Many experts claim that increased immigration may be a factor keeping inflation high. Despite a fall in the inflation rate, prices for many essential goods continue to rise. The Bank of Canada raised interest rates to 5% in July due to sticky inflation, but the economy and demand continue to grow. The bank expects inflation to reach its 2% target by mid-2025, and immigration could keep inflation up longer. Canada welcomed over a million immigrants last year to address job vacancies and labour shortages. However, according to the Bank of Canada governor Tiff Macklem, the impact of immigration on inflation is expected to be neutral. Still, it is affecting different parts of the economy in various ways.
