May 10, 2023

Why Canada Welcomes So Many Immigrants

Canada is a country known for its diversity and openness to immigrants. As of 2021, immigrants represent 23% of Canada's total population, the highest proportion since the Confederation in 1867. Furthermore, Canada has set ambitious immigration targets for the coming years, aiming to welcome 465,000 immigrants in 2023, 485,000 in 2024, and a milestone of 500,000 new Canadian permanent residents in 2025. These numbers might leave you wondering, why is Canada accepting so many new immigrants. In this blog, we will delve deeper into this subject, starting with an understanding of current Canadian population trends.


Canada's Aging Population

One crucial factor that drives Canada's immigration policy is the aging of its natural population. According to the 2021 census, 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. 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. These trends signal that Canada's population is aging rapidly.


Canada's Low Fertility Rate

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 most significant year-over-year decrease in births (-3.6%) since 1997.


Why Canada Needs Immigration

Canada needs immigration for continued economic development and growth. A weak population and lacking labor force will constrain production and subsequent spending, which is detrimental to a country's economic well-being. Immigrants accounted for nearly 80% of the country's population growth during the last census reporting period, and the population grew almost twice as fast as other G7 countries.

Immigrants contribute significantly to Canada's labor force growth, accounting for 79.9% of national workforce growth between 2016 and 2021. Heightened immigration can help Canada address a "historic" employment shortage. RBC economists Nathan Janzen and Claire Fan noted that Canada's current labor market circumstances are limiting over half of all Canadian businesses from increasing production compared to 40% before the pandemic and 30% a decade ago. 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.

Immigration will also 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. Heightened levels of immigration will directly contribute to national economic growth.

In conclusion, Canada's immigration policy is driven by a need to address demographic trends that threaten the country's economic well-being. Canada's aging population and low fertility rate have led to a weak population and lacking labor force. To ensure continued economic development and growth, Canada relies heavily on immigration for population growth. Heightened immigration can help Canada address employment shortages and boost workforce productivity. 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. Therefore, it is not surprising that Canada has one of the most generous immigration policies in the world.


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