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February 27, 2023

New Immigrants Are More Likely to Be Employed Than Canadians Born in Canada

New Immigrants Are More Likely to Be Employed Than Canadians Born in Canada: Canada has set an immigration target of welcoming 1.45 million immigrants over the next three years, with 60% projected to be through economic class programs. This influx of newcomers is expected to have multiple positive effects for the Canadian economy and society. Canada has long been known for its welcoming stance towards immigrants, and in the coming years, it plans to welcome even more newcomers. Over the next three years, Canada has set a target to welcome 1.45 million immigrants, with 60% expected to be through economic class programs. This influx of new immigrants is expected to have significant impacts on the Canadian economy and society, with many positive outcomes predicted, as demonstrated by a recent study by Desjardins on the impact of federal immigration targets.

In this article, we will explore some of these impacts, including how immigration affects the Canadian workforce, the country’s GDP growth, and the demographic makeup of the population. We will also examine some of the challenges that may arise as a result of this wave of newcomers and whether Canada is ready to handle it.

Canada’s Immigration Targets and Their Effects on the Economy and Society

New Immigrants

New immigrants are now more likely to be employed than their peers born in Canada. This is due to the convergence of two major trends: the noted increase in the employment rate of new immigrants starting in 2016 and the gradual decline in employment rate of people born in Canada. New immigrants are disproportionately of core working age (25-54 years) and are often selected for human capital factors that make them ideal participants in Canada’s labour force. In contrast, Canadians have an aging population, with a consistent group of retirees exiting the workforce every year, which is one of the reasons for immigration.

New Immigrants Will Change the Demographic of Canada

Immigration is at the heart of population growth for Canada, and the bulk of new immigrants are economic and of core-working age. With a large influx of immigrants expected in the coming years, Canada’s population is estimated to grow much younger. Currently, the median age of Canadians is 41 years, with retirees exiting the labour force every year. The arrival of new immigrants is expected to not only raise Canada’s population up to self-sustaining levels (i.e. a birth rate of at least two per household) but also bring a host of economic advantages to the country.

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New Immigrants Are Expected to Boost Potential GDP Growth

Many new immigrants have jobs even before entering the country and are admitted for human capital factors that enable them to effectively contribute to the workforce. Therefore, immigration is predicted to raise Canada’s GDP per capita as labour input is expected to increase with immigration. An increase in GDP is generally a sign of a healthy economy and can lead to further benefits like increases in hiring and wage growth. Additionally, the arrival of newcomers is expected to further help bolster the supply-side economy and reduce inflationary pressures on the Canadian economy.

Can Canada Handle This Wave of Newcomers?

One key note from the Desjardins studies was the cyclical outcomes for immigrants in the labour market. Roughly every ten years sees a spike in newcomer unemployment before once again diminishing (although after 10 years in Canada, the unemployment rates for immigrants and Canadians are largely indistinguishable). Newly landed immigrants can also have a harder time gaining initial footing in the Canadian labour market as they begin to establish themselves in Canada.

Positive Labour Outcomes Are Expected for Newcomers

Job vacancies are currently at record highs and double what they were during the pandemic, and the labor market remains tight. In addition to an aging population exiting the workforce every year, newcomers with in-demand skills and desirable human capital factors seem more likely to have favorable outcomes in the Canadian labor market.

Canada’s immigration targets are expected to have positive outcomes for the country both societally and economically. In the wake of the COVID-19 pandemic, Canada has a greater need for immigrants than ever, and there are reasons for both newcomers and Canadians alike to be hopeful for positive outcomes with the arrival of immigrants in the next three years.

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