Prime Minister Justin Trudeau’s administration is on track to meet this year’s goal of 401,000 new permanent residents and is set to revise up next year’s target of 411,000, a government source said.
Canada’s successive governments have relied on immigration to drive economic growth in the face of a declining fertility rate, which hit a record low last year. With the pandemic triggering early retirements among aging Canadians, attracting immigrants has grown more important. Also, the country targets high-skilled immigrants who tend to bring in money and earn enough to compete for desirable housing, according to Reuters.
“Canada needs immigration to create jobs and drive our economic recovery,” Immigration Minister Sean Fraser told Reuters. “It’s not just that one in three Canadian businesses are owned by an immigrant, but also that newcomers are helping to tackle labor shortages.”
Housing costs have surged due largely to low interest rates and a supply shortage. Migration was another factor, especially pre-pandemic. Now that most borders are open again, more newcomers are likely.
Housing prices have helped stoked inflation to its highest in 18 years. Government plans to mitigate housing costs will take time to put in place, and some measures may further strengthen demand, economists say.
“It is a conundrum,” said Stephen Brown, senior Canadian economist at Capital Economics, said of the effect of immigration on housing costs.
Still, ongoing construction and the need for labor justify more immigration. Canada has reached a point where the labor force will “flatline” without immigration, Brown said.
Job vacancies in Canada have doubled so far this year, official data shows. The association of Canadian Manufacturers & Exporters is asking the government to double its target for economic class immigrants by 2030 because of worker shortage in manufacturing.
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