A recent report by Desjardins examines whether Canada is on track to meet its revised population targets.
In October 2024, the Canadian federal government unveiled a strategic plan to reduce its permanent resident (PR) admissions and decrease the proportion of temporary residents from 7.4% to 5% of the total population over three years. This initiative aimed to address concerns about housing, infrastructure, and social services strained by rapid population growth. Now, several months into the implementation, it’s crucial to assess whether these policies are effectively steering Canada toward its population objectives.
On This Page, You Will Find:
- An analysis of Canada’s progress in achieving its revised population targets.
- Key findings from the Desjardins report on demographic shifts and immigration policies.
- The impact of reduced permanent and temporary resident admissions on the economy.
- Challenges associated with balancing population growth and economic stability.
Current Population Trends
Recent data from Statistics Canada’s Labour Force Survey (LFS), as cited in the Desjardins report, provides insights into the nation’s demographic shifts. While year-over-year population growth remains elevated, there’s a noticeable deceleration in month-over-month increases, especially among younger demographics aged 15 to 24. This age group predominantly comprises international students, suggesting that policy measures targeting temporary residents are beginning to take effect.
The prime working-age cohort, those between 25 and 54 years, also exhibits a slowdown in growth. This segment includes many temporary foreign workers and new permanent residents. Notably, December 2024 marked the first contraction in the number of recent immigrants (those in Canada for five years or less) in a year, and it was the most significant decline since 2022. These trends indicate that the influx of newcomers is tapering, aligning with the government’s revised immigration policies.
Policy Measures and Their Impact
The government’s approach to managing population growth has been multifaceted. Key measures include:
- Reducing Permanent Resident Admissions: The target for new permanent residents has been adjusted downward, with plans to admit 395,000 in 2025, decreasing to 380,000 in 2026, and 365,000 in 2027. This is a significant reduction from the 485,000 planned for 2024.
- Limiting Temporary Residents: Efforts are underway to decrease the share of temporary residents, such as international students and temporary foreign workers, to 5% of the total population by the end of 2026. This involves setting caps on study permits and tightening eligibility criteria for temporary work programs.
These policy adjustments aim to balance the economic benefits of immigration with the capacity of Canada’s housing market, infrastructure, and social services.
Economic Implications
The Desjardins report highlights the economic ramifications of decelerating population growth. Historically, Canada’s robust population increases have been a cornerstone of its economic expansion, fuelling consumer demand and labour force growth. A moderated population trajectory could lead to:
- Labour Market Adjustments: A slower influx of working-age individuals may alleviate some labour market pressures, potentially leading to tighter labour markets and upward wage adjustments in certain sectors.
- Housing Market Stabilization: Easing population growth could temper housing demand, providing relief in overheated real estate markets and addressing affordability concerns.
- GDP Growth Modulation: With a smaller population base, overall Gross Domestic Product (GDP) growth might decelerate. However, GDP per capita—a critical measure of individual economic well-being—could stabilize or even improve if economic output remains steady.
The Bank of Canada has acknowledged these dynamics, noting that reduced immigration levels are likely to impact economic growth projections. Governor Tiff Macklem stated that while the economy is currently “soft,” the recent rate cuts are expected to support a gradual strengthening in 2025 and 2026.
Challenges and Considerations
While the initial data suggests progress toward the government’s population targets, several challenges persist:
- Policy Implementation Lag: Changes in immigration policy can take time to manifest fully in population statistics due to processing times and existing commitments.
- Economic Dependencies: Certain industries, such as agriculture, technology, and healthcare, heavily rely on immigrant labour. Abrupt reductions in immigration could lead to labour shortages, affecting productivity and service delivery.
- Public Sentiment and Political Dynamics: Public opinion on immigration is nuanced. While there’s recognition of its economic benefits, concerns about housing affordability and social service capacity influence policy directions. The government must navigate these sentiments carefully to maintain social cohesion and political support.
Canada is making measured strides toward its revised population targets. The slowdown in both permanent and temporary resident growth aligns with policy objectives set in late 2024. However, achieving a sustainable balance between population growth and economic vitality requires continuous monitoring and adaptive policy measures. As the situation evolves, stakeholders must remain vigilant to ensure that Canada’s demographic strategies support both its economic aspirations and the well-being of its residents.
The Desjardins report concludes that while Canada is progressing toward its revised targets, future adjustments may be necessary to balance economic needs and demographic sustainability.
FAQ: Is Canada Achieving Its Population Targets?
Why did Canada decide to reduce its immigration levels?
Canada revised its immigration strategy to address concerns about housing availability, infrastructure strain, and social service capacities. The goal is to balance economic growth with sustainable population expansion by lowering the share of temporary residents to 5% and gradually reducing permanent resident admissions from 485,000 in 2024 to 365,000 by 2027.
How has the slowdown in immigration affected Canada’s economy?
A slower population growth rate impacts various economic sectors. While reducing immigration may help stabilize housing markets and improve affordability, it could also lead to labour shortages in key industries. However, the Bank of Canada anticipates that recent rate cuts will support gradual economic strengthening by 2025 and 2026.
What evidence suggests that Canada is meeting its population targets?
Data from Statistics Canada and Desjardins indicates a slowdown in month-over-month population growth, especially among younger demographics and new immigrants. December 2024 saw the first contraction in the number of recent immigrants in a year, aligning with the government’s policy measures.
Will reducing temporary residents affect Canada’s labour market?
Yes, certain industries like agriculture, healthcare, and technology rely heavily on temporary foreign workers. A reduction in temporary residents could tighten the labour market, leading to wage increases in some sectors but also posing challenges for businesses that depend on immigrant labour.
What are the long-term implications of Canada’s new immigration strategy?
If effectively managed, a controlled immigration approach could stabilize infrastructure and housing demand while maintaining economic growth. However, Canada must remain flexible to adjust immigration policies based on evolving labour market needs and demographic shifts to avoid unintended economic disruptions.
