Senior Director of Canadian Economics
Immigration Nation: Economic Impacts of Federal Immigration Targets
December 1, 2022
- Immigration to Canada has been hitting record highs and is expected to climb even further. This will help to boost Canada’s population growth over the medium term.
- Newcomers to Canada are disproportionately economic immigrants, which favours younger, better educated and more experienced applicants. As a result, new immigrants tend to have higher employment and participation rates than workers born in Canada. Adding to their number will help to boost potential GDP growth, both on an aggregate and per capita basis.
- These new Canadians also have a higher average unemployment rate than people born in Canada, although this difference disappears over time. Their unemployment rate also tends to be more cyclical. This has raised concerns that heightened immigration at a time when the Canadian economy is teetering on recession may exacerbate a potential labour market rout. However, with a record-setting job vacancy rate in Canada, the labour market is currently very tight. The economic downturn is also expected to be short-lived. There is a role for policy to play here in smoothing the path to employment for these new Canadians as well, as they are vital to boosting long-term economic prosperity.
- This note is part of ongoing work at Desjardins Economic Studies on the economic impacts of Canada’s shifting demographic picture. Look for future commentary on the implications of higher immigration targets on provincial economies and the Canadian housing market.
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