Economist warned Canada against restricting immigration flows

Jimmy Jean, chief economist for the Desjardins Group credit co-op movement, warned that seriously cutting immigration in Canada to ease the housing crisis could be a misguided approach that could ultimately hurt the economy.

During an economic conference hosted by CFA Montréal, he expressed his position:

"If we just reduce the levels, all that will happen is there will be less whining, if you like, but we’re not going to solve a quarter of the problem."

Jean emphasized that the current problem is not so much an excessive influx of immigrants, but rather a shortage of foreign workers in the construction industry, where there is a labor shortage.

Discussions around immigration policy have become increasingly relevant in Canada amidst the housing shortage. Jean expressed concerns about the current trend in an interview, stating, "I’m worried that the pendulum is swinging too far the other way."

He reinforced the importance of immigration by citing economic studies:

"I think we have a very strong consensus in Canada and Quebec historically on the benefits of immigration, and this has been documented by economic research. So there is a reason why we have this strategy in place."

As an example, he cited Hydro-Québec's investment plans, which suggest the need for 35,000 construction workers.

Jean emphasized that we need to think more about long-term goals and think about ambition, because sooner or later this issue will come up again. In the context of Canada's immigration debate, he noted its balance, adding, "We’re not like Donald Trump saying that immigration is poisoning the nation’s blood."

In front of financial experts, Jean also emphasized the positive impact of immigration on the economy in 2023, arguing that it was immigration that prevented a recession in Canada. At the same time, he expressed skepticism about automation as a one-size-fits-all solution to labor shortages, as it will not help all industries.