Late last week, Canada’s immigration minister, Ahmed Hussen, announced a big increase in Canada’s immigration program, with some one million migrants to be let in over the next three years, with a 300,000 migrant intake now considered the “new normal”. From CNBC:
The number of economic migrants, family reunifications and refugees will climb to 310,000 in 2018, up from 300,000 this year. That number will rise to 330,000 in 2019 then 340,000 in 2020…
Hussen said the new targets will bring Canada’s immigration to nearly one per cent of the population by 2020, which will help offset an aging demographic. He called it a historic and responsible plan and “the most ambitious” in recent history.
“Our government believes that newcomers play a vital role in our society,” Hussen said. “Five million Canadians are set to retire by 2035 and we have fewer people working to support seniors and retirees”…
In 1971 there were 6.6 people of working age for each senior, Hussen said, but by 2012 that ratio had gone to 4.2 to 1 and projections show it will be at 2 to 1 by 2036, when almost 100 per cent of population growth will be a result of immigration; it stands at about 75 per cent today.
Hussen said immigration drives innovation and strengthens the economy, rejecting some claims that newcomers drain Canada’s resources and become a burden on society.
He said the government is also working to reduce backlogs and speed up the processing of applications in order to reunite families and speed up citizenship applications.
The federal government’s own Advisory Council on Economic Growth had recommended upping levels to reach 450,000 newcomers annually by 2021. Hussen said the government is taking a more gradual approach to ensure successful integration…
Dory Jade, the CEO of the Canadian Association of Professional Immigration Consultants, welcomed the news although he suggested the numbers should be higher.
“Canada will greatly prosper and grow once the 350,000 threshold has been crossed,” he said. “Nevertheless, we are witnessing a very positive trend”…
Upping the immigration intake to counter an ageing population is ‘ponzi demography’ writ large. It amounts to nothing more than ‘kicking the can down the road’ since migrants also age. What will be the Canadian Government’s solution be in 30 years time when this new batch of migrants reaches retirement age and adds to the growing ageing population? An annual migrant intake of 600,000 and a Canada with 50+ million people?
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Rising artificial intelligence and automation also counters concerns about not having enough workers to sustain the economy. In reality, Canada (and other nations) are likely to have surplus labour in the future.
Canada’s biggest housing markets are already among the most expensive in the world, with Vancouver (11.8 times incomes) ranked third most expensive in this year’s Demographia International housing affordability survey and Toronto (7.7 times incomes) also highly unaffordable:
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Piling hundreds of thousands more migrants into these cities will only exacerbate Canada’s housing affordability problem to the detriment of young Canadians, in addition to worsening congestion, putting more strain on Canada’s natural environment, and reducing liveability overall. But then, supporting the bubble is what this is all about.
Thankfully, there are some vocal critics of the Canadian Government’s Ponzi-nomics:
Gilles Paquet, an author and economics professor emeritus at the University of Ottawa, said with more than one in five now born outside the country, immigrants have become a political force so strong that it’s become taboo to talk about possible limits.
“It’s not even a debate anymore. There are too many people voting and if you were to do something that looked like trying to limit the flow of new immigrants, you would antagonize all those who want to bring in their parents, their grandparents … so therefore nobody will do it,” he said.
He believes an immigration intake of 300,000 or more is “mindless,” arguing that Canada does not have the capacity to adequately help them transition with services and supports.
The result, he says, is growing frustration, marginalization and a number of cultural “enclaves” across the country that will lead to increased public tensions and problems down the road.
Herb Grubel, professor emeritus of economics at Simon Fraser University and a former Reform Party MP, rejects the argument that increased immigration is necessary to offset an aging population.
“Whether it’s for pension purposes or maintaining the size of the labour force, these people are aging as well after they have arrived,” he said.
Increased immigration levels are putting too much pressure on the demand for housing, road space and recreational facilities, where demand has outpaced supply in some cities like Vancouver.
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Canada’s growth lobby is licking its lips at all the extra consumers and home buyers that will flood into the country. But it will be the ordinary Canadian’s living standards that will be harmed by this folly.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
