ANALYSIS: Why Canada should stick to its pre-COVID plan of targeting over 341,000 new immigrants in 2021.
Canada will soon make a major announcement that will shape its economic trajectory for years to come.
By Friday, immigration minister Marco Mendicino will unveil Canada’s new Immigration Levels Plan which will detail the number of newcomers the country seeks to welcome in 2021.
This announcement is usually standard fare.
Since the late-1980s, Liberal and Conservative governments alike have gradually increased Canada’s newcomer intake. The rationale is simple. Newcomers help offset the negative economic and fiscal impacts created by Canada’s aging population and low birth rate.
Nothing about 2020, however, has been standard fare.
The coronavirus pandemic will result in Canada falling well short of the 341,000 newcomer target it had set for 2020.
Intuitively, one may think it no longer makes sense to target a comparable level of immigration next year. Borders have been shut to contain the virus. Canada has a weaker economy and high unemployment.
But reducing the target due to COVID-19 would be a mistake for the following reasons.
The pandemic has not changed the need to welcome newcomers to replenish the over 9 million baby boomers who will be of retirement age by 2030. Our birth rate is too low to replenish the boomers and there is talk that economic uncertainty caused by the pandemic may induce a baby bust.
We will need to rely more on technological advances to meet our future workforce needs but we still need talented Canadians and immigrants to support advances in technology. In addition, Canada’s economy can only grow so much in the absence of the labour force growth that was being fueled by immigration prior to the pandemic.
A case can be made that higher immigration is now even more important.
Economic activity will weaken even further if we have a baby bust.
Government debt is rising to keep the economy afloat during the pandemic, but future generations will eventually need to service the debt.
Hence, welcoming more immigrants will be vital to supporting the growth we will need to turn our post-COVID economic and fiscal fortunes around.
One may legitimately argue that it is unwise to welcome more immigrants during a period of high unemployment.
The rebuttal for this argument is that immigration stimulates job creation in the short run as newcomers spend money to get themselves established in Canada.
Job creation will accelerate once the pandemic is over. We need to begin preparing for the post-COVID economic recovery now. Prior to the pandemic, Canada enjoyed some of its lowest unemployment rates ever in part due to its aging population and low birth rate. We will eventually return to relatively low unemployment and we will need immigrants to fill vacancies.
A new study by Mendicino’s immigration department shows that immigrants who have recently arrived to Canada as skilled workers are performing superbly in the labour market. Given we are attracting the best of the best, we should not be too concerned about the ability of these immigrants to eventually land on their feet in Canada.
Finally, protecting the health and safety of Canadians remains the top priority. We should rest assured this will remain so irrespective of the target that Mendicino announces by Friday. The target does not necessarily mean Canada will welcome this number of newcomers next year if the pandemic lingers. Rather, Canada can enumerate its immigration target but only enable the Canadians of tomorrow to physically enter the country when public health experts deem that this can be achieved safely.
Immigration was important to Canada’s economic prosperity prior to COVID-19 and is set to play an even larger role in our economic and fiscal health after the pandemic. The Canadian government would be wise to stay the course on immigration. The best decision would be to announce immigration targets for 2021 and beyond that are in line with the level of newcomer admissions Canada targeted before the pandemic.