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HomeEditorialImmigrants Drive Canada’s Economy

Immigrants Drive Canada’s Economy

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Myth: Immigrants are a burden on the Canadian economy.
Fact: Immigrants make the Canadian economy thrive.

Immigrants create jobs, help to drive economic growth.
Immigrants’ settlement fund boosts the Canadian economy.

Contrary to public opinion, mostly driven by ignorance of bias, federal officials are convinced of the social, economic, and labour-market benefits of high immigration levels.

According to canada.ca, Canada requires every skilled immigrant to come into Canada with enough money to settle here. The minimum required amount is $12,960 for a primary applicant with one additional family member. While a family of seven is required to have $34,299 as minimum fund.

The amount when calculated in multiples is staggering.

Statista.com reveals that the current annual immigration in Canada amounts to around 300,000 new immigrants, one of the highest rates per population of any country in the world. Multiply that figure by the corresponding amount of money that immigrants bring into the country as settlement fund, and you will have a fair understanding of what immigration does to our economy in Canada. The multiplier effect is felt on the housing economy, education and other aspects of the economy.

Another perspective to this is, the strength of Canada’s economy is measured in part by the number of people working (known as the labour force) and paying taxes to fund our public services, such as health care.

Thanks to immigration, Canada’s labour force continues to grow at a certain percentage every year. If it weren’t for immigrants, employers would have trouble finding enough qualified workers to fill available jobs. This is because Canadians are living longer and having fewer children. By extension, more people are retiring, and there are fewer students in schools. As a result, the pool of Canadian-born existing and potential workers is limited.

Immigrants contribute to our economy, not only by filling gaps in our labour force and paying taxes, but also by spending money on goods, housing and transportation.

The long- and short-term benefits of maintaining high immigration levels are clear. In the long term, immigration fuels economic growth, improves our ratio of working-age Canadians to retirees, creates more tax revenue, and supplies mostly skilled and a fair size of unskilled labour to key sectors. Economic and population modelling by the Conference Board of Canada demonstrates that more immigration benefits the economy.

There are differing views as well. Canada is one of the top western countries that accepts most immigrants per capita with the country ranking 40th in terms of immigrants as a percent of the population. One of the arguments against immigration is that, experts have said that historically, mass immigration has had a null effect on GDP. Equally in 2020, from an economic perspective, Macleans described Canada’s higher immigration numbers for increasing the country’s GDP as “window dressing a struggling economy” due to the decreasing GDP per capita. Compared with other countries that have an immigration policy, Canada’s GDP per capita in 2020 ranked at 18th, less than that of the United States’ GDP per capita that was at fifth place, and that of Australia’s at 10th place. New Zealand which was at 23rd place changed its immigration policy, stating they will focus more on “training people already in the country.”

The economic impact of immigration is an important topic in Canada. The two conflicting narratives on immigration, that exist in Canada have two arrowheads – one of politicians, that higher immigration levels help to increase economy (GDP) and the other of economists, that say it decreases GDP per capita (or living standards for the resident population) and that it leads to diseconomies of scale in terms of overcrowding of hospitals, schools and recreational facilities, deteriorating environment, increase in cost of services, increase in cost of housing, etc. However, economists also concur with politicians about the increase in GDP, but they don’t consider it to be an effective metric for immigration.

One interesting fact is, the per capita immigration rate to Canada has been relatively constant since the 1950s, and in the first and second decades of the 21st century, there was a steady increase in the education and skill level of immigrants to Canada due to the focus on higher average productivity-based applicants and thus immigrants to Canada on average were better educated than Canadians. This trend was enhanced in the third decade of the 21st century by opening low-skilled immigrant pathways that only required minimal scores for immigration to achieve a target of 400,000 immigrants per year.

Another often overlooked factor is that many immigrants are successful entrepreneurs who continue to build vibrant businesses and pay taxes regularly.

In a 2016 report titled, ” New Canadian Entrepreneurs – An Underappreciated Contribution to Canadian Prosperity, the 6 Degrees-CIGI stated:

“The businesses owned by immigrant entrepreneurs range from small-scale businesses on Main Street to the corporate giants on Bay Street. It may come as a surprise that Canada’s list of wealthiest individuals includes many immigrants who started business in Canada. Corporations such as Magna International, BlackBerry, Saputo, Larco and Shopify, to mention a few, were started by immigrants in Canada, and are now among the largest employers and generators of wealth in the country.”

Immigrants do not just bring multiculturalism and diversity to Canada, they also bring their entrepreneurial prowess here. More immigrants than native-born Canadians are entrepreneurs, who aren’t just struggling but are thriving.

Immigration will continue to be a key driver in advancing Canada’s economy, especially in the context of the nation’s low birth rates and its vital role in growing the working-age population, and it will remain so into the future.

The Immigrant Life is the community of and for immigrants. Join us as we expand and create a vibrant space for understanding. Let’s be the change makers that Canada needs.

By The Editorial Board.

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