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Analysis: Anticipated Increase in Canada’s Immigration Level for the Future

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On November 1st, Canada declared its intention to maintain a consistent immigration quota. Aiming to receive approximately 500,000 immigrants annually in 2025 and 2026.

Canada’s existing immigration levels reach unprecedented heights. A recent Royal Bank of Canada (RBC) report indicates that there may be a necessity for another increase in immigration levels. The report shows that the current immigration rates in Canada will likely prove insufficient to sustain the country’s population growth and address the demands of the domestic labor market.

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Why a Further Increase in Immigration is Necessary

Immigration targets stabilize at 500,000 newcomers annually until at least 2026. While this figure represents a record-breaking influx (approximately 1.3% of Canada’s current population), it falls short of effectively stabilizing its demographic landscape. Consequently, it is insufficient to address the anticipated labor demand in the future sustainably.

According to the RBC’s report, Canada would require an annual immigration rate equivalent to 2.1% of the current population. Amounting to 849,944 new permanent residents each year at the time of writing. This implies that the existing immigration targets would need to increase by more than 300,000 immigrants annually to counterbalance the challenges posed by a low fertility rate and an aging population in Canada.

A 2023 Desjardins study focusing on the ideal immigration volume for Canada echoed similar conclusions. The report emphasized not only the necessity to augur Canada’s immigration efforts. Still, it underscored the importance of this increase being primarily directed at the growth of the working-age population. The 500,000 newcomer figure encompasses immigrants from all categories, including family sponsorships and refugees. According to the Desjardins study, annual growth in the working-age population would need to be at 2.2%. Equivalent to 721,600 newcomers to maintain current ratios of young to old working people. Alternatively, a growth rate of 4.5% annually would be required to preserve the historic balance of the working-aged to retired population.

In light of these projections, it becomes evident that Canada must significantly elevate its current immigration levels. This imperative extends beyond demographic considerations and holds strategic importance for meeting labor demands. Fostering economic growth, and supporting the nation’s healthcare, infrastructure, and broader social institutions.

The Imperative of Maintaining Stability in Immigration Levels from 2024 to 2026

While acknowledging Canada’s recognized long-term need for immigrants, the RBC report contends that the decision by IRCC to stabilize current immigration levels is justified.

The success of Canada’s immigration program hinges crucially on its ability to effectively welcome newcomers into demographic landscape and economy. Recent challenges in the housing sector have brought to light concerns about Canada’s capacity to provide affordable housing for new immigrants and its existing citizens. This aspect has sparked additional debates surrounding the broader issue of immigration.

In response, the IRCC has committed to reassessing the number of temporary residents, particularly those on study or work permits. A category that experienced significant growth in the aftermath of the COVID-19 pandemic. Furthermore, the federal government has pledged to address critical labor shortages in the construction sector. An industry grappling with persistent job vacancies. This commitment aligns to achieve balanced immigration, reflecting the stabilized immigration targets. Such an approach aims to strike a balance between meeting labor shortages. And addressing the increasing demand for housing, aligning with the recommendations of economists in Canada.

The Present Circumstances

Canada needs immigration for various reasons. With the most urgent being the imperative to address concerns related to the country’s demographic composition and labor market.

Characterized by one of the world’s aging populations and a low fertility rate (1.40 births per woman), a trend observed in many Western countries, Canada faces challenges in replenishing its population solely through natural births. Immigration emerges as a crucial solution to this demographic dilemma. Furthermore, Canada’s ninth-largest global economy by Gross Domestic Product (GDP) imposes demands on its labor market intricately connected to the population replenishment challenge.

These intertwined factors underscore the indispensability of immigration for sustaining Canada’s national well-being and prosperity in the foreseeable future. While these factors may contribute to the current surge in immigration rates in Canada, the ongoing stabilization of immigration targets only unveils part of the story.

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