Canadian Prime Minister Justin Trudeau has fueled economic growth and plugged gaps in the labor market by ramping up immigration, but now new arrivals are straining public services and contributing to an overheating economy, economists say.
Since taking power in 2015, Trudeau has brought in an estimated 2.5 million new permanent residents, driving the population above 40 million.
Canada’s population grew at its fastest pace since 1957 last year, placing it among top 20 fastest growing countries in the world, Statistics Canada said, in part offsetting the effects of aging residents who are retiring and adding to healthcare costs.
In large part thanks to immigration, Canada has matched the United States with an average GDP growth of just over two per cent over the past decade, well above the 1.4 per cent G7 average, according to Marc Ercolao, an economist at TD Securities.
But problems caused by rapid immigration are beginning to show. First of all, the Bank of Canada struggled to pin down the impact of the newcomers as it tried to cool economic growth.
Bank of Canada Governor Tiff Macklem has said immigration adds to both supply and demand, but the overall effect has increased the need for higher interest rates. While immigrants helped ease a labor shortage, they added to consumer spending and housing demand.
“If you start an economy with excess demand (and) you add both demand and supply, you are still in excess demand,” he said about immigration earlier this month after hiking rates to a 22-year high of five per cent.
The more concrete problems are the growing strains on transit, housing and healthcare, issues that have begun to dog the federal government as municipal and provincial leaders increase calls for more funding to address them.
“If we want to do more immigration, fine, but let’s have a suite of policies” that increase infrastructure investment for “transit, housing, healthcare… schools,” said Chris Ragan, director of the Max Bell School of Public Policy at McGill University in Montreal and an adviser to the Conservative Finance Minister Jim Flaherty in 2009-10.
“Our communities and our economy are made stronger every day by people who chose to move to Canada,” said a spokesperson for the Finance Ministry.
Most “will contribute to Canada’s economic prosperity and… help address the labor shortages,” the spokesperson said.
Earlier this month, under pressure from Toronto’s new mayor, Trudeau’s government pledged nearly $100 million to the city to help house refugees who had been sleeping on the street.
One-fifth of Canadians in the publicly funded healthcare system do not have a family doctor, the Angus Reid Institute research firm said last year. In Toronto, Canada’s largest city, an average driver lost 118 hours in traffic in 2022, up 60 per cent on the year and the third-highest in North America, data analytics firm Inrix says.
While immigration adds to annual GDP, per capita GDP has grown only 2.4 per cent since the first quarter of 2016 compared to 11.7 per cent for the United States. That means Canadians’ wealth, or their standard of living, is rising more slowly than in the U.S.
“The Canadian economy on a per-capita basis is flat on its back,” said David Rosenberg, chief economist and strategist at Rosenberg Research. Through population growth “you can create this mirage of economic prosperity, but in the end that’s what it is, a mirage,” he said.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
