Population and labour force growth are important to keeping the Canadian economy strong.
Throughout its history, Canada has relied on newcomers to help stimulate economic growth.
“Immigration is becoming even more important to Canada’s economic success,” says Marc Desormeaux, senior Scotiabank economist. “Canada’s population is aging and its birth rate was among the lowest in the G7 before the pandemic. Over time, those factors are expected to limit the pool of workers available to contribute to the economy. Welcoming newcomers helps to offset the economic challenges caused by an aging population and a low birth rate.”
Despite its population challenges, Canada was the only G7 country that saw an increase in population before the pandemic thanks to its openness to global talent.
In response to the pandemic, the government released a new plan in October 2020 to support economic recovery through immigration. To ensure that Canada has enough workers to fill gaps in the labour market and remain competitive on the world stage, the new plan increased the number of immigrants the country hopes to welcome. The new target for 2021 is 401,000; 411,000 in 2022, and 421,000 in 2023.
With travel restrictions in place to control the spread of COVID-19, immigration has dropped significantly.
Statistics Canada reported that as of January 1, 2021, Canada experienced the lowest annual growth since 1916. The drop in immigration during the pandemic has impacted all provinces and newcomer admissions fell from almost 342,000 in 2019 to about 185,000 in 2020—a 45% plunge, Desormeaux says.
Even though vaccination programs provide some hope that the end of the pandemic is nearing, increasing the flow of immigration to pre-pandemic levels, which are necessary to stimulate the Canadian economy, will not be immediate.
“So far in 2021, immigrant admissions are up 25% versus the same period last year, but still below pre-pandemic levels,” Desormeaux says. “Loosening of pandemic restrictions likely contributed to some of those increases, but Canada has also seen a rise in the number of permanent residents who previously held temporary work and study permits—particularly in those provinces where admissions are up to date this year. The recent improvements in immigration levels stem from changes in the immigration status of individuals already in the country.”
He continues, “The government’s ability to hit its immigration targets will ultimately depend on how quickly Canada is able to get its population vaccinated and reopen and how quickly global travel activity recovers.”
“In general, we’re optimistic about Canada’s ability to attract skilled newcomers after the pandemic,” says Desormeaux.
This optimism is echoed in a March 2021 report from the Boston Consulting Group, which conducted a study of 209,000 people in 190 countries and found that “Canada is now the first choice of foreign workers.”
The benefits of immigration to Canada are far-reaching and synergistic, both for the newcomers who make Canada their home as well as the country itself. The reasons Canada is expanding its immigration plans include:
Immigrants contribute to economic growth
Immigration is a key element of economic growth in Canada contributing billions of dollars to the gross domestic profit (GDP). When newcomers come to Canada, they stimulate the economy by spending money on goods, housing, and transportation.
Immigrants support an aging workforce
Immigration helps form the structure of the Canadian workforce from its size to age range to the skill sets available. According to data from Scotiabank’s Global Economics Provincial Pulse Report, many newcomers to Canada, specifically to central Canada, are younger than the Canadian population as a whole. This helps to offset losses from an aging Canadian-born population.
Immigrants provide skilled workers
Canadian immigration programs that prioritize highly skilled workers and university-educated newcomers have also resulted in strong job creation in high-wage sectors including professional, scientific, and technical services. In fact, “the number one limiter for growth for our business customers was a shortage of skilled labour,” says Dan Rees, Group Head, Canadian Banking for Scotiabank. Immigration helps to solve this problem as immigrants represent 50% of all degree-holders in science, technology, engineering and math (STEM fields).
Immigrants create jobs and strengthen trade
Immigrants are also large contributors to innovation and job creation with a higher rate of entrepreneurship than their Canadian-born counterparts. Immigrant-owned businesses can also improve trade ties to Canada.
Immigrating to a new country comes with its challenges like learning a new language, getting used to the weather and adapting to a new culture. Immigrating during a global pandemic makes this even more challenging.
In addition to Canada’s robust immigration policy, the business community can also help immigrants get acclimated to their new lives. Here are four ways newcomers can find support from Canadian businesses:
Scotiabank is doing what it can to support newcomers with its 10-year, $500 million commitment called ScotiaRISE.
ScotiaRISE promotes economic resilience among disadvantaged groups, with the aim of removing barriers to advancement and increasing access to opportunities. ScotiaRISE is focused on three main areas including:
ScotiaRISE is an investment in people and communities and in the future of Canada. In May 2020, Scotiabank gave $100,000 to the Windmill Microlending charity to support the retraining and certification of over 1,000 immigrant professionals. Some of this money was used to assist with the re-accreditation of foreign-trained healthcare workers who were then deployed to join in the fight against COVID-19.
Scotiabank also offers a special Scotiabank StartRight® Program for newcomers to help newcomers get their financial affairs in order for their lives in Canada. Through the support of the StartRight program, newcomers can begin banking in Canada and gain access to savings, no-fee international money transfers and help from banking advisors. The StartRight program can also help newcomers get a credit card with no credit history and offers specialized mortgages for those looking to find their new home in Canada.*
The Canadian government has shown its commitment to newcomers by increasing the target immigration goals. Businesses can also show their support to newcomers by providing access to opportunities and creating environments of inclusion. An investment in immigration is an investment in the economic resilience of Canada.
CanadaVisa and Scotiabank invite you to join our next free webinar on Wednesday July 14: Why Newcomers are Important to Canada’s Economic Success!
Scotiabank is one of the top Canadian banks and a leading bank in the Americas. Guided by our purpose “for every future”, we help our customers, their families and their communities achieve success through a broad range of advice, products and services.
Launched in 2008, the Scotiabank StartRight Program is designed to simplify banking for Canadian Permanent residents, International Students and Foreign Workers who have recently landed in Canada. We can help ease your transition to Canada by getting you started with a Scotiabank International Account that allows you to transfer up to $50,000 before you arrive to help you feel more prepared knowing you have proof of funds ready. We can even help fast track your study permit with the Scotiabank Student GIC Program.
Our Scotiabank StartRight program can also help you start banking in Canada with 12 months of free banking, access to credit with no credit history, unlimited no-fee international money transfers, and expert help from Financial Advisors.
We also launched ScotiaRISE – our new, 10-year, $500 million community investment program designed to help promote economic resilience among disadvantaged people and communities. In particular, the program is centred on using funding and partnerships to increase graduation rates and postsecondary enrolment, help newcomers feel at home faster and secure meaningful employment and senior opportunities for underrepresented groups. It’s all part of why Scotiabank is the bank for newcomers.
* Subject to credit approval. To be eligible, you must be a participant in the Scotiabank StartRight Program. The Scotiabank StartRight Program is created for Canadian Permanent residents from 0–3 years in Canada, International Students and Foreign Workers.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.
Sponsor ContentThe benefits of hiring a lawyer to help with your PGP immigration application The Campbell Cohen Immigration Law Firm can help you ensure that all documents are complete, correct, and submitted on time.