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Immigration to play a major role in Canada’s economic growth, says study

Immigration to play a major role in Canada’s economic growth, says study

Canada will need to rely heavily on immigration for its labour force if the country wants to maintain its social infrastructure and healthy growth, a report released by the Conference Board of Canada has found. According to the study, even if Canada harnessed all of the new graduates and groups under-represented in the workforce such as women, the disabled and Indigenous people, the country would still need to depend on immigrants to meet its labour needs.

It is expected that 11.8 million Canadians will finish school and enter the workforce between 2018 and 2040. But during the same period, around 13.4 million workers would be retiring from the workforce, creating a huge demand for skilled labour.

The 57-page study, titled “Can’t Go it Alone. Immigration is Key to Canada’s Growth Strategy,” says that Canada’s retirement rate has gone up, and by 2030 all 9.2 million of Canada’s most prominent worker cohort — the baby boomers — will be of retirement age. “This reality, combined with a low fertility rate, is creating economic and fiscal pressure. As such, to maintain its high living standards, Canada needs solutions to replenish those exiting the workforce.”

According to the report, it is necessary to maintain a sizeable labour force for stimulating the economic activity as well as for bolstering the tax revenues to pay for vital social expenditures such as rising health-care costs.

It is expected that the annual immigrant intake of Canada will rise to 350,000 by 2021 from the current intake level of 300,000. This rise is aimed to compensate the baby boomers who would be departing from the work force by then. Those aged 65 or above will comprise 25 per cent of the country’s population, compared 17 per cent today. At the same time, Canada’s low birth rate, at 1.5 births per woman, is not expected to go up.

In this context, immigration will be among the most formative policy measures to grow the Canadian labour force and economy, says the study. “If Canada gradually raises its immigration rate to 1 per cent of its population by 2030 — up from about 0.8 per cent today — newcomers would contribute some 5.3 million workers to the labour force and one-third of the economic growth rate between 2018 and 2040,” the study says.

Increased immigration and participation of the under-represented workers can result in a labour force growth of 1.1 per cent annually between 2019 and 2040. This is only slightly below the 1.3 per cent yearly growth rate of Canada between 2000 and 2017. Even though technological advancements may eliminate some jobs, they will also lead to new jobs, according to the report.

Skilled labourers are highly in demand in Canada and if you make the most of this opportunity, don’t hesitate to contact us.