Canada’s Immigration Policies Paying Off for its Economy

As we’ve written previously, Canada has similar demographics to the U.S. – an aging population and low birthrates.  However, Canada’s immigration response in recent years has diverged sharply from the U.S’s approach.  While the U.S. has taken multiple steps in recent years resulting in reduced legal immigration, in contrast, Canada has actively liberalized its immigration policies to attract more immigrants.

Canada’s approach appears to be paying off.  The Wall Street Journal reports that Canada’s rate of population growth is outpacing all the other G7 countries, and its economy expanded by 1.5% in 2019, second in the G7 only to the U.S.  As the article  notes,

Canada’s labor force grew 2% last year according to data from the OECD, faster than the U.S. and Japan….. Most of that was fueled by population growth, about 80% of which comes from immigration.

The growing head count, in turn, has supported growth in consumer spending and a rebound in home sales and prices that began during the second half of last year. That helped Canada overcome a sharp slowdown in trade, muted business investment and a cooling global economy last year.

While Canada experienced an economic slowdown in 2019 compared to the pace of its economy from 2010-2018, without immigration, the scenario would have been worse.  As one economist stated, immigration isn’t  “just the main game in town, it’s the only game in town.”

You can find the article here.