Trudeau’s Immigration Plan in Doubt as Population Growth Slows

With the country seeing an end to gains in population, courtesy of one of the main drivers of growth in recent years immigration - Canada's immigration policy is now under increased scrutiny. Now the plan seems in danger with Prime Minister Justin Trudeau's government cutting back on temporary residents. The slowing has led to questions over whether the country can continue to grow economically as the population shifts.

A Changing Landscape in Canadian Immigration

Canada has been praised for years as a shining light of immigration, with an approach that boosted both population growth and economic development. Yet new reports are now stating that its growth is tapering off. Canada, For its part, had a growth rate of 0.6%, or 250,000 people, in the second quarter of 2024 — but that is slower than previous periods. The decrease is now expected even as the Trudeau government commits to rejigging its immigration policy — including dialing down the flow of temporary residents.

The Surge and Decline in Population Growth

Since the pandemic restrictions were lifted in 2022, Canada has seen a surge in its population due to a significant influx of immigrants. Over 2.35 million people were added between mid-2022 and 2024, with immigration contributing 96% of these gains. This immigration boom initially provided much-needed support to the economy, but it also brought challenges, particularly in housing and public services, resulting in a growing scepticism toward high immigration levels.

But the population boom is now leveling off. This was the first fall in the growth rate since 2020, with this decrease taking place over three months to July 2024. This is due to the Trudeau government's policy of lowering temporary entry, like international students, guest workers, and asylum seekers, as well as its in-budget increase in spending for security screening and deportation of failed refugee underground populations. Nonetheless, that has not stopped the total number of temporary residents in Canada from swelling to more than 3 million for the first time — and representing 7.3% of the population.

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Temporary Residents: A Growing Concern

Temporary residents will be critical to Canada's immigration policy but have challenges as well. The government aimed to decrease the share of temporary inhabitants up to 5% within three years. This would require a reduction in the number of temporary residents by nearly one million, an unrealistic achievement. The government has so far failed to deliver much results as the net addition of temporary residents in the second quarter of 2024 was only 118,000. While this is the smallest increase since early 2023, it does suggest that we are still stuck in a slow manner of reduction.

Due to the influx of temporary residents, housing availability and affordability are under strain, which economists state has increased faster than Canada's ability to provide housing for this population group, thus raising property prices and rents. The disconnect between levels of immigration and the housing market is responsible for the current housing crisis and has put pressure on the government and policymakers. 

Economic Implications of Slower Population Growth

Even though Trudeau's migration policies have been touted for increasing Canada's labor force and stimulating economic growth, there are significant long-term implications associated with reduced population growth rates, implications that deserve careful analysis. The Bank of Canada recently increased projections for short-term population growth, but experts indicated that as growth normalizes, economic growth could slow its pace in the coming years. 

Canada is experiencing an overall decline in growth, but it still maintains one of the highest annual population growth rates in the world at 3%, down from 3.2% growth in the first quarter of 2024. Coupled with an ageing population and declining birth rates, Canada's growth and sustainability issues have become apparent. That is to say, almost all of Canada's current population growth is a result of international migration, and births only outnumbered deaths by an amount less than 10,000, highlighting the importance of immigration to Canada's labour force and sustaining Canada's current demographic structure and balance. 

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Trudeau's Immigration Plan: Is It Sustainable?

Discussions among economists and public policy thinkers have emerged around Trudeau’s plan of addressing population growth first by lowering the number of temporary residents. Some economists argue that ordinary Canadians and the housing and public services they rely on simply cannot sustain such growth anymore, whereas others would argue that easing up on temporary residents would create a need for essential public services and labour economic activity.

Most of the criticism identifies the issue of how best the government can deal with the inflow of temporary residents. Although the government has set out ambitious plans and goals to address this population group, thus far, that progress through temporary resident workers often needed in sectors such as agriculture, technology, and healthcare, for example, remain in high demand. Further, international students, being a key component of this temporary resident group, are considered significant players in creating value and innovation within the Canadian economy. Reducing international student numbers may create unintended consequences in Canada’s competitiveness.

The Future of Immigration In Canada

As population growth begins to plateau, what does the future of immigration in Canada look like? Given the government pressure to resolve a housing crisis and document solutions to economic issues and public opinion – it is assumed that revisions will be something that the government has to create and modify. Although this proposal of short-reducing temporary resident needs may ease some immediate navies in public services staffing shortages and housing, it potentially further slows economic maturity for long-term vitality as skilled workers and students are limited. 

Canada’s population is just over 41.3 million now, and although growth is slower, it is still having historic averages by this period. Thus, for resource management ( e.g., housing and all segments of public service) and economic stability, it will be important for Canada’s population to keep moderate space as we accept new immigrants into the Canadian economy.  To stay updated on the latest immigration news in Canada, you must contact TerraTern right away!