High immigration levels could add billions to Ottawa-Gatineau GDP: report

Shelby Thevenot
Published: November 9, 2020

Immigration is vital to the economic growth of the Ottawa-Gatineau region, according to a new report.

The Conference Board of Canada looked at the demographic and economic impacts of immigration over the last decade. Their new study is called Four Futures: The Economic Impact of Immigration in the Ottawa-Gatineau Region. The Conference Board also forecasted the growth in the region between 2019 and 2036, using four analytical scenarios to explore the links between immigration, employment and growth in the region.

The first scenario imagines that at the pre-pandemic immigrant arrival trends in Ottawa-Gatineau stay the same until 2036. Annual real GDP growth would average 1.9 per cent, and total GDP would increase by $34 billion.

They then created a fictional no-immigration scenario to illustrate what would happen if no new immigrants moved to the area. Annual real GDP growth would average 1.7 per cent, and real GDP would be $28.5 billion, which is a reduction of $5.5 billion.

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In the third scenario, researchers projected a higher level of immigration where the region would raise immigration intake from 11,005 newcomers in 2018 to 19,500 in 2036. Annual real GDP growth would be 2.1 per cent in this scenario, and the increase in total GDP would be $37 billion.

The increase in GDP seen in this scenario came out to about $900 million higher when researchers factored in improved wages and employment for immigrants in the fourth scenario. In other words, with a combination of increased immigration and improved labour market outcomes, the National Capital Region could see a total GDP of $37.9 billion.

"Immigration continues to be an important driver of Canada’s social and economic well-being, especially as we recover from the COVID-19 pandemic," Pedro Antunes, Chief Economist at The Conference Board of Canada, said in a media release. ‘This is true for the national economy and at a local level such as the Ottawa-Gatineau region. Immigration will help to underpin the area’s economic competitiveness and future growth."

The Conference Board suggests that immigration is a solution to the challenges Canada faces with a dwindling work force. With an ageing population, an increasing number of people are leaving the work force. At the same time, fewer young people are entering the work force. These factors combined threaten to limit economic growth and strain social supports and health care in the Ottawa-Gatineau area.

Before the pandemic hit, the region attracted about 3 per cent of all newcomers to Canada each year. The study suggests that high levels of immigration are needed in order to sustain the regions economic productivity, and that this will be more relevant for post-coronavirus economic recovery.

"The findings of the Four Futures report point to the critical importance for Ottawa and Gatineau stakeholders to explicitly plan for the level of immigrant attraction that will sustain our economic growth and social development. The analysis is compelling and clarifies for us the linkages between immigration, employment, and the city’s overall economic growth," says Hindia Mohamoud, Director of the Ottawa Local Immigration Partnership, in the release.

The study was jointly commissioned by the Ottawa Local Immigration Partnership (OLIP) and the Ottawa Employment Hub, with funding from Immigration, Refugees and Citizenship Canada and Ontario’s Ministry of Labour, Training and Skills Development.

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© 2020 CIC News All Rights Reserved

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