Despite record-breaking levels, the RBC suggested that an annual immigration rate of 2.1 percent of the current population, equivalent to 849,944 newcomers, is needed to address demographic challenges and labor market demands.
Despite record-breaking levels, the RBC suggested that an annual immigration rate of 2.1 percent of the current population, equivalent to 849,944 newcomers, is needed to address demographic challenges and labor market demands.
Canada’s plan to maintain immigration numbers at 500,000 newcomers annually until 2026 may not be sufficient, according to a recent report from the Royal Bank of Canada (RBC).
Despite record-breaking levels, the RBC suggested that an annual immigration rate of 2.1 percent of the current population, equivalent to 849,944 newcomers, is needed to address demographic challenges and labor market demands, the CIC News reported.
Canada’s current immigration levels, though already at historic highs, are deemed insufficient to address the dual challenges of an aging population and a low fertility rate (1.40 births per woman).
The RBC report said that relying solely on natural-born Canadians cannot sustain the country’s population and meet the demands of its labor market. Consequently, increased immigration becomes crucial for Canada’s future health and prosperity.
“The pause in targeted immigration levels is appropriate given housing challenges and eroding public support for higher levels of immigration,” the report said.
“With a weakening economy, labor markets should not feel a pinch overall with the pause in the number of new permanent residents. But Canada needs immigrants over the long term,” it added.
A Desjardins study released earlier in 2023 echoes these findings, citing the need for Canada to boost immigration efforts, particularly within the working-age population.
The study indicated that annual growth rates of 2.2 percent (721,600 newcomers) or 4.5 percent (1,476,000 newcomers) are necessary to maintain current ratios of young to old working individuals.
According to the study, determining the right level of immigration for Canada depends on the intended policy objectives.
The research cited the immediate need for foreign-born workers to meet current labor market demands. It emphasized the role of immigration in sustaining long-term GDP growth and fiscal stability, especially in provinces dealing with an aging population.
Acknowledging short-term housing challenges, the study suggests the federal government could promptly ease the strain by tightening requirements for non-permanent residents. However, this may slow temporary foreign worker entry, impacting wages or productivity investments.
“It’s a difficult balance to strike, and it speaks to the need for the federal government to marry Canada’s immigration policy with a results‑driven approach aimed at increasing the affordability of all types of housing,” the report said.
While recognizing the long-term need for immigrants, the RBC report supports the decision of Immigration, Refugees, and Citizenship Canada to stabilize current levels, citing the importance of the country’s ability to welcome and integrate newcomers into its demography and economy successfully.
The decision aligns with efforts to address housing concerns, with a commitment to reassess the number of temporary residents and tackle key labor shortages, particularly in the construction sector.
