At a time when skeptics are questioning Canada’s plan to ramp up immigration, a new report argues the country needs to welcome a lot more newcomers to counter-balance its aging demographic.
A Desjardins report released Monday analyzes how much population growth among working-age Canadians is necessary to maintain the old-age dependency ratio, which refers to the ratio between 15 to 64-year-olds and those aged 65 and older.
It finds that the working-age population would have to grow by 2.2 per cent per year through 2040 to maintain the same ratio that existed in 2022.
And if the country wanted to go back to the average old-age dependency ratio it had between 1990 and 2015, that group of Canadians would have to grow by 4.5 per cent annually.
“I feel like the discussion around immigration levels in Canada, by and large, focuses on the immediate impact on the Canadian housing market,” said Randall Bartlett, Desjardins’ senior director of Canadian economics.
“And so what I wanted to do was sort of zoom out and provide some broader economic context around immigration and why immigration to Canada is important.”
The prospective ramp-up of immigration levels has sparked debate on whether the country can handle higher flows of newcomers amid a housing crisis, and what the total economic impact of having more people in the country would be.
Canada’s population grew by more than one million people last year, a record for the country. Its total population grew by 2.7 per cent, the fastest rate since 1957.
The strong population growth comes as the Liberal government eyes higher annual immigration targets, which would see the country welcome 500,000 immigrants per year by 2025.
Proponents of higher immigration argue that the labour market is able to absorb more workers, and the country needs more working-age Canadians to support the tax base as more people retire.
“We need immigration at a relatively high rate, actually, in order to offset the economic impacts of aging — to be able to pay for the health care that Canadian seniors are going to need,” Bartlett said.
A recent Desjardins analysis finds Canada’s plan to increase immigration could boost gross domestic product per capita if newcomers continue to have the same success getting work that they’ve enjoyed recently.
GDP per capita is the size of a country’s economy divided by its population. Many consider it to be a better measure of a country’s living standards than the overall GDP figure.
The employment outcomes of recent immigrants, particularly those brought in through the economic stream, have improved compared to those of previous cohorts. That’s in part because of changes to federal immigration policy.
In 2018, the median wage of economic immigrant principal applicants surpassed that of the Canadian population by the time they had been in the country for one year, according to Statistics Canada.
“We’re bringing in very, very talented people,” Bartlett said. They are able to find jobs and “generate earnings very quickly that are outpacing the Canadian average,” he added.
But critics argue that relying on immigration to supply workers for the economy can also serve as a disincentive for businesses to invest in technology that would boost labour productivity and reduce dependency on workers.
Bartlett said the federal government could modulate the flow of temporary foreign workers so as to encourage such investments.
But he conceded that housing serves as a major hurdle.
Desjardins estimates the country would need to build 100,000 more units every year to offset upward price pressures caused by having a higher number of permanent residents in the country.
A recent analysis by BMO found that for every one per cent of population growth, housing prices typically increase by three per cent.
The influx of newcomers into the country is already having an effect on the housing market, which rebounded this year despite interest rates being at their highest level in decades.
At its last interest rate decision, the Bank of Canada flagged population growth’s effect on housing prices as one of the factors feeding into inflation.
“Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing,” the central bank said in a press release on its latest rate hike.
Bartlett warned the erosion of housing affordability amid record population growth could damage public support for immigration and warrants swift action from government.
“There’s a risk Canadians could become less open and less positive… toward immigration,” Bartlett said.
“If that leads to scaling back immigration in a meaningful way, then that means Canadians are gonna be facing a significant bill going forward to meet the the aging costs of older Canadians.”
This report by The Canadian Press was first published July 17, 2023.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
