Why is Canada accepting so many immigrants?

As of 2021, “people who were, or had ever been, a landed immigrant or permanent resident in Canada” — grouped together for simplicity as “immigrants” — represent 23% of this country’s total population, the highest proportion recorded since Confederation in 1867.

The highest among all G7 countries, Canada has also now topped its previous record set in 1921, when immigrants made up 22.3% of the country’s population.

According to population projections from Statistics Canada, if current demographic trends continue, “immigrants could represent [anywhere] from 29.1% to 34.0% of Canada’s population by 2041.”

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Such projections are further reinforced by Canada’s annual Immigration Levels Plan for 2023-2025, which was released on November 1, 2022. According to current immigration targets, Canada is aiming to welcome 465,000 immigrants in 2023, 485,000 newcomers in 2024 and a milestone 500,000 new Canadian permanent residents in 2025.

Seeing all these significant numbers, you may wonder: why is Canada accepting so many new immigrants?

Let’s look deeper into this subject, starting with an understanding of current Canadian population trends.

To appreciate why immigration is becoming so prolific across Canada, two crucial factors — the aging of Canada’s natural population and the country’s low fertility rate — must be understood. These demographic trends are causing Canada’s labour market to shrink, negatively impacting the country’s economy in many ways.

Canadians are aging quickly

According to the 2021 census, from 2016 to 2021, the number of children under the age of 15 grew at a pace six times slower than the number of people aged 65 and older. Moreover, the percentage of persons aged 65 and over in Canada has risen to 7 million, representing an increase of 18.3% between 2016 and 2021. This age group of Canadians now represents 19% of the total population. This reality, along with the fact Canada’s largest-ever five-year increase in persons aged 65 or older (+20%) came in the census reporting period immediately preceding the most current census (2011 to 2016), signals that Canada’s population is clearly aging rapidly.

Canadians are having fewer children

Adding to the concern surrounding downward trends in natural Canadian population growth is the reality that Canada’s fertility rate is below the population replacement level. The current population replacement level stands at 2.1 children per woman. Following a trend that has continued steadily since 2009, Canada’s fertility rate has steadily declined over time, reaching a record low of 1.4 children per woman in 2020. In 2020, Canada also experienced the lowest number of births since 2007 and the greatest year-over-year decrease in births (-3.6%) since 1997.

Solution: Canada needs immigration in order for the country to thrive

Canada needs immigration for continued economic development and growth.

A country’s inhabitants are what drive national spending and consumption, for which every country requires a strong labour force to ensure consistent production of goods and delivery of services. A weak population and lacking labour force will constrain production and subsequent spending, which is detrimental to a country’s economic wellbeing.

Thankfully, heightened immigration can help Canada better avoid such problems in this country.

Due to the issues addressed above, Canada relies heavily on immigration for population growth. In fact, nearly 80% of the country’s population growth during the last census reporting period (+1.8 million between 2016 and 2021) “was attributable to new arrivals to Canada either as permanent or temporary immigrants.” Over that time, Canada’s population “grew … almost twice as fast as other G7 countries.”

This immigration-driven population growth has been significantly beneficial for Canada’s labour force, as evidenced by the reality that immigrants in this country accounted for 79.9% of national workforce growth between 2016 and 2021. Heightened immigration also means that Canada will be able to work toward addressing what the Financial Post argues is a “historic” employment shortage.

Citing a report from RBC economists Nathan Janzen and Claire Fan, the Financial Post notes that Canada’s current labour market circumstances are “limiting over half of [all] Canadian businesses from increasing production compared to 40% before the pandemic and 30% a decade ago.” Thankfully, “an influx of immigration”, including a focused effort toward “putting newcomers’ skills to work and integrating this talent into the Canadian workforce” can provide a much-needed boost to workforce productivity.

Ultimately, as a result of the boon that immigration will provide to Canadian labour force growth, immigration will consequently help accelerate economic growth across the country. As more new immigrants become employed, earn money, and subsequently spend money that goes back into the economy, Canada’s economy will continue developing positively. Additionally, as more newcomers to Canada continue to join Canadian citizens in paying taxes and spending money on housing, transportation, and other necessities, heightened levels of immigration will directly contribute to national economic growth.

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