Skilled Immigration—Canada’s Ticket to Economic Prosperity and Demographic Stability

Why is Canada so keen on skilled immigration? While other countries treat immigration as an option, it is more of a compulsion for Canada. This is primarily because Canada’s pro-immigration policies are rooted in pragmatic economic and demographic factors.

Skilled immigration is key to Canada’s economic prosperity, and, unlike other countries, Canada has recognized and accepted it. This is why you should never make the mistake of thinking that Canada may roll back its immigration-friendly policies.

Here are four reasons why Canada will need even more skilled immigrants in the years ahead.

Population Growth and Economic Growth—Directly Linked

There is a direct link between growth in population and speed of economic growth in all the provinces of Canada. More working-age individuals means more candidates for employers, more tax revenue for government, and more overall economic growth due to more demand for goods and services.

Conversely, a falling population creates a vicious cycle where people and businesses move out for better opportunities and governments don’t have enough revenues to fund public and social projects.

All Canadian provinces showing steady economic growth have one aspect in common—immigration-friendly policies and steady growth in population of working-age persons.

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Tackling Inequal Distribution of Population

Close to half of all immigrants entering Canada choose to settle in Ontario. The top three—Ontario, Quebec, and British Columbia account for a significant proportion of all immigrants, especially skilled immigrants, entering the country.

Since economic growth is directly linked to population growth, this trend obviously results in concentration of economic growth in two or three provinces only. This was one of the key reasons why the Atlantic Immigration Pilot (now permanent) Program was created.

Smaller provinces are relying more and more on liberal immigration programs to attract young students and skilled workers. This trend is unlikely to change anytime soon considering there is significant inequality in distribution of economic growth across different provinces of Canada.

The Pandemic Impact—High Interest Rates

The Covid-19 pandemic forced governments across the world to reduce interest rates and print more money. High public debt has always been an issue in Canada and the pandemic has only made the problem worse.

Just before the pandemic, public debt in Canada stood at around $525 billion. Two years of high-liquidity policies has resulted in this debt rising to $1.3 trillion and will continue to climb until 2026-27.

The pandemic is under control, which means central banks across the world have started hiking interest rates. And how is this connected to immigration?

Going ahead, the only way countries, including Canada, can avoid the problem of high and expensive public debt is by boosting tax revenues and reducing debt. This means Canada must improve its debt-to-GDP ratio.

Clearly, this cannot be possible in Canada unless there is steady and sustained increase in the working-age population. Since more than 80 percent of Canada’s population growth is because of immigration, the Federal and provincial governments of Canada just don’t have the option of cutting down on immigration in the years or even decades ahead.

The Pandemic Impact—Shortage of Workers

One enduring memory of the Covid-19 pandemic will be the way Canadian businesses struggled to find skilled workers once the pandemic ended and reopening began.

Businesses in labor-intensive sectors like hospitality and tourism were forced to turn down customers because there simply weren’t enough applicants for the vacant positions. Employers were forced to agree to unsustainably high wages and joining bonuses to convince candidates to join.

All this has clearly shown that Canada cannot afford to take the pedal off when it comes to immigration. Despite allowing thousands of temporary workers to become permanent residents during the pandemic, Canada still ended up with shortage of skilled candidates.

With other countries too waking up to the importance of having immigration-friendly policies, the years ahead will see more and more opportunities for foreign workers and international students to work and settle in Canada.

And how can you benefit from this? If you are a skilled worker, then you should obviously be preparing for the restart of Express Entry draws for Federal Skilled Worker Program applicants. If you are a young student, then you should seriously explore your Canada study options.

And if you are a temporary worker in Canada, then you should keep in mind that this is probably your best opportunity to transition to permanent residence without any hassles or complications.

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