Recent analysis suggests that Canada’s rapid population growth, primarily driven by immigration, may be contributing to the country’s declining productivity. While Canada leads the G7 in population growth, with a 3.2% increase in 2023, its productivity has fallen below mid-2022. The influx of immigrants, particularly non-permanent residents, has outpaced the growth of Canada’s capital stock, resulting in a lower capital-labour ratio. This imbalance and the time it takes for new immigrants to reach wage parity with Canadian-born workers could hamper overall productivity growth. As Canada grapples with this economic challenge, questions arise about the long-term sustainability of current immigration levels and their impact on the country’s standard of living.
