Report Highlights Need for Higher Immigration to Sustain Canada’s Population and Labor Market
A recent analysis by RBC emphasizes the necessity for Canada to elevate its immigration intake to maintain the nation’s demographic structure and fulfill the requirements of its labor market. This recommendation comes in the wake of the Canadian government’s announcement on November 1, regarding the Immigration Levels Plan for 2024-2026, which plans to maintain immigration targets at 500,000 annually for both 2025 and 2026.
The Imperative for Increased Immigration
Canada’s dependency on immigration is driven by its aging population and low birth rate, challenges that are not unique to Canada but are particularly acute given the country’s inability to naturally replenish its working-age population. Immigration serves as a critical strategy to augment Canada’s demographic shortfall, especially vital for supporting its robust economy, which ranks as the ninth-largest globally by Gross Domestic Product (GDP).
Rationale Behind Raising Immigration Levels
The core argument of the RBC report is that the current immigration quotas fall short of what is required for Canada to sustainably address future labor market demands. To match the labor needs prompted by economic expansion, the report posits that Canada must reach an annual immigration rate of 2.1% of its existing population. This implies that to counterbalance the declining natural population growth, immigration numbers would need to see an annual increase by over 300,000.
The RBC report strongly suggests that without a significant uptick in immigration levels, Canada may struggle to meet its labor market needs, stimulate economic growth, and uphold the funding and functionality of essential services such as healthcare, infrastructure development, including housing, and other societal institutions.
