Canada’s population grew by 1.2 million people in the past 12 months. While this has positively impacted the labour market and economic growth, there are concerns about the negative effects on other parts of the economy. According to a recent study, a continued high-growth immigration strategy could lead to a housing shortfall of half a million units in just two years. Despite current government policies to accelerate construction, there may need more time to adjust the supply. Additionally, due to population growth, the neutral interest rate may need to be raised by 50 basis points. While the population surge can lead to higher profits, labour income, and tax revenues, policymakers must consider whether the economic and social infrastructures can handle the growth and how to integrate new Canadians into the workforce better.
