Studies Show Profound Economic and Population Impact of Ending Immigration

According to results from a recent study, Canada’s economy would suffer without immigration.

A new report from the Conference Board of Canada predicts that Canada’s economy would weaken by 2040 if immigration stopped. This is largely due to Canada’s small population and an ageing workforce.

Canada’s ageing population and workforce are the result of Canadians having fewer children and more Baby Boomers entering retirement age.

The report also predicts that by 2040, Canada’s population growth will be completely driven by immigration. Currently, immigration is responsible for 71 per cent of Canada’s population growth, and up to 90 per cent of the labour force growth according to recent estimates.

The report predicts that immigration will account for 100 per cent of Canada’s population growth by 2040 since the number of deaths will exceed the number of births in Canada.

The Conference Board of Canada’s report examined two scenarios, the first examining the potential impact on the Canadian economy should immigration numbers decrease or stop altogether. Meanwhile, the second scenario examined the potential impact of raising immigration numbers from 0.8 per cent in 2017 to one per cent.

The Conference Board found that if Canada were to eliminate immigration altogether, 26.9 per cent of the population would be retirement age (65 and over) by 2040. Furthermore, the ratio of workers to retirees would decrease from 3.6 to 2.0.

Canada’s GDP economic growth would decrease from 1.9 per cent to 1.3 per cent annually, and taxpayers would be on the hook for increased costs relating to social services like health care.

A combination of a smaller workforce, lower local demand, and higher taxes could also decrease levels of business investment in Canada, which would further hurt the economy.

Immigration helps strengthen the economy by boosting the workforce and economic activity. By filling labour shortages with newcomers, the working-age population increases, with more earners buying goods, paying taxes, and contributing to Canada’s economy.

Many immigrants are also young, being either students, skilled talent or children. Bringing in young people helps balance the ageing population and workforce, providing more generations of younger Canadians.

The Conference Board report recommends boosting Canada’s immigration rate to one per cent. While Canada already prioritizes economic immigrants to contribute to the workforce, the report suggests that Canada should prioritize family class immigrants as well. Immigrants and refugees are more likely to stay in Canada and have higher rates of homeownership if they are reunited with their families.

The report also recommends addressing the chronic low income among family class immigrants since Canada will become increasingly more dependent on immigration for economic growth and stability.

Canada must also work toward maintaining integrity within and public support for its immigration system as anti-immigration sentiments are growing worldwide.

Given the numbers, Canadians must continue to welcome immigration if Canada wants to maintain a healthy economy.