that our economy cannot accommodate.
Despite the rise in immigration in recent times, the level of unemployment has not changed significantly and has stayed at approximately 5%. However, there is still an abundance of job openings that surpass the unemployment rate. It appears that even with the influx of immigrants, there remains a substantial number of available positions. This situation is reinforced by the presence of temporary foreign workers who come to fulfill specific labor requirements, often through a facilitated process called LMIA. Considering these circumstances, it is economically reasonable to sustain the present level of immigration.
However, the long-term economic effects of immigration go beyond the immediate benefits. By enticing immigrants to come to Canada, it ultimately helps raise our potential GDP growth and per capita GDP. This is because recent immigrants are more inclined to find employment compared to native-born Canadians, and they are typically younger, resulting in increased working hours and years of productivity. In fact, the expansion of Canada’s working-age population (15-64 years) in 2022 was solely driven by immigrants. Thus, from an economic perspective, immigration appears to be a feasible remedy for Canada’s requirements and objectives.
The Demographic Perspective
The economic advantages of immigration in Canada cannot be disregarded without taking into account the country’s aging population. With our healthcare system, retired individuals can place a substantial burden on our economy. This is particularly evident in provinces lacking large urban areas, where there are smaller economies, a greater proportion of elderly individuals compared to the working-age population, and less immigration to fulfill their labor needs.
The Desjardins report poses the query of how much immigration is necessary in order to support Canada’s aging population and facilitate economic development. Achieving this balance would guarantee an improving quality of life and the long-term viability of public funds. Desjardins suggests that in order to uphold the current ratio of individuals of working age to the elderly until 2040, Canada would need to annually increase its working-age population by an average of 2.2%. However, in 2022, there was only a 1.6% growth in the working-age population.
If Canada intends to keep the conventional proportion between its older population and those of working age stable until 2040, it would be necessary to increase the working-age population by 4.5% each year. In both situations, Canada would have to considerably increase its immigration rates compared to the levels recorded in 2022.
