Canada needs around 350 000 new immigrants per year in order to maintain its current economic growth
A recent report issued by the Toronto Dominion Bank states that Canada will need around 350 000 new immigrants per year after 2016. The main reason for this is the ageing labour force of the country, which will not be able to sustain enough economic growth in the future.
Every year during the past two decades Canada has given permanent residence status to amount of people which is equal to around 0,8% of its population. This, however, is not enough to maintain adequate size and growth in the labour force, since the generation of the baby-boomers now starts to retire.
This may create negative consequences for many Canadian businesses if they are not able to find the skilled workers that they need. As a result of this, the Canadian economy might not be able to maintain its traditional growth. The research, however, points out that the declining labour force is only one of the factors, which the Canadian Government should consider when creating its immigration policy.
In addition to the size of the workforce, labour productivity is the other determinant of economic growth. Currently, the unemployment rates among immigrants are higher than among Canadians, although on average they are better qualified. If this tendency continues, an eventual increase in immigration may also increase unemployment and not the working output.
The research of the Toronto Dominion Bank hopes that the recent change in the Federal Skilled Worker Program may increase the employment and therefore the productivity among the immigrants. If this happens, the Canadian economy may retain its current growth without the need for bringing in more immigrants than the current number of 250 000 per year.