Canada's demographic gap can't be filled with immigrants -

Canada’s demographic gap can’t be filled with immigrants

Despite the record number of immigrants who came to Canada in the last year, it is not nearly enough to fill the gap left behind by retiring baby boomers

Minister of Immigration John McCallum addresses a news conference in Vancouver, Wednesday, August 17, 2016. THE CANADIAN PRESS/Jonathan Hayward

Minister of Immigration John McCallum addresses a news conference in Vancouver, Wednesday, August 17, 2016. THE CANADIAN PRESS/Jonathan Hayward

We’ve known since the Trudeau government was elected last year that 2016 would bring with it one of the largest influxes of immigrants in modern Canadian history. Now we have the numbers to back it up. According to Statistics Canada, the country took in 321,000 immigrants in the 2015-16 year, the largest number of newcomers in a single year since 1910.

That sure sounds like a lot of new Canadians—more people to work, to buy homes, to reignite the Canadian economy. Which is more or less the pitch that Canada’s Immigration Minister John McCallum has made of late in building the case for higher levels of immigration. “Canada is an aging country, so we are in need of new blood,” he said recently. “Canadians aren’t having enough babies and so the labour force growth depends very much on the entrance of immigrants.”

Here’s the problem with that.

The chart above is an update (and slight modification) of one originally produced by University of Laval economist Stephen Gordon five years ago. It shows Canada’s population, by age, in 2016, with the new immigrant population layered on top. Despite the larger number of immigrants who arrived in the last year, their contribution to Canada’s population is still small compared to the gap in the working age population left behind by retiring Baby Boomers.

How small? The shortfall in the prime working age population, those aged 20 to 50, is around 2.2 million people. In other words, that’s the number of people missing from Canada’s economy as population growth slowed after the baby boom, which peaked with those aged 53.

If every immigrant that Canada brought in was in that 20 to 50 age range, and if the country were able to maintain the level of immigration it did this year, it would take roughly seven years to make up for the gap behind the Boomer peak, all things being equal. But of course, not all immigrants are in that age group. As the chart also shows, growth in Canada’s working age population is about to drop off significantly as that hollow of under-20-year-olds edges into their working years. This all means that even more immigrants will be needed to fill the gap.

This isn’t to say immigrants can’t mitigate the effects of Canada’s aging population. This country’s ability to absorb people from diverse cultures is an advantage remarkably few other nations enjoy.

As it is, immigrants are already a major driver of Canada’s labour force. In Toronto, for instance immigrants now account for nearly 51 per cent of the city’s labour force. It’s slightly less in Vancouver (41 per cent) and lower still in Montreal (26 per cent) but all three cities have seen immigrants grow as a share of the labour force over the past few years.

There’s a problem here too, though. New immigrants don’t fare well in Canada’s job market. The unemployment rate among immigrants who landed in Canada within the last five years has, on average, been more than double that of Canadian-born workers over the last decade. Those who came between five and 10 years ago are a bit better off—their unemployment rate is about 1.5 times higher. It’s only among immigrants who’ve been in the country for more than a decade that the gap with Canadian-born workers is erased. It shows that even if Canada ramps up the number of newcomers it accepts, their performance in the labour market will surely lag for years.

The experience over the last year with the influx of more than 30,000 Syrian refugees, who are included in this year’s higher immigration count, has shown how challenging it is to quickly integrate large numbers of people. So too has the backlash in Vancouver against homebuyers from mainland China (and the murky question of who is a foreign buyer and who is a genuine immigrant) even as Canada works to double the number of visa offices in that country. Meanwhile, Canada may pride itself on being more open and tolerant of immigrants, especially in contrast to the ugliness going on in the U.S. and Europe, yet internal polling carried out by Immigration Canada shows one quarter of Canadians feel immigration levels are too high as it is. The news of this year’s immigration boom does not sit well with them.

Which is silly, really, because despite that headline-grabbing number of new immigrants, their number works out to just 0.8 per cent of Canada’s population, or 0.1 percentage points higher than the average of the last 20 years. Some boom.



Canada’s demographic gap can’t be filled with immigrants

  1. Demographics are a problem for all OECD economies. Canada is not alone.

  2. We don’t need more mass immigration take a look at the unemployment rate it is the highest it’s been in 15 years and people under 35 make less now than they did in the 1980s when adjusted for inflation. Theres no jobs for 2.2 million more people, all more people will do is cause more competition for the scant remaining jobs and work to keep wages rock bottom…which is of course the real agenda of large immigration, low wages for the benefit of big business.

    • Sorry Paul – not sure where you’re getting your numbers from (or if you’re talking about one specific region) but the most recent numbers available (July) show we have, nationally, the lowest rate of unemployment since 2008 – i.e. just before the Great Recession. 6.3%

  3. It sounds to me as though feminism is the problem, in Canada encouraging women to do what they want with their lives and not to have children if that is their choice. Feminism has encouraged young women to not take responsibility for their actions, with that issue as well as choosing to wear whatever they like even though it may be dangerous to do so in some areas and time of day, and choosing to drink as much as they like and expect not to have to pay the consequences. I realize that feminism has done a lot of good for many young women, mainly of middle class, but it is too bad that aspects of it went overboard, particularly about the sexual and reproductive rights of women, which helped this country end up the way it has, with not enough women wanting marriage or children, or not believing staying home with the kids was a valuable line of work (unpaid), to the extent that immigrants with more traditional values have had to be imported.

  4. This is the issue with current immigration method. The current process allows more old people to come in, while excluding all the young professionals because they have lower marks than those old people due to lesser years of experience. If they do not want that, an overhaul is needed for the current immigration process.

  5. Last 20 years – what happened was around 1990 Mulroney and Barbara MacDougall gave us a policy or permanently high immigration regardless of economics conditions – over 200,000 except for a couple of years under Chretien.
    BUT under Pearson and Pierre Trudeau, immigration levels were changed each year depending on the economy – to under 90,000 in 1983 and the first couple of under Mulroney.

    Mulroney wanted to get the immigrant vote, but high immigration and bringing in a lot of workers to create a surplus is a policy Bay Street loves – basic supply and demand, a surplus of labour means unemployment, and low wages and compliant workers afraid of losing their jobs.