Canada must find the balancing of integrating immigrants, using the full potential of its current workforce, and accommodating population growth, a new report says.
Such a balance is key to Canada’s sustainable economic and social development in the face of evolving demographic changes, according to the TD Bank report.
Last year, Canada’s government attempted to address labour market shortages through a multitude of policy implementations.
However, the resultant increase in the number of skilled foreign workers is so unprecedented that it is accompanied by looming concerns about potential dislocations in other segments of the economy, such as housing affordability, healthcare availability, infrastructural expansion, and social support platforms.
“Greater thought and estimation needs to occur on what’s a true absorption rate for population growth,” said report authors Beata Caranci, James Orlando, and Rishi Sondhi.
“Policy cannot be singularly focused on the perceived demands of employers, and even educational institutions.”
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Canada’s Population Surge
In combination with several factors, Canada’s population saw a 1.2 million boom in the last 12 months, which provided support to the labour market and fueled economic growth prospects for the country.
This growth acceleration is predicted to persist through at least 2023, due to an influx of non-permanent residents (NPRs) in the form of work permit, study permit, and refugee status holders.
For one, last year IRCC removed the limit on the number of low-wage positions a company can fill using Temporary Foreign Workers (TFWs) in seasonal industries.
Moreover, the limit on allowable TFWs was upped to 20% of the workforce for firms, and firms in industries with large job vacancies could push that limit even further to 30%.
Due to a combination of the two measures, there was an observable jump in the number of TFW positions approved in 2022.
Canada also accepts a significant number of international students per year, many of whom become part of the workforce after graduation.
In furthering the intake of this demographic, a Canadian federal advisory panel recommended doubling the number of international students from roughly 240k in 2011 to 450k in 2022. However, Canadian educational institutions have exceeded even these numbers, with 807k study permits being issued last year.
The last NPR category – asylum seekers – is usually dependent on world events, and thus fluctuates. Russia’s invasion of Ukraine displaced millions, of which over 1.1 million applications have been submitted under the Canadian-Ukraine Authorization for Emergency Travel (CUAET). Out of these, over 800k have been granted approval till now.
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The Effects of Canada’s Population Boom
Canada has extracted large benefits from these immigrants. Monthly job growth has averaged around 40k since last spring, and job vacancies have been kept under control.
This has also levelled off the unemployment rate, which – without immigration – would have fallen to as low as 4.5%.
Nevertheless, there have been some negatives for the Canadian market. There are signs of a housing shortage, according to the TD report, which is expected to continue as population further expands.
What Needs to be Done
As per the authors of the report,” population growth is a good thing and a necessary remedy to aging domestic demographics.”
These benefits, however, may erode if the increase is too fast-paced compared to Canada’s ability to plan and absorb newcomers to the country’s socio-economic infrastructures.
Recent policies have had positive impact on countering these shortfalls. For example, recent initiatives to reduce credential-recognition barriers among medical professionals, engineers, and other professionals ease the strain on the healthcare industry.
For example, the College of Registered Nurses of Alberta made its application process easier, so that more internationally-trained nurses already living in Canada started applying. This reduced strain on the housing/social system.
“A lot can be done to better integrate both new and existing Canadians so that people can reach their full potential,” wrote the authors.
“This way the economic pie won’t just grow in size, but the quality will increase as well.”
