Quebec 2026: A Pivotal Moment for Demographic Policy

Quebec is entering a period of structurally low unemployment, driven primarily by demographic factors. Given the province’s demographic fundamentals, namely rising retirements, low birth rates and slower growth in the labour force, Quebec’s unemployment rate is likely to continue converging toward 4% for the remainder of the decade, barring a recession.

The announced immigration targets will help slow the demographic decline, but they will not prevent stagnation in the labour force. Compared to the lower targets that were considered, the chosen objective (45,000 permanent immigrants per year) will better mitigate the effects of the aging population, but it will not be enough to offset the now-negative natural population growth, nor will it sustainably support labour supply.

The aging population will intensify pressures on public finances, unless productivity gains are made. The rising dependency ratio, combined with the falling participation rate, will limit growth in tax revenues, even as spending continues to increase, particularly on health care.

The appendixes present the analytical foundations of the report. Appendix 1 explores six demographic scenarios from now to 2050, based on different assumptions for immigration and fertility. Appendix 2 examines the decline in fertility and the limited effectiveness of pro-natalist policies. Appendix 3 assesses the productivity and capital accumulation gains required to offset the demographic constraints on economic growth.