Immigration: The Key to Canada’s Economic Future

Two neighboring countries in North America are tackling the issue of immigration very differently. On the one hand, we have the United States which is putting into place stringent laws that will make it impossible for immigrants to get assimilated into the society. The American culture, in general, is against the concept of immigration. Politicians like Trump are merely harvesting the public sentiment for their political gain.

On the other hand, there is the Canadian society. They are welcoming immigration with open arms. Justin Trudeau has been creating policies which make it extremely easy for immigrants to start a new life in Canada. Canada is allowing more than 350,000 per year to immigrate to Canada. This adds up to over 1% of the population of Canada. Also, this policy is not new. This has been happening for more than two decades. As a result, more than 20% of Canadian citizens today are people that were born outside the Canadian borders. This is more than double the rate of other developed countries like the United States and the United Kingdom.

The contrast between the two policies is perplexing to many people. However, several others believe that Canada is not creating liberal policies because of humanitarian reasons. They think that Canada has rock-solid economic reasons to be encouraging immigration. This is because the future of their economy depends on such immigration. In this article, we will have a closer look at how immigration affects the Canadian economy.

Working Age Population

Canada has very few citizens in the working age population. There are very few citizens in the 25 to 44 age group which are present in the nation. This means that a large chunk of Canada’s population is either too young or too old. The problem is that Canada has a universal free healthcare system. This means that the government is supposed to provide for the healthcare needs of the entire population. However, in order to be able to do so, the government needs tax revenue. People in the working age group generate tax revenue. This is the reason why Canada is more than happy to allow immigration. They want foreign workers to start working and paying taxes to the Canadian government. This will enable the Canadian government to fulfill their welfare obligations.

Consumer Spending

The 25 to 44 age group is also the consumer segment which buys the most products. This age group primarily consumes cars, houses, vacations and other products and services. Hence, by inviting immigrants, Canada is also giving its domestic economy a boost. In the absence of immigrants, significantly fewer numbers of people would be buying these goods and services. If the aggregate demand goes down, other factors such as employment will also take a significant hit. On the other hand, immigrants have driven up the housing prices across Canada. Some call it a housing bubble. However, the fact remains that this has resulted in wealth creation for a lot of Canadian citizens who will lead comfortable lives in retirement thanks to the housing wealth that they have created.

Higher Education

More than 40% of the immigrants that are moving to Canada have advanced degrees. These are individuals who contribute significantly to the economic growth of any nation. Canada’s policies are making it easier for students who have studied in Canada to obtain jobs there. As a result, talent from all over the world is attracted to Canadian universities. This creates a good source of revenue for the Canadian universities as well as the government. Also, the pressure on the government is drastically reduced. Since international students pay vast sums of money to study in Canadian universities, the government’s burden is reduced. Given the fact, that the United States is no longer welcoming students in the job market, Canada has emerged as an attractive alternative.

The Problems Facing Immigration

The problem with Canadian immigration is that it has become home to people who work low-level jobs. Statistics suggest that immigrants to Canada earn less than the average Canadian. Also, these same statistics indicate that it takes about ten years for an average immigrant to obtain a job in the field for which they have the requisite skills. Even after they land a role in the same field, they are often found working at a lower level compared to the skills that they have. Many associations have been formed to get rid of this discrepancy. One of the ways is to ensure that the government policies allow immigrants to work as soon as they arrive in the nation. This would help both immigrants and the employers. On the one hand, immigrants are having a tough time finding new jobs whereas on the other hand several positions in fields such as healthcare and information technology are not being filled due to unavailability of skilled workers.

To sum it up, immigration is not harming the Canadian economy. Instead, immigration is actually sustaining the economy or even helping it grow. This is the reason why Canada is busy creating policies designed to welcome immigrants while other countries are trying to restrict immigration.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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