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Recent immigrants more likely to be employed than those born in Canada

Posted on: March 12, 2023

Over the next three years, Canada will aim to welcome roughly 1.45 million immigrants; with 60% projected to be through economic class programs.

This wave of newcomers is projected to have multiple positive effects for the Canadian economy, and society—some of which can already be seen, as Desjardins’ new study on the impact of federal immigration targets reveals.

For instance, new immigrants are now more likely to be employed than their peers born in Canada. This is a recent phenomenon that comes down to the convergence of two major trends: A noted increase in the employment rate of new immigrants starting in 2016; and the gradual decline in employment rate of people born in Canada.

This effect draws on demographic make-ups of each group. 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. On the other end, Canadians have an aging population, with a consistent group of retirees exiting the workforce every year (a key reason for immigration to occur in the first place). In this light, the wider effects that immigration will have on the economy are pertinent.

New immigrants will change the demographic of Canada

Immigration is at the heart of population growth for Canada. The bulk of new immigrants are economic and of core-working age. With the huge influx expected in the next 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.

It is expected that the influx of core aged immigrants will not just bring the societal benefits of raising Canada’s population up to self-sustaining levels (i.e.: a birthrate of at least two per household)—but also bring a host of economic advantages to the country.

New immigrants are expected to boost potential GDP growth

New immigrants are more tied to the labour force. Many of them have jobs even before entering the country, and admitted for human capital factors that enable them to effectively contribute to the workforce.

As such immigration is predicted to raise Canada’s GDP (Gross Domestic Product) per capita, as labour input is expected to increase with immigration. GDP is the total monetary value of all the finished goods and services produced within a country’s borders. 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.

The arrival of newcomers is expected to further help bolster the supply side economy, and reduce inflationary pressures on the Canadian economy.

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