Canada is to make a major announcement that will shape the country’s economic trajectory for the years to come.
Immigration Minister – Marco Mendicino will unveil Canada’s new immigration levels plan in the coming Friday, which will detail the number of newcomers the country seeks to welcome in 2021. This announcement is generally a standard rate.
Since the late 1980s, Liberal and Conservative governments have gradually increased the number of newcomers to Canada. The rationale is simple. Newcomers help offset the negative economic and financial impacts created by Canada’s aging population and low birth rate.
Nothing in 2020, however, has been the standard fare.
The coronavirus pandemic will put Canada well below the target of 341,000 newcomers it had set for 2020.
Intuitively, one might think that it no longer makes sense to aim for a comparable level of immigration next year. The borders have been closed to contain the virus. Canada has a weaker economy and a high unemployment rate.
But reducing the target due to COVID-19 would be wrong for the following reasons.
The pandemic has not changed the need to welcome newcomers to replenish the more than 9 million baby boomers who will be of retirement age by 2030. Our birth rate is too low to replenish the babies -boomers and it is said that the economic uncertainty caused by the pandemic could induce a baby bust.
We will need to rely more on technological advancements to meet our future labor force needs, but we still need talented Canadians and immigrants to support technological advancements. Furthermore, Canada’s economy cannot grow as much as it does without the growth in the workforce that was fueled by immigration before the pandemic.
It can be argued that higher immigration is now even more important. Economic activity will weaken even more if we have a bust baby.
To keep the economy afloat, Public debt is growing, but future generations will eventually have to service the debt.
Therefore, welcoming more immigrants will be essential to sustaining the growth we will need to transform our post-COVID economic and fiscal fortunes.
It can legitimately be argued that it is unwise to welcome more immigrants during a period of high unemployment.
The rebuttal of this argument is that immigration stimulates short-term job creation, as newcomers spend money to settle in Canada.
After the pandemic is over, Job creation will accelerate. We need to start preparing for the post-COVID economic recovery now. Before the pandemic, Canada had some of its lowest unemployment rates on record, in part due to its aging population and low birth rate. With immigrants to fill the vacancies, Canada will return to relatively low unemployment rates.
A new study from the Mendicino Immigration Department shows that immigrants who have recently arrived in Canada as skilled workers perform well in the labor market. Since we attract the best of the best, we should not be overly concerned about the ability of these immigrants to eventually land in Canada.
Finally, the safety of Canadians and protecting their health remains the top priority. We have to be assured that it will remain so, whatever goal Mendicino announces on Friday. The target doesn’t necessarily mean Canada will welcome that number of newcomers next year if the pandemic persists. Rather, Canada can enumerate its immigration target but only allows future Canadians to physically enter the country when public health experts believe it can be safely achieved.
Immigration was important to Canada’s economic prosperity before COVID-19 and is expected to play an even more important role in our economic and financial health after the pandemic. The Federal government of Canada would be wise to stay the course on immigration. The best decision would be to announce immigration targets for 2021 and beyond that match the level of newcomer admissions targeted by Canada before the pandemic.