On November 1, Immigration, Refugees and Citizenship Canada (IRCC) released their annual Immigration Levels Plan, which is used to guide their operations and determine the number of newcomers Canada will welcome.
This year’s target of 432,000 new permanent residents (PRs) is the highest ever in Canada’s history. The numbers for 2023 (465,000) and 2024 (485,000) will continue the upward trend of (500,000) in 2025.
The arrival of nearly 1.5 million people to Canada over the next three years will have an important impact on Canada’s labour force and economy. In this article, we share the forecast for Canada’s jobs and housing markets, and for the nation’s overall economic and social well-being.
An aging nation
Of Canada’s nearly 39 million people, around 8 million, or roughly 21.5% of the population, are newcomers. The targets set out by the IRCC will raise that number swiftly and sharply — and according to Rebekah Young, Scotiabank’s head of Inclusion and Resilience Economics, this is a positive development.
“We have more retired people, and fewer workers in the economy,” said Young. “That’s really constraining through an economic lens.”
Welcoming newcomers, who, according to Young, tend to be younger and better educated, is one way to find the help we need — and to shift our demographics.
The good news is Canada is one of the few advanced economies with a growing population. “Because we have such expansive targets for newcomers, we actually see our population growing by around 1.8% per year,” she said.
A younger, working, educated and enlarged population in turn helps the commercial sector.
“Newcomers are also consumers. They’re buying houses or vehicles, they’re going grocery shopping or to the movies, so they’re spending in the local economy,” Young pointed out.
And, of course, newcomers are also working and paying taxes — much-needed money that may not be coming in due to a shrinking labour force.
“They’re paying into federal, provincial and municipal revenues, that are then used to provide more services to Canadians, including supporting some of the benefits that go to aging Canadians,” she said.
Nearly 1 million job vacancies
According to Statistics Canada, there were 957,500 job vacancies in Canada in the first quarter of 2022 — the highest quarterly number on record.
“Labour shortages existed prior to the pandemic, but now they’re even more amplified.”
The pressure on industry is enormous. “Business leaders are increasingly vocal about labor shortages,” she said. “There’s an understanding that this isn’t temporary, that we are going to be facing skill shortages and skills mismatches long after the pandemic is gone.”
Even with the proposed immigration numbers, Young said that there will still be job vacancies.
And what kind of workers are arriving? “There are really highly educated newcomers that will come in and fill jobs in high tech sectors, particularly given that the U.S. immigration policies have been so closed,” she said.
The benefit, according to Young, is that we have access to a pool of workers who want to “make transformative change in some of these very high-end sectors that can enhance overall productivity.”
Young shared that Canada could do a better job in fully leveraging these skills as too many university-educated newcomers are in positions that aren’t the right fit for their abilities.
At the same time, newcomers who are in the earlier stages of their careers are filling important gaps as well, “If you look at the health care sector, for example, or home care — that caring economy — there are major vacancies there that are having a very real impact on Canadians.”
Finally, there are the more intangible benefits to boosting immigration. “The entrepreneurialism and the ideas, the innovation, the different way of thinking about things,” Young said. “Economics isn’t great at capturing the value of diversity but it’s clear that there are benefits there.”
“Where could the government improve is in expediency and bureaucracy,” Young said, noting that rapid expansion, as well as pandemic changes, to various programs have led to backlogs that can be challenges for both those waiting to come to Canada and businesses looking for talent.
A hot housing market
Houses and rentals in Canada have been expensive since before the pandemic. Even after the market peaked in 2022, affordability remains an urgent concern. Adding people without adding housing will only intensify the issue.
“We’re not building houses at a tremendous pace and that’s certainly a challenge. These are government challenges,” Young said. “Clearing some of the regulatory and bureaucratic processes that impede building more supply should help. We’ve just got an expanse of land here — that really shouldn’t be the issue.”
Newcomers will have to consider not only which communities need their skills, but also what the cost of living and wages looks like across the country. “Toronto and Vancouver tend to be big, key centers that newcomers want to go to,” Young said, noting that there are often existing communities in larger cities which can provide a sense of stability and security. But the average home price to income ratio is fourfold what it is in some other smaller cities across the country. Newcomers will be making that calculation.”
The longer-term picture may be brighter. Included in the 2022 Budget are several proposals by the Department of Finance to increase housing construction, support affordable housing and protect buyers and renters.
Canada on pause
Experts are warning of global recession, which begs the question of how newcomers and Canada as a whole might fare. According to Young, the outcome might not be as dire as in other parts of the world.
“We expect Canada to lead the pack over the course of the next couple quarters and in the next couple of years,” she said. “Canada has many more positives on the economic front than we think. It’s definitely going to feel the pains of a global slowdown. But we would categorize it in our best guess more as a pause – or a short and shallow slowdown – vs. a deep and prolonged contraction of the economy.”
Among the factors making the Canadian economy resilient, Young cited job markets, and noted that “there isn’t a better place to weather the downturn than in Canada.” She also underscored the value of well-governed and stable institutions that contribute to the resilience in the economy.
Between now and 2025, newcomers will bring Canada some much-needed relief to the desperate labour force, filling important jobs and taking some of the fiscal pressure off a nation that must now find resources for the care of a rapidly aging population. The influx of skills, ideas and entrepreneurialism will benefit employers across sectors, and promises to boost our economy on the world stage.
And these benefits aren’t temporary. The success of newcomers to Canada leads to the success of their children and to the country.
“There are long term dividends of newcomers coming, settling with family and ensuring that the second generation thrives and continues to revitalize the outlook for Canada,” Young said.
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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
