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Canada’s immigration outlook and disruptors between 2020-2029

Canada Declining birth Rate Immigration will play a major role over the next decade

The past decade was among the most eventful in Canadian immigration history.

It saw a significant increase in Canada’s levels of permanent residents, international students, and foreign workers. The complete revamping of Canada’s economic class program was among other major transformations that also impacted the country’s family and refugee class programs.

It is expected that the coming decade will see more major changes given Canada’s unequivocal need for immigrants.

Canada set to welcome more than 3 million permanent residents over the coming decade

Canada’s aging population and the low birth rate is the main reason why we should expect the country to welcome even higher levels of immigration over the coming decade.

Canada’s population grows by roughly one percent each year. Natural increase (births subtracted by deaths) accounts for only 20 percent of annual population growth and immigration accounts for the other 80 percent. Within the next decade, natural increase is expected to fall to nearly zero, meaning immigration could comprise 100 percent of Canada’s population growth.

Population growth is important to stimulate the economic activity that is necessary to maintain Canada’s high quality of life. Hence, if Canada wants its population to continue to grow by one percent annually or more, it will need to gradually increase its newcomer levels from its target of 350,000 in 2021 to about 400,000 annually by the end of the decade.

All told, Canada looks poised to welcome roughly 3.5 million permanent residents over the coming decade—by far the highest intake in the country’s history. It would mark a 25 percent increase compared with some 2.8 million permanent residents it admitted over the last decade.

Local actors will have a greater role in selecting immigrants

Based on the rationale that provinces and employers have a strong understanding of local labor market requirements, Canada’s federal government has provided provinces, employers, and post-secondary institutions with a greater role in an immigrant selection over the past two decades.

This devolution of selection authority will likely continue moving forward.

Today, Canada’s provinces select around 40,000 principal applicants (PAs) annually—a figure that should grow to more than 50,000 PAs annually if the federal government increases immigration levels as expected.

Although Canada’s Constitution outlines immigration as an area of shared federal-provincial jurisdiction, municipalities are also playing a greater role in the immigration system since most immigrants land in cities. Municipalities will continue to advocate for a larger voice in immigrant selection, although this will be difficult to implement given how complicated Canada’s immigration system already is—the federal government and provinces collectively operate more than 80 available economic class pathways.

However, municipalities will likely have greater influence over selection through the forthcoming federal Municipal Nominee Program (MNP) as well as existing Provincial Nominee Program (PNP) streams —both of which are sensitive to the reality that providing cities with influence over selection is in fact important.

Quebec, Ontario and British Columbia poised to see their immigration shares decline

A greater role for local actors helps to promote the broader distribution of immigration and economic development across Canada.

Today, about 70 percent of immigrants go to Quebec, Ontario, and British Columbia, down from around 85 percent prior to the PNP’s launch.

The share of newcomers landing in these three provinces should decrease as other provinces continue to aggressively court global talent. For instance, Atlantic Canada has seen its national newcomer share rise from three percent a few years ago to five percent today, and it has room for more growth.

Moreover, Quebec has reduced its newcomer intake by 20 percent, meaning there are now 10,000 additional immigrants for distribution across Canada. Even if the province chooses to ramp up its immigration levels later this decade, they will likely still lag behind Canada’s rate of increase since Quebec prefers a more cautious approach to increasing its levels.

The recovery of global oil prices could also see Alberta’s immigration intake take off once again. The province’s economy and newcomer levels boomed leading up to the crash of global oil prices in 2014. Both have since tapered, but if oil prices improve, Alberta could easily surpass Quebec and British Columbia to become Canada’s second-leading destination of immigrants behind Ontario.

International students will help improve economic outcomes of newcomers

As Canada’s nine million baby boomers inch towards retirement, the country will have a significant need for new workers. There will be plenty of job opportunities available and Canadian-born workers and immigrants alike should benefit from these changes. We have already seen this manifest itself over the past decade as federal government data shows immigrants are enjoying stronger outcomes. Federal research also demonstrates that providing provinces, employers, and post-secondary institutions with a role in the selection process supports positive immigrant labor market performance.

Surveys indicate that half of Canada’s 600,000 international students indicate they wish to become permanent residents, meaning Canada is likely to see more of them become immigrants this decade. This will be a welcome development because international students fare very well in the labor market, and will become key drivers of economic growth since they will be workers and consumers in Canada for decades.

Canadian immigration will also be disrupted

Canada remains able to welcome high levels of newcomers due to strong public support for immigration. It must remain cognizant, however, of public sentiment towards newcomers as a rise in populism would certainly disrupt Canada’s ability to spur economic development through immigration.

However, the fact immigrants will comprise a greater share of Canada’s population over the coming decades may protect it from a rise in populism given that immigrants predominantly reside in Canada’s largest cities—which have the most political sway.

A decline in populist policies abroad could also disrupt Canada’s immigration system. Canada will face a competitive threat if western democracies such as Britain and the United States choose to reform their Economic Class programs to welcome more immigrants.

Increased prosperity in developing countries could also reduce the flow of immigrants and international students to Canada, and may also result in more competition. For example, China is making major investments in its education system and is now one of the world’s leading recipients of international students.

Finally, the changing nature of work will further complicate matters for Canada’s immigration system. Canadian stakeholders will have to grapple with numerous issues such as the value of assessing credentials even though some employers are moving away from screening credentials in their hiring processes, selecting immigrants in a fast-evolving labor market, and managing higher levels of temporary foreign workers due to globalization.

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