Canada's largest bank thinks more immigrants are needed
The company issued a report commenting on the policy of the relevant ministry.
A fresh report from the Royal Bank of Canada, the country's largest bank, raises a painful question — does Canada need to increase the pace of immigration? In the new plan presented by the ministry, the expected number of newcomers is reaching a plateau. Bank analysts, on the other hand, believe the country needs to keep raising those numbers.
What's the problem?
Every year, IRCC publishes a plan for the next three years, and this time the expected numbers are unchanged for the first time: Canada's target of 485,000 people in 2024 is still the same. The same goes for 2025, for which a target of 500,000 immigrants was announced in 2022-and it has remained the same. What's more, the target for 2026 is the same: it's also 500,000. By comparison, between 2020 and 2023, Canada's immigration target increased by 36%.
The Royal Bank of Canada considers this strategy to be erroneous. Among the reasons for the slowdown in migration rates, the company's representatives name the increased load on the infrastructure (it may not be able to withstand it), as well as the anxiety of Canadians about the occupancy of universities by foreign students. However, the authors of the report consider these arguments as at most irrelevant and at least not comparable with the positive effect of immigration on the economy.
Royal Bank of Canada Conclusions
The presenters therefore conclude that the pause taken may be appropriate — and used for active infrastructure development. In the long term, however, Canada needs immigrants. And here's why:
- Even an annual immigrant intake of 1.3% of the population is not enough to stabilize the age structure of the population — the bank forecasts that about 2.1% will be needed.
- Many more personnel of various qualifications are needed to satisfy the domestic labor market.
What conclusion do the Royal Bank rapporteurs reach? Canada needs to be strategic in selecting immigrants — and temporary residents who often become future immigrants — with the strongest long-term economic prospects, including outside of highly educated areas.
There is also a need to address the problem of an unlimited number of temporary residents, not all of whom become permanent residents. According to the presenters, their continued growth could undermine support for permanent residents, who make a long-term contribution to the Canadian economy and should therefore be prioritized.
These steps will allow Canada to maintain the benefits of higher immigration levels and ultimately offset or mitigate the short-term costs.
