Immigration shock could Cripple Canada’s Economy

The covid pandemic, will adversely affect Canada’s economy more than any other country.  Population growth is the key driver of Canada’s economy, fueling economic growth and real estate demand to unprecedented heights.

Canada’s population is 36.7 million people (A small 0.4% of the worlds population), let’s look inside its population.  The Canadian birth rate per woman sits at 1.61, well below the 2.1 rate required to sustain it’s population (The USA is 2.06).  This low birth rate is blamed on high real estate prices, negative real wage gains and declining job security, ever compounding the low rate.

Immigration is required to boost economic demand and growth.  Other key factors to drive demand are incomes, expectations and prices, but population growth is most critical.  The more people you have, the higher the demand for real estate, cars, food, entertainment etc which all continue to spin off more jobs to supply those industries and more economic growth.

Canada is great at attracting immigrants.  Its rate of immigration growth has doubled since 2014/2015, the highest rate in the G7 at 1.4% (USA 0.6%).  Stats Can reports:

341,175 new permanent immigrants in 2019

550,000 temporary workers (2.9% of total employment) in 2017

721,205 international students in 2019 (growing 13% per year, approx 100,000 per year), representing one third of all Canada’s 2.1 million post secondary students.

22,100,000 tourists in 2019 up 10% in 2019 (-2.1% in the USA).  On average, tourism directly contributes 4.2% of GDP, 6.9% of employment and 21.7% of services exports to OECD countries

Another statistic and key issue in the United States socio-political scene, is illegal immigration.  Pew Research Center estimates, 3.3% of the American population are there illegally.  If Jeffrey Passel’s vigorous analysis is correct, one might assume it might apply to Canada, partly because Canada constantly ranks as one of the best places to live in the world.  That would translate into 1.2 million people, and thousands stopped from coming by the pandemic additionally.

These are huge numbers considering Canada only has 36.7 million people. Forget the fact, permanent residents dropped 64% due to the pandemic so far this year.  Consider the profound effects on the really big numbers: temporary workers, international students and tourists!

Clearly the pandemic will have a gigantic impact on Canada’s economy, and real estate prices.