Canada has one of the fastest population growth rates in the world
Canada’s population has been increasing fast, with official data from Statistics Canada revealing a 3.2% growth rate in the past year, making it one of the world’s fastest.
But while much of this growth (804K) is attributed to temporary workers and foreign students, Canada welcomed almost half a million new permanent residents too, bringing the population to a new record of 40.5 million on October 30, 2023.
While immigration remains important, especially with an ageing population, the question is how this impacts the economy, something addressed by Desjardins’ principal economist Marc Desormeaux.
He notes that there are both short- and long-term implications of a growing population, and in the context of elevated inflation it could mean upward pressure as more people increases demand for goods and services. But with extra available workers entering a tight labour market, it could mean the inflationary impact of wage hikes could be eased.
However, he says the large share of population growth that is temporary (70% of the past year’s total) could weigh on economic growth with labour demand and foreign worker program usage declining amid the expected economic slowdown in the first half of 2024.
There are also concerns about long-term migration patterns and how this may affect Canada’s economic prospects. This includes the near-record movement of people from Ontario to other provinces, partly due to housing affordability challenges.
Desormeaux makes the often-heard call for greater housing supply to ease price acceleration, but also highlights the ongoing issue of below-par productivity which could weigh on Canada’s GDP per capita and standard of living.
“Tackling these problems is critical to ensuring Canada remains a welcoming and prosperous place in the years to come,” he concludes in his article.
