Balancing Immigration: Sustaining Growth Amidst Demographic Shifts in Canada

A new report by TD Bank emphasizes the significance of finding a balance between integrating immigrants, maximizing the potential of Canada's current workforce, and accommodating population growth as essential for sustnable economic and social development in response to evolving demographic changes.

Last year, Canada attempted to address labor market shortages with numerous policy implementations. However, this rapid influx of skilled foreign workers has sparked concerns about possible disruptions in other sectors such as housing affordability, healthcare avlability, infrastructure expansion, and social welfare programs - all due to an unprecedented increase in workforce demand.

The authors argue that greater planning and estimation must be implemented on what constitutes a 'true absorption rate' for population growth. Policy should not solely focus on employers' perceived demands or even educational institutions' needs.

Canada has experienced a substantial surge of 1.2 million people over the past year, providing significant support to its labor market and driving economic growth prospects. This boom is forecasted to continue through at least 2023 due to an influx of non-permanent residents like temporary foreign workers, international students, and refugees.

In response, Canada has removed limits on low-wage positions for seasonal industries that could be filled with Temporary Foreign Workers TFWs. The limit on TFWs was also increased to 20 of the workforce for firms and upped further to 30 in industries experiencing large job vacancies. This combination resulted in a notable surge in approved TFW positions.

Canada is known for admitting international students annually, many of whom remn part of its workforce after graduation through initiatives like doubling the number of foreign students from about 240,000 to roughly 450,000 by 2022. However, Canadian educational institutions have exceeded even these numbers with over 807,000 study permits issued last year.

The last category of non-permanent residents - asylum seekers - is largely influenced by global events and fluctuates accordingly; however, Russia's invasion of Ukrne led to millions displaced. Over 1.1 million applications were submitted under the Canadian-Ukrne Authorization for Emergency Travel CUAET, out of which over 800,000 have been granted approval.

The effects on Canada’s market are varied and diverse. The monthly job growth averages around 40,000 since last spring with job vacancies kept in check. This helps stabilize the unemployment rate to a level that would have dropped as low as 4.5 without immigration.

Nevertheless, there's also a sign of housing shortage due to this population boom which is expected to continue even as the population grows further.

The report recomms that policymakers implement initiatives that promote better integration both for new and existing Canadians so that they can reach their full potential. This would ensure that not only does the economic pie grow in size, but its quality also improves through these efforts.

In , while immigration brings significant benefits to Canada, it's crucial to find a balance between the rapid influx of newcomers and the country's ability to plan for and accommodate them without causing strn on essential services such as housing or healthcare.
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