Introduction
Canada has witnessed a significant increase in its immigrant population over the years, with immigrants now comprising 23% of the country’s total population. This proportion is the highest since the country’s Confederation in 1867 and surpasses the previous record set in 1921.
Furthermore, population projections indicate that immigrants could make up anywhere from 29.1% to 34.0% of Canada’s population by 2041. In light of these statistics, it begs the question: Why is Canada accepting such a large number of immigrants? To understand this phenomenon, we need to examine Canada’s population trends and the economic impact of immigration.
Challenges Faced by Canada’s Population
Two crucial factors contribute to the growing prominence of immigration in Canada: the aging population and a low fertility rate. The number of children under the age of 15 is growing at a much slower pace compared to the population aged 65 and older. In fact, the percentage of individuals aged 65 and over in Canada has risen to 7 million, accounting for 19% of the total population. The aging population poses challenges to Canada’s labor market and has negative implications for the economy.
In addition to the aging population, Canada is experiencing a decline in its fertility rate. The current rate of 1.4 children per woman is below the population replacement level of 2.1 children. This downward trend in natural population growth is compounded by the lowest number of births since 2007 and a significant year-over-year decrease in births. These factors underline the urgency for Canada to address its demographic challenges.
The Role of Immigration in Canada’s Prosperity
Canada recognizes the need for immigration to fuel economic development and growth. A strong labor force is essential for driving national spending, consumption, and production of goods and services. Insufficient population growth and a weak labor force hamper productivity and hinder economic well-being. Therefore, Canada heavily relies on immigration to sustain population growth and bolster its labor force.
During the last census reporting period, nearly 80% of Canada’s population growth, equivalent to 1.8 million people, can be attributed to new immigrants. This immigration-driven growth has significantly benefited Canada’s labor force, with immigrants accounting for 79.9% of national workforce growth between 2016 and 2021. By addressing the historic employment shortage, immigration helps bridge the gap and promotes workforce productivity.
The Economic Impact of Immigration
According to economists, Canada’s current labor market circumstances have limited over half of Canadian businesses from increasing production. However, an influx of immigration has the potential to change this landscape.
By integrating newcomers’ skills into the Canadian workforce and actively utilizing their talent, Canada can enhance its workforce productivity. As immigrants become employed, earn money, and spend it within the country, Canada’s economy continues to flourish.
Moreover, increased immigration levels contribute to economic growth directly. As newcomers pay taxes and invest in housing, transportation, and other essentials, they inject money back into the economy. This increased economic activity benefits the entire nation and promotes a positive development trajectory for Canada.
Conclusion
Canada’s decision to accept a significant number of immigrants stems from the challenges posed by an aging population and a low fertility rate. To ensure sustained economic growth and prosperity, Canada needs a strong labor force that can support national spending and consumption.
By leveraging the benefits of immigration, Canada addresses its demographic concerns, strengthens its workforce, and propels economic development. As immigrants contribute to the labor market, earn income, and spend money, they play a crucial role in fostering Canada’s continued success and progress.
