Study: A decline in temporary migration could hurt Canada’s economy

Vimal Sivakumar
Published: October 29, 2023

Although many rightfully link Canada’s economic and demographic growth to a permanent resident boom in recent years, a new Desjardins study suggests that Canada may be underestimating the effect that temporary migration has on the national economy in this country.

According to economist Marc Desormeaux, Canada’s economy could be “hit hard” if the country experiences a decline in non-permanent resident (NPR) migration in the face of a period of economic weakness.

The current state of non-permanent resident migration in Canada

Non-permanent (temporary) resident migration is at the root of Canada’s population growth in “most provinces.”

Discover if You Are Eligible for Canadian Immigration

Note: Temporary residents are a category of migrants to Canada including groups such as foreign workers, international students and refugees

Specifically, foreign worker migration (those with work permits) has led the charge with respect to NPR growth in the last year, as this group has accounted for 70% of all growth in this category. This was found to be true both nationally and in Canada’s four biggest provinces (but more on that later).

Results and Impacts

In this study, predictive modelling – including an upside scenario, downside scenario and worst-case scenario – is used to project how the Gross Domestic Product (GDP) in Canada’s four largest provinces* (Ontario, British Columbia, Quebec and Alberta) would be impacted based on different levels of NPR admission across Canada in 2023 (2023-2024) and 2024 (2024-2025).

*These provinces made up almost 90% of Canada’s total GDP in 2022

Understanding that these results vary by province – between a 0.5 and nearly 2 percentage point drop in GDP in the downside and worst-case scenario projections – the overall results of this study suggest that all four assessed provinces will see a hit to their GDP if Canada sees a reduction in temporary resident migration.

What this means is that the “health” of Canada’s economy would decline as a result of a drop in temporary resident migration. This is because GDP is used to define “the monetary value of all finished goods and services made within a country during a specific period.” In other words, a declining GDP, “used to estimate the size of an economy and its growth rate”, would signal a negative short-term economic future across this country.

Some adverse impacts of a declining GDP may include:

  • An economic recession
  • A decline in “real income”
  • Reduced production
  • Increased unemployment

Conclusion: What could happen if temporary resident migration slows across Canada?

NPR admissions across Canada tend to rise and fall in concert with national economic cycles. In other words, NPR admissions across Canada’s four biggest provinces usually grow when the economy is strong and falter in times of economic struggle.

In light of these results, and expecting a possible recession in the near future, Desjardins makes it clear that Canada’s “recent population‑induced boost to economic activity and tax revenues may not last forever.” In other words, temporary migration to Canada must maintain itself through periods of economic volatility if Canada wants to try to avoid having to “grapple with the immense challenges of a rapidly aging population and a lack of affordable housing supply.”

To accomplish this, Desjardins suggests that Canada needs to produce better data on temporary migration to Canada, as this would help the country “appropriately calibrate labour and housing market policy.”

Discover if You Are Eligible for Canadian Immigration

Share this article
Share your voice
Did you find this article helpful?
Thank you for your feedback.
Subscribe to our newsletter
Did you find this article helpful?
Please provide a response
Thank you for your helpful feedback
Please contact us if you would like to share additional feedback, have a question, or would like Canadian immigration assistance.
  • Do you need Canadian immigration assistance? Contact the Contact Cohen Immigration Law firm by completing our form
  • Send us your feedback or your non-legal assistance questions by emailing us at media@canadavisa.com
Related articles
How to be considered for jobs in Canada while still in the Express Entry pool
A person having an online interview with a recruiter
What should I do if I want to extend my expiring work permit but do not have my new LMIA or CAQ yet? 
male entrepreneurs using cell phone while walking in lobby at office building
Banking for International Students: A Helpful Guide to Picking the Right Bank Account and Credit Card in Canada
There are two main types of personal deposit accounts that international students can open in Canada: chequing and savings.
Know You Are Prepared: 10 Essential Strategies for Success on CELPIP – the Only Canadian Test Designated by IRCC
If you’re applying to become a permanent resident or citizen of Canada, taking the CELPIP Test is an essential step toward your goal because it is one of the approved language tests and the only Canadian functional language assessment designated by Immigration, Refugees and Citizenship Canada (IRCC).
Top Stories
Canada’s immigration minister proposes new legislation for Canadian citizenship by descent
IRCC now accepting community applications for two new pilot programs
How to be considered for jobs in Canada while still in the Express Entry pool
Join our free newsletter. Get Canada's top immigration stories delivered to your inbox.
Subscribe
More in Express Entry
How to be considered for jobs in Canada while still in the Express Entry pool
A person having an online interview with a recruiter
Can I count student work experience towards the Express Entry work requirement?
Two people sitting at a table looking at a tablet working on a project.
The state of the Express Entry pool: April 2024
A collage of a group of people preforming various actions in a single photo
Will my job offer get me Comprehensive Ranking System points as an Express Entry candidate?
Multiracial group of colleagues working on business reports during the meeting
Link copied to clipboard