Policymakers should be prepared for a ‘new reality’ after immigration cuts, think tank warns

Good note on how to interpret the study in this note of caution to immigration advocates:

…The think tank’s report warns that any misinterpretation of the data could lead to counterproductive stimulus, such as unnecessary interest rate cuts or new spending. 

“There’s concern that they won’t recognize that that’s the new reality,” said Don Drummond, a former senior executive at the Department of Finance and now a fellow-in-residence with C.D. Howe.  

Drummond said the recent cuts to immigration and temporary foreign worker levels were the right calls because Canada didn’t have the housing or health-care capacity to support the previous levels. The challenge, he added, is to understand that the new, lower levels will automatically have an effect on other statistics that are in part a reflection of population changes. 

The new report forecasts that total Canadian employment will decline this year and next and that inflation-adjusted economic growth will be between 0.4 and 0.5 per cent in the near term. It also forecasts that employment will fall by 54,000 this year and another 17,000 in 2027, assuming that the economy is neither overheated nor lacking demand. 

But those middling numbers are in part a function of demographic changes. “The risk is not poor performance,” the report stated, “but misinterpretation.”….

Source: Policymakers should be prepared for a ‘new reality’ after immigration cuts, think tank warns