January, 18 2023 / Insight from Angus Watt, Senior Wealth Advisor
Canada is at a crossroads.
There are more Canadians aged 55-64 than those between 15 and 24. Our country’s worker-to-retiree ratio is expected to shift from a high in the 1970s of 7:1 to 2:1 by 2035. Baby Boomers are getting to retirement age and our birthrate has fallen to a record low (1.4 children per woman in 2020) and is well below the 2.1 rate needed to maintain a population without immigration.
This is a generational change… and a generational challenge… to our quality of life and economy.
In recent months, I have been talking with groups about one way to mitigate this generational challenge – immigration.
Immigration accounts for almost all of Canada’s labour force growth and is projected to account for 100% of population growth by 2032. Statistics Canada predicts that by 2036, nearly 1 in 3 Canadians will be immigrants to our country, up from about 25% today.
Between 2016 and 2021, Canada welcomed more than 1.3 million immigrants. More than 405,000 newcomers came in 2021, and 2022 data shows 431,645 new arrivals (a 6.4% increase from 2021) – two record years in a row! Nearly 90 % of these of newcomers settled in four provinces: Ontario, Quebec, British Columbia, and Alberta – in major urban centres.
This does not include temporary foreign workers or the 157,000 international students who became permanent residents in 2021.
The Canadian government is targeting another 900,000 immigrants in 2023 and 2024, then half-a-million annually beginning in 2025.
For perspective, Canada will add a population almost the size of Edmonton or Calgary in the next two years. And to paraphrase a Ralph Klein quote from many years ago, they aren’t bringing their homes, their schools, or their hospitals… but they may fill the more than one million open jobs in our labour force that will build that infrastructure and staff those schools and hospitals.
Alberta is already reaping the rewards. In 2022, we recorded the highest single quarter growth rate in more than 40 years – with over 58,000 new arrivals – 57% from other countries, 33% from other provinces (mostly Ontario and BC), and the remaining 10% from new births. Our yearly growth rate is above 3% while the overall Canadian rate is at 2.25%.
The Canadian Mortgage and Housing Corporation anticipates we will need an additional 3.5 million homes built, over and above current home-building projections by 2030 to meet the demand from new Canadians.
In a year-end Global News interview, federal housing minister Ahmed Hussen said, “We know there is over a million jobs in Canada that remain unfilled, so we need immigrants, skilled immigrants, to come in and help us fill those unfilled jobs and help us grow our economy.” In addition to that, the irony is we actually need more people, skilled immigrants, to also help us in the building trades and the construction sector of our economy.”
Canada’s road to future prosperity parallels its past. Immigration is the driver of Canada’s economic development and growth story. The settlement of the “Last Best West” in the late 1800s helped complete the transcontinental railway and increased agricultural production so we became the world’s breadbasket. Today’s new Canadians will come with the skills and talents our country needs to achieve our 21st Century aspirations.