A report released Monday from economists at the Bank of Canada warns the country is “caught in a population trap” due to rapid growth of immigration. The report defined the term population trap, from Oxford Reference, to be a “situation where no increase in living standards is possible, because the population is growing so fast that all available savings are needed to maintain the existing capital labour ratio.” Ottawa has a target of 485,000 new immigrants in 2024, with StatsCanada warning the population will double in 25 years. Meanwhile, Canada’s GDP (gross domestic product) per capita has seen no growth since 2017. Despite Canadians voicing concerns about skyrocketing immigration causing a housing crisis, data released by Stats Canada in December showed Justin Trudeau’s Liberal government is already well exceeding its target. Ottawa brought in 430,635 immigrants in the third quarter of 2023 and in the earlier months of the year, 1,030,378 immigrants entered. This 3.2% leap is higher than any previous year in Canadian history. As of October, there are 2.5 million temporary residents in Canada, 210,000 of whom came within the previous three-month period, according to Stats Canada. Rather than a million immigrants as was allowed in 2023, Bank of Canada economists estimate the limit should be 300,000 to 500,000. The bank is now sounding the alarm on the “staggering” influx of new immigrants, arguing there is no way for the country’s infrastructure to sustain them, particularly when it comes to housing. “Canada is caught in a population trap that has historically been the preserve of emerging economies,” the report states. “We currently lack the infrastructure and capital stock in this country to adequately absorb current population growth and improve our standard of living.”There are currently no limits on the intake of temporary residents in Canada. Chief economists attended an Economic Club of Canada event in Toronto last week, where the issue was widely discussed — with Ottawa under fire for its management of immigration, per the Globe and Mail. Chief economist at CIBC Capital Markets Avery Shenfeld said at the event she was “surprised that the government is moving fairly slowly on this,” pushing for “some urgency” with finding a “better balance” between the intake of international students and temporary workers “with the arithmetic of our home-building strategy.” “The numbers just don’t add up,” Shenfeld said. Bank of Nova Scotia chief economist Jean-François Perrault said at the same event that Ottawa has made it “too easy” and cheap to hire foreign workers rather than Canadians. “We’re making it cheaper to bring people in, rather than investing,” he said. Stéfane Marion, chief economist and strategist for the Bank of Canada said the rapid rate of immigration that inflation for renters, citing the Toronto are specifically, is uncontainable. Ottawa has “lost control on immigration policy,” he said.
