Is Canada really enjoying economic prosperity or is it a mirage for immigrants? What experts say

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In order to foster economic growth and fill labor market gaps, the prime minister of Canada has ramped up immigration, but now the influx is straining public services and causing the economy to overheat.

With an estimated 2.5 million new permanent residents since entering office in 2015, Prime Minister Justin Trudeau has increased the population to above 40 million.

Despite aging residents retiring and adding to healthcare costs, Statistics Canada said Canada’s population grew at its fastest rate since 1957 last year, ranking among the top 20 fastest-growing countries worldwide.

According to Marc Ercolao, an economist at TD Securities, Canada has equaled the United States with average GDP growth of just over 2% during the previous ten years, significantly above the 1.4% G7 average. This is mostly due to immigration.

But issues brought on by mass immigration are starting to surface. First of all, when it attempted to slow economic development, the Bank of Canada had difficulty determining the impact of the arrivals.

In response to pressure from Toronto’s new mayor, Trudeau’s administration promised almost $100 million ($76 million) earlier this month to assist in providing housing for migrants who were sleeping on the streets. Interestingly, one-fifth of Canadians in the publicly funded healthcare system does not have a family doctor, the Angus Reid Institute research firm said last year.

Data analytics firm Inrix says Toronto drivers lost 118 hours in traffic in 2022, up 60% from the year before. Despite immigration contributing to annual GDP, per capita GDP has grown only 2.4% since the first quarter of 2016, compared to 11.7% in the United States.

“The Canadian economy on a per-capita basis is flat on its back,” said David Rosenberg, chief economist and strategist at Rosenberg Research. Through population growth “you can create this mirage of economic prosperity, but in the end that’s what it is, a mirage,” he said.

Although there are experts who also said that Canada’s job market is thriving, particularly for skilled workforce in sectors like Technology, Financial Services, and Healthcare.

“Contrary to the notion of a ‘mirage’ of economic prosperity, Canada’s job market is thriving, particularly for skilled workforce in sectors like Technology, Financial Services, and Healthcare. Especially in technology, roles in product management, technical program management, and development seeing significant growth. Despite a minor setback in 2022, the job market has consistently held strong, underscoring the nation’s economic resilience. By fostering friendly immigration policies, Canada can further amplify its success as an attractive destination for job seekers and businesses alike., ” Manan Puri, Co-founder & CEO of Strategy4GMAT, a higher education consulting firm, told TechGig.

Even, Shalini Lambah, Chief executive, Migrate World, also shared her point and said, “Canada’s aging population and low birth rate necessitate immigration for sustained growth. The government’s skillful management of immigration policies has garnered public trust, recognizing its positive impact on the economy and society. Immigration injects young and skilled workers, revitalizing the labor force and supporting economic prosperity.

“With a balanced approach and public support, immigration remains a pillar for Canada’s progress, empowering the nation to overcome demographic hurdles and cultivate resilience for a brighter future,” she added.

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