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Why Immigration Is Vital to Canada’s Future Economic Growth

Canada’s economic growth is becoming increasingly tied to immigrants as aging workers born in the country drop out of the labour force.

The percentage of immigrants in working-age population has been steadily increasing for the last decade as the Canada-born proportion drops, illustrating the need to make up for the shortfall by bringing in foreign workers.

Canada’s economic growth is becoming increasingly tied to immigrants as aging workers born in the country drop out of the labour force

In 2006 less than 20 per cent of the workforce – those aged 15 and over – were landed immigrants while more than 78 per cent were born in Canada.

But fast forward 10 years and the latest data released by Statistics Canada shows an immigrant percentage just less than 24, while the Canada-born proportion has dropped almost as low as 74 per cent.

If this trend continues – and there’s no indication it will not – the two percentage measures will become closer and closer together.

The numbers are more dramatic over the last 12 months, when the number of immigrants in work increased by more than 260,000, 6.6 per cent higher than a year ago.

In the same period, the number of native-born workers has decreased by 93,300, although it is showing signs of recovery in the last two months.

Analysts say this data shows Canada has reached the point where it cannot grow without immigrants, with Canadian-born workers exiting the labour force at such a rate.

There could also be a link to the ongoing recession in the oil-reliant provinces, including Alberta, which have lower concentrations of immigrants. The result is economic activity being pushed towards cities including Toronto and Vancouver, which have higher immigrant populations. As an example, the Toronto workforce has been more than 50 per cent made up of immigrants for the last eight months.

While these figures are evidence of the direct beneficial impact of immigration in Canada, there are others as well.  A recent study also showed how the children of immigrants outperform their Canadian peers in terms of both high school and university graduation rates.

And recently data became available that confirmed immigrants are more likely to start their own businesses than their Canadian-born counterparts, a key component of economic growth.

Immigration has been an important part of government agenda.  It remains essential in most OECD countries, but especially in Canada, in part to offset demographic developments, including low fertility rates, an aging population, a growing elderly dependency ratio, a shrinking labour force and high out-migration rates.

Policies are clearly taking hold as Canada received its greatest number of immigrants in 45 years in the first quarter of this year, with 86,216 entering the country, a number bolstered by more than 25,000 Syrian refugees.  Overall, Canada’s population spiked during the first quarter of 2016, when it rose by 106,966 to 36,155,487.

With its progressive immigration policies, supporting balanced immigration levels, Canada manages to foster a positive attitude towards immigrants.  Its policies feature participation of employers, and government who share equally in the challenge of foreign worker recruitment.

While other major countries, including the US and the UK, struggle with a negative public perception of immigration, the current Canadian government was elected on its compassion for Syrian refugees after campaigning on a promise to bring in 25,000 which it delivered earlier this year.

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