FIRST READING: Trudeau government already missing targets on pledge to bring down immigration

Annual changes in chart below. Monthly data indicates that change is happening:

In October, Prime Minister Justin Trudeau announced a suite of new controls on immigration designed to “pause population growth.” In a video at the time, Trudeau even expressed regret that he hadn’t curbed immigration sooner, saying, “We could have acted quicker and turned off the taps faster.”

Although admissions of international students have gone down dramatically in the interim four months, a new analysis by Desjardins finds that Canada is still accepting roughly the same amount of temporary foreign workers and permanent immigrants.

As such, the report said that Canadian population growth is about the same as it was before the October cuts, and isn’t likely to change without “more aggressive reductions.”

“We remain skeptical that the Government of Canada will be able to reach its (lower) target for admissions of newcomers,” it read.

Desjardins added that the Trudeau government often seems to make promises that it fails to fulfill, and that immigration reduction is a prime candidate for this.

Source: FIRST READING: Trudeau government already missing targets on pledge to bring down immigration

Amid growing dissent, will Canada change its immigration plans?

Good overview, largely from the more pro-current approach side, as we await the levels plan release:

Canada is set to unveil the latest targets for how many new residents it hopes to welcome in the coming years.

The annual announcement of permanent resident levels, something Immigration Minister Marc Miller must do in Parliament on or before Nov. 1, is the kind of dry fare that has traditionally drawn little attention, serving largely as a governmental formality amid high levels of public support for immigration.

But this year’s numbers are expected to face more scrutiny given a surging discussion of whether Canada has the capacity and the infrastructure it needs to accommodate the hundreds of thousands of newcomers it is bringing in.

{{tncms-inline displaytitle=”Immigration drives Canada’s population to 40M” embedid=”ba479a79-f163-4cc5-97a2-74273de44cbb” linktodownloadthumbnail=”https://oovvuu-thumbnails-prod.imgix.net/48/80128685-73f5-4883-bd94-3b3795f23f29.jpg?h=200&w=300″ playerscripturl=”https://playback.oovvuu.media/player/v2/index.js” type=”oovvuu”}}

And, as the government seeks to maintain public support for immigration, some say how Prime Minister Justin Trudeau’s Liberals approach immigration — and the messaging around it — will be key.

The government’s current immigration plan, unveiled in 2022, aimed to bring in 465,000 new permanent residents this year, 485,000 in 2024 and 500,000 in 2025. The immigration ministry is on track to meet the 2023 target.

The upcoming plan, however, will look at the numbers for the next three years.

Recent polls suggest that Canadians’ appetite for more immigration may be waning. A Nanos report in September showed 53 per cent of Canadians wanted Ottawa to accept fewer immigrants, up from 34 per cent in a similar poll in March. Then, an online survey by Research Co. in October found 38 per cent of Canadians said they believe immigration is having a mostly negative effect, up 12 percentage points from research conducted a year ago.

“Some people are feeling there’s too much immigration, when it comes to the fact that it’s driving up the housing cost, exacerbating the housing shortage, making the connection between immigration and health care and education,” says Toronto Metropolitan University professor Rupa Banerjee, whose research focuses on immigrant employment integration.

“Immigration is on people’s radar more and the plan will be scrutinized a lot more closely.”

So far, the government has seemed inclined to stay the course.

“I don’t see a world in which we lower it, the need is too great,” Miller told Bloomberg in August. “Whether we revise them upwards or not is something that I have to look at.”

Magdalene Cooman of the Conference Board of Canada said Canadians need to understand the immigration plan’s long-term objectives are to address the country’s aging population and boost economic growth.

While immigrants do need housing, health care and other government services, she said, people shouldn’t lose sight of the fact that newcomers are also part of the solutions to those challenges, and contribute to the workforce, whether it’s by building new homes or caring for those in hospitals.

“There is a reason why the federal government has moved in this direction,” said Cooman, the board’s interim associate director in charge of immigration research.

“Immigration is really the only way to increase population, to support population growth and to support the future of Canada.”

A recent report by Desjardins said the country’s working-age population (those 15 to 64) would need to grow by just over two per cent annually in order to offset the impacts of aging. That growth relies largely on immigration.

“What’s the optimal level of immigration to Canada? This can be a tough question to answer, as ‘optimal’ is in the eye of the beholder,” said the report. “It depends on the policy objective that immigration is meant to achieve.”

While the short-term strains of the population growth are already showing, the report suggested the federal government could restrict the admission of non-permanent residents such as international students and temporary foreign workers.

Despite the lagging infrastructure, the conference board’s Cooman warned that any pause to the long-term immigration strategy could create other unintended problems.

“I’m not opposed to increasing the levels because I understand the long-term growth strategy,” said Cooman. “But I am opposed to increasing the levels without a strategy to show us how all the infrastructure can be built to accommodate more people in the country. You can’t have one without the other.”

Whom Canada brings in matters, observers say.

Permanent residents come to Canada under the economic, family or humanitarian classes. In 2023, about 58 per cent of them will have been selected based on their education backgrounds and skills; 23 per cent through sponsorships by spouses or children and grandchildren; and the rest as resettled refugees and protected persons.

Using real wages as a proxy for relative productivity of different groups, the Desjardins report said economic immigrants in particular are outperforming the typical Canadian.

Several observers credit the immigration ministry with fine-tuning the way it selects economic immigrants by better matching the skills of candidates with the labour market needs, and targeting those with backgrounds in health care, transportation, trades, agriculture and STEM occupations. Officials, for instance, have relaxed some rules for immigrant physicians and created a special immigrant class to attract workers in construction-related trades.

To immigration lawyer Betsy Kane, the bigger challenge for Miller is to overcome the public backlash and explain his immigration strategy.

“Between the home construction effort and the easing of the doctor efforts, you’re potentially reducing the lag in public opinion,” said Kane, vice-president of the Canadian Immigration Lawyers Association.

Banerjee of TMU said the government has to be more specific in explaining the immigration plan than just floating the big numbers around.

“We are bringing in trades and transport workers and there’s a number of pilots now that are working to try and bring people into underserviced smaller and rural communities. Many of them are very small (scaled), but there’s been efforts,” said Banerjee.

“A lot of that is lost, because all we see in the headlines is ‘500,000 newcomers being admitted.’”

In August, a CIBC study found there were about one million more people living in Canada than official government estimates, including international students, foreign workers, asylum seekers and undocumented migrants. (Unlike permanent residents, temporary residents are uncapped and not included in the immigration plan.)

“We need to make sure these immigration targets also include temporary migration numbers. We cannot have uncapped temporary migration and then pretend that is all of the immigration,” said Banerjee.

In a letter to Miller this month, the Business Council of Canada urged the government to prioritize highly skilled economic-class immigrants to fill high-paying jobs, and raise the ratio of the economic immigrants in the mix from 60 per cent to 65 per cent by 2025.

While the number of job vacancies requiring lower levels of skill and education has declined significantly, the council said unfilled job openings for highly trained and educated professionals remain stubbornly high.

“Enhanced economic immigration is essential,” wrote Goldy Hyder, president and CEO of the council, whose member companies support more than six million jobs across Canada. “If we do not seek this skilled labour, our economic rivals will.”

But employers aren’t the only group that would like to get a bigger piece of the permanent-resident pie.

Advocates for refugees are urging Ottawa to raise the levels of resettled refugees up from about 10 per cent to 15 per cent to accommodate the growing number of displaced migrants around the world, which now stands at 108 million.

“If we are able to increase Canada’s resettlement targets, it would support the reduction of the backlog,” said Gauri Sreenivasan of the Canadian Council for Refugees, adding that a recent government audit showed 99,000 refugees were waiting in the queue by December 2022.

NDP immigration critic Jenny Kwan said she’s concerned about the backlash against the immigrant community.

“No good will come out of that because we have already lived through racism and discrimination in Canada’s history,” she said. “The government has to have a housing plan and an infrastructure plan for our community.”

Tom Kmiec, the Conservative immigration critic, did not respond to the Star’s requests for comment. This summer, his party leader, Pierre Poilievre, did say the immigration system is broken, but sidestepped reporters’ questions about whether he would change the current targets.

Source: Amid growing dissent, will Canada change its immigration plans?

Veal: Amid Canada’s housing crisis, immigration needs to be slower, more focused 

Yet more questioning:

High expected immigration is the main reason that Canada’s total output will likely increase by 1.5 per cent annually in 2023 and 2024, according to the headline numbers from the International Monetary Fund World Economic Outlook. That would be the highest in the Group of Seven.

But that document also includes the predicted changes in output per person. That is a better measure of the change in the average standard of living, as it adjusts for Canada’s high population growth. The 2023 and 2024 predictions for the country are –0.6 and 0.1, a cumulative decrease over the two years. That’s the worst performance in the G7.

Part of this has to do with the lack of investment to complement the inflow of people. The most obvious symptom is Canada’s housing crisis.

The writer, Max Frisch, famously commented on European guest worker immigration: “We wanted workers, but people came.” People need homes, and Canada doesn’t have enough of them – even for its resident population. The high prices from the resultant high demand weigh heavily on the economy. While we wait for housing progress, this country needs slower and more focused immigration.

Immigration in general can be good for the economy. The fact that per capita GDP is expected to decline amid heavy immigration doesn’t mean that those already in Canada will on average be worse off; a good part of the reduction in that metric is due to low-income migrants bringing down the average.

Many of us already here will likely be made better off through the contributions of the newcomers. This is particularly clear in the caring and agricultural sectors. And in the long-term, while it is less clear at higher levels, immigration may bring important macroeconomic advantages. Immigrants can bring new ideas and entrepreneurship.

Moreover, Desjardins economist Randall Bartlett finds that these very high rates of immigration are the only way to prevent large increases in the proportion of the population that is 65 and over. Permanent immigrant families will also help share the national debt, especially as they experience increases in productivity and income.

But, as experts such as Mr. Bartlett have pointed out, high immigration is only sustainable if something can be done about housing, and this is not easy.

In the short term, the housing crisis cannot be solved – it can only be mitigated. Building new housing takes time. In the meantime, reducing immigration temporarily to prepandemic levels would help. Those levels would still provide ample room for home construction workers if necessary, as well as other high-skilled workers in strategic areas.

In principle, the current permanent immigration target could still be met with the reductions coming from the temporary side. For example, the student visa program could be limited with allocations used to incentivize educational institutions and their municipalities to do more on housing.

In the medium term, a solution requires more than doubling the inflow of housing units – Herculean even without the headwind of higher interest rates. It is no coincidence that federal cabinet minister Sean Fraser was recently shuffled from the immigration portfolio to housing.

But it is a three-levels-of-government problem, and municipalities do not face the same urgency from the aging population. In communities where most voters own rather than rent housing, the net political pressures may be against permitting increases in housing supply that might dampen housing prices.

Broader resistance to increased immigration will almost surely come. The brunt of unaffordable rents is borne by those with lower incomes. These are largely the same individuals who may be losing out on the higher wages, the greater flexibility in work arrangements, and the benefits of productivity-increasing capital and training that employers might turn to were there not the alternative options of hiring recent immigrants or accessing the Temporary Foreign Worker program.

But none of this is the fault of those who move here, and nothing changes the ultimate economic benefits of immigration. Canada must cherish immigrants, helping them settle as much as possible – but we need some breathing space to be able to do so properly.

Michael Veall is a professor of economics at McMaster University.

Source: Amid Canada’s housing crisis, immigration needs to be slower, more focused

As immigration debate rages on, new report makes the case for more newcomers

Odd report, at odds with most labour economists in terms of impact on per capita GDP:

At a time when skeptics are questioning Canada’s plan to ramp up immigration, a new report argues the country needs to welcome a lot more newcomers to counter-balance its aging demographic.

A Desjardins report released Monday analyzes how much population growth among working-age Canadians is necessary to maintain the old-age dependency ratio, which refers to the ratio between 15 to 64-year-olds and those aged 65 and older.

It finds that the working-age population would have to grow by 2.2 per cent per year through 2040 to maintain the same ratio that existed in 2022.

And if the country wanted to go back to the average old-age dependency ratio it had between 1990 and 2015, that group of Canadians would have to grow by 4.5 per cent annually.

“I feel like the discussion around immigration levels in Canada, by and large, focuses on the immediate impact on the Canadian housing market,” said Randall Bartlett, Desjardins’ senior director of Canadian economics.

“And so what I wanted to do was sort of zoom out and provide some broader economic context around immigration and why immigration to Canada is important.”

The prospective ramp-up of immigration levels has sparked debate on whether the country can handle higher flows of newcomers amid a housing crisis, and what the total economic impact of having more people in the country would be.

Canada’s population grew by more than one million people last year, a record for the country. Its total population grew by 2.7 per cent, the fastest rate since 1957.

The strong population growth comes as the Liberal government eyes higher annual immigration targets, which would see the country welcome 500,000 immigrants per year by 2025.

Proponents of higher immigration argue that the labour market is able to absorb more workers, and the country needs more working-age Canadians to support the tax base as more people retire.

“We need immigration at a relatively high rate, actually, in order to offset the economic impacts of aging — to be able to pay for the health care that Canadian seniors are going to need,” Bartlett said.

A recent Desjardins analysis finds Canada’s plan to increase immigration could boost gross domestic product per capita if newcomers continue to have the same success getting work that they’ve enjoyed recently.

GDP per capita is the size of a country’s economy divided by its population. Many consider it to be a better measure of a country’s living standards than the overall GDP figure.

The employment outcomes of recent immigrants, particularly those brought in through the economic stream, have improved compared to those of previous cohorts. That’s in part because of changes to federal immigration policy.

In 2018, the median wage of economic immigrant principal applicants surpassed that of the Canadian population by the time they had been in the country for one year, according to Statistics Canada.

“We’re bringing in very, very talented people,” Bartlett said. They are able to find jobs and “generate earnings very quickly that are outpacing the Canadian average,” he added.

But critics argue that relying on immigration to supply workers for the economy can also serve as a disincentive for businesses to invest in technology that would boost labour productivity and reduce dependency on workers.

Bartlett said the federal government could modulate the flow of temporary foreign workers so as to encourage such investments.

But he conceded that housing serves as a major hurdle.

Desjardins estimates the country would need to build 100,000 more units every year to offset upward price pressures caused by having a higher number of permanent residents in the country.

A recent analysis by BMO found that for every one per cent of population growth, housing prices typically increase by three per cent.

The influx of newcomers into the country is already having an effect on the housing market, which rebounded this year despite interest rates being at their highest level in decades.

At its last interest rate decision, the Bank of Canada flagged population growth’s effect on housing prices as one of the factors feeding into inflation.

“Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing,” the central bank said in a press release on its latest rate hike.

Bartlett warned the erosion of housing affordability amid record population growth could damage public support for immigration and warrants swift action from government.

“There’s a risk Canadians could become less open and less positive… toward immigration,” Bartlett said.

“If that leads to scaling back immigration in a meaningful way, then that means Canadians are gonna be facing a significant bill going forward to meet the the aging costs of older Canadians.”

Source: As immigration debate rages on, new report makes the case for more newcomers

A surge of temporary residents is boosting demand for homes in supply-starved market 

More on immigration and housing:

A record-setting influx of temporary residents is putting additional strain on the Canadian housing market, just as the construction industry is pulling back on new builds.

By the end of 2022 there were roughly 1.95 million people from abroad with temporary work or study permits in the country, an increase of about 560,000 (40 per cent) over the previous year, according to recently published figures from Immigration, Refugees and Citizenship Canada.

The International Mobility Program accounted for slightly more than one million of those permits – a new high, up more than 300,000 in a year. The program covers a broad group of people, including the spouses of skilled workers and company transfers from foreign offices.

There were slightly more than 800,000 study permit holders at the end of last year, also a record high. Another 120,000 people held permits under the Temporary Foreign Worker (TFW) Program, the most since at least 2000.

Canada is deliberately raising its intake of immigrants, with the goal of admitting 500,000 permanent residents annually by 2025. However, that reflects just a portion of newcomers to the country.

Based on the latest estimates, in the third quarter of 2022 Canada’s population grew at its quickest pace in more than 50 years, mostly because of the increase in temporary residents. Their ranks grew by more than 225,000 during the three-month period, well above the previous record. Many of them aspire to stay in Canada permanently.

Experts say the country is increasingly moving to a two-step immigration process, in which people come for an education or work experience, then apply for permanent resident status.

In recent months, the federal government has been criticized for its immigration policies, particularly when the country is struggling to build enough homes and deliver basic medical services.

It has become “an unplanned, unmanaged, improvised immigration system,” said Anne Michèle Meggs, a former director of planning and accountability at Quebec’s Immigration Ministry. “Who is this helping?”

To some degree, special circumstances have contributed to the population surge. Canada has been admitting thousands of people fleeing Ukraine since the Russian invasion, and there has been a forceful rebound in the number of international students, many of whom delayed their studies here during the acute phases of the pandemic.

Still, the spike in temporary residents over the past year was “driven” by people with work permits, Statistics Canada said in its latest population report.

The federal government is courting more foreign workers, broadening access to low-wage workers through the TFW program and allowing foreign students to work longer hours – moves that it says are aimed at easing labour shortages.

Several economists have criticized Ottawa for flooding the market with cheap labour and suppressing wages.

Meanwhile, colleges and universities have dramatically increased the enrolment of foreign students, who pay significantly more in tuition than their domestic peers. There are no limits on this form of migration.

Many newcomers are discovering that homes in Canada are both pricey and in short supply.

A report by Desjardins Securities published this week said residential home construction would need to immediately increase by 50 per cent through the end of 2024 in order to support higher immigration targets and keep prices from climbing further.

It does not appear that will happen. Facing steep costs and higher interest rates, some developers are cancelling or delaying projects. Earlier this week, Canada Mortgage and Housing Corp. reported that housing starts fell 13 per cent in January from December, to an annualized pace of about 215,000 units.

In parts of Ontario with a population of 10,000 and higher, housing starts fell 31 per cent to an annual rate of roughly 71,500 units. That is well below the provincial government’s target of building 150,000 units a year for the next decade to alleviate the housing crisis.

“It certainly makes sense that building activity would be cooling amid a steep drop in sales and prices,” Bank of Montreal chief economist Doug Porter said in a note to clients, referencing the recent slump in real estate activity amid higher borrowing costs.“Notwithstanding the broad and wide calls for the need for massive increases in new home construction in Canada, the reality is that starts are dictated by the market, and not by pundits.”

Source: A surge of temporary residents is boosting demand for homes in supply-starved market

Canada needs to boost home building by 50 per cent to keep up with immigration, report says

Yet another study highlighting some of the implications and impacts of Canada’s high level of immigration:

Canada needs to ramp up home building by 50 per cent just to keep pace with immigration, according to a new report.

The country is on track to break ground on about 210,000 housing units this year, according to Desjardins Securities. But the Desjardins report says about 100,000 additional housing starts are needed this year and next, as Canada gets ready to admit a record number of immigrants.

Many economists and real estate industry experts believe there is a severe shortage of housing in the country – and it will only get worse. Canada has increased immigration levels to make up for the shortfall during the first year of the pandemic and to help fill jobs in construction, health care and other areas.

With the federal government planning to admit 1.45 million new permanent residents over the next three years, the report says, housing starts must become a priority, in part because of the time it takes to complete a housing unit.

“We have to dig out of a hole and move higher ultimately,” said Randall Bartlett, Desjardins’ senior director of Canadian economics.

A large share of new immigrants end up in Ontario and B.C., two provinces where home prices have historically risen faster than in the rest of the country.

Although the typical home price across Canada dropped 13 per cent from the peak last February by December, the average price in the most popular destinations – Toronto and Vancouver – still tops $1-million.

“If these newcomers to Canada continue the recent trend of moving to Ontario and British Columbia, affordability there and nationally will erode further,” says the report, authored by Mr. Bartlett and Marc Desormeaux, the bank’s principal economist.

At the same time, rental rates have been quickly increasing as many would-be homebuyers have had to continue renting owing to higher mortgage rates.

Desjardins’s call for more home construction echoes statements from the national housing agency, Canada Mortgage and Housing Corp., which has repeatedly said the country needs to increase its supply of homes.

Source: Canada needs to boost home building by 50 per cent to keep up with immigration, report says