Population is growing faster than the economy can handle, says National
Canada is caught in a “population trap” for the first time in modern history and needs to limit immigration to escape it, say economists with the National Bank of Canada.
A population trap, according to Oxford dictionary, is when the population is growing so fast that all available savings are needed to maintain the existing capital–labour ratio, making any increase in living standards impossible.
National Bank’s report joins the growing chorus of concern that the influx of newcomers over the past two years, many of whom are temporary workers or students, is too much for the economy to handle. Others caution there could be economic repercussions if Ottawa cuts off the flow too quickly.
Canada’s population grew by 1.2 million in 2023, a “staggering” amount when you consider that the next biggest surge was when Newfoundland joined the nation in 1949, says the report by National Bank economists Stéfane Marion and Alexandra Ducharme.
From a global perspective Canada’s population growth of 3.2 per cent last year was five times higher than the average of Organisation for Economic Co-operation and Development nations.
“We currently lack the infrastructure and capital stock in this country to adequately absorb current population growth and improve our standard of living,” said the economists.
No where is this strain more evident than in housing, they say.
National says the shortfall has reached a record of only one housing start for every 4.2 people entering the working-age population. The historical average is 1.8.
Government programs are underway to address this, but to meet demand and reduce housing inflation, Canada would need to double its housing construction capacity to about 700,000 starts a year, “an unattainable goal,” according to the economists.
“More worrisome is the fact that the decline is not simply due to a lack of housing infrastructure,” they said.
Excessive population growth is also impeding economic well-being, they argue. A fact they say is underscored by real gross domestic product growth per capita stagnating for six years in a row.
Capital stock, the physical and financial resources used to create value in an economy, has failed to keep up with population growth. Private non-residential capital stock has been falling for seven years, National says, and is now is at the same level as in 2012, while it is at a record high in the United States.
According to National calculations, capital stock per capita plummeted to about 1.5 per cent in 2023, compared with a high of almost 4.5 per cent in the 1960s.
“This means that our population is growing so fast that we do not have enough savings to stabilize our capital-labour ratio and achieve an increase in GDP per capita,” the economists said. “Simply put, Canada is in a population trap for the first time in modern history.”
If Canada is to improve its productivity, policy makers must set population targets against the constraint of our capital stock, they argue.
“At this point, we believe that our country’s annual total population growth should not exceed 300,000 to 500,000 if we are to escape the population trap.”
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Average asking rents in Canada hit a record high of $2,178 in December 2023, up 8.6 per cent from the year before. Over the past two years, rents have increased by 22 per cent or an average of $390 a month, said Urbanation in its January Rentals.ca report.
One-bedroom apartment rents increased the most, rising 12.7 per cent over the past year to reach an average of $1,932.
But British Columbia kept the distinction of Canada’s most expensive market for apartments. The average rent here was $2,500 in December, even after slipping 1.4 per cent lower in 2023. The year before B.C. apartment rents soared 18.5 per cent.
WINNIPEG – Manitoba politicians are expected to pass several bills into law before the likely end of legislature session this evening.
The NDP government, with a solid majority of seats, is getting its omnibus budget bill through.
It enacts tax changes outlined in the spring budget, but also includes unrelated items, such as a ban on replacement workers during labour disputes.
The bill would also make it easier for workers to unionize, and would boost rebates for political campaign expenses.
Another bill expected to pass this evening would place new restrictions on the sale of machetes, in an attempt to crack down on crime.
Among the bills that are not expected to pass this session is one making it harder for landlords to raise rents above the inflation rate.
This report by The Canadian Press was first published Nov. 7, 2024
The Canadian Press. All rights reserved.
A Richmond Hill, Ont., man has been charged with second-degree murder in the death of his seven-week-old infant earlier this year.
York Regional Police say they were contacted by the York Children’s Aid Society about a child who had been taken to a hospital in Toronto on Jan. 15.
They say the baby had “significant injuries” that could not be explained by the parents.
The infant died three days later.
Police say the baby’s father, 30, was charged with second-degree murder on Oct. 23.
Anyone with more information on the case is urged to contact investigators.
This report by The Canadian Press was first published Nov. 7, 2024.
The Canadian Press. All rights reserved.
TORONTO – Ontario is pushing through several bills with little or no debate, which the government house leader says is due to a short legislative sitting.
The government has significantly reduced debate and committee time on the proposed law that would force municipalities to seek permission to install bike lanes when they would remove a car lane.
It also passed the fall economic statement that contains legislation to send out $200 cheques to taxpayers with reduced debating time.
The province tabled a bill Wednesday afternoon that would extend the per-vote subsidy program, which funnels money to political parties, until 2027.
That bill passed third reading Thursday morning with no debate and is awaiting royal assent.
Government House Leader Steve Clark did not answer a question about whether the province is speeding up passage of the bills in order to have an election in the spring, which Premier Doug Ford has not ruled out.
This report by The Canadian Press was first published Nov. 7, 2024.
The Canadian Press. All rights reserved.
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