Canada has a demographics problem. Nine million baby boomers will retire in the next decade. Canada only has a population of 37.6 million. In addition to losing 24 percent of the population to retirement in the coming years, Canada also has a low birthrate. The loss of these nine million workers cannot be replaced with Canada’s natural population growth and therefore Canada needs immigration now more than ever.
“Without an influx, we’ll become a very old country, and that’s a very expensive proposition,” Andrew Agopsowicz, a senior economist at RBC Capital Markets, said
Without immigration, the population of major cities like Vancouver, Toronto, and Montreal would have declined in 2019. Thankfully, years of increasing immigration targets have allowed Canada’s population and economy to grow but with COVID-19 related travel concerns, Canada’s immigration fueled growth is at risk.
But what about unemployment?
Canada, like most countries, is struggling with high COVID-19 related unemployment rates. Unemployment in Canada currently sits at 13.7 percent, up considerably from 5.5 percent earlier this year. There is a lot of work to be done to return the Canadian economy to pre-COVID levels, but there are reasons to be optimistic. Economists are hopeful that the unemployment rate will go down as more economies begin to reopen and workers return to their jobs. In another bright spot, there were higher than expected job creation numbers posted in May.
Whether Canada’s economy rebounds quickly depends on many factors. How Canada and the rest of the world contain the spread of COVID-19 will be the major determining factor. But how we innovate our economy also needs to be considered.
There is a great deal of research that proves that newcomers to Canada create jobs and foster innovation. Most recently, a Statistics Canada report published on June 9 highlights just how much Canada needs immigration, especially as it pertains to innovation. The report noted that companies owned by immigrants were 8.6 percent more likely to implement a product innovation than a company managed by Canadian-born individuals, and 20.1 percent more likely to implement innovative processes.
Why Canada needs immigration
Newcomers to Canada are typically younger, well educated, and job creators. They also help keep the population growing. A drop in immigration now will jeopardize the Canadian economy in both the short and long term.
In the short term, we would lose newcomers who come to Canada with innovative ideas and create jobs. In the long term, we risk a major shortfall of skilled workers as the nine million baby boomers retire.
And it’s not just permanent immigration Canada needs. Foreign students stimulate our post-secondary educational institutions. Those institutions then use that funding to spur innovation that attracts investment in Canada, which in turn creates jobs. Foreign workers also contribute to the Canadian economy by filling gaps in the labour market and supporting local economies. Those local economies use that revenue to fund social programs and build infrastructure which also creates jobs.
The Canadian economy needs to think outside the box. Canada needs to lead in innovation to help crawl back the economic losses caused by the pandemic. What better way to do that than to openly welcome newcomer families and accept their gracious offer to help build a better Canada.
Lauren Boorman
Rebecca Major
