Canada's Economic Future Hinges on Immigration, Reports Show

Economic report after economic report is making the case for Canada’s strategy to increase immigration figures and attract more talent.

The Royal Bank of Canada is the latest institution to have joined the chorus of voices saying immigration will be critical for the economic future of the country.

Though some sectors of the population argue immigration is to blame for the rising cost of rents and home prices, RBC in its latest report suggests newcomers will play a critical role in helping solve the problem.

That’s because, according to the bank, the construction sector is already facing a shortage of about 64,000 skilled workers – a gap so large that it won’t be filled through Canadian-born workers alone.

“As our population ages, pressure will only intensify to replace retiring workers,” RBC said. “Indeed, roughly 4.3 million baby boomers are set to reach retirement age by 2033. Canada’s population will not naturally grow fast enough to fill these gaps and in the absence of immigration, a shortfall of at least 400,000 workers will open up.

“This will come at a time when a booming population heightens demand for housing, healthcare and other goods and services.”

Other sectors expected to fill the pain as more workers reach retirement age include healthcare, which is already short about 164,000 workers, manufacturing and finance, among others, the bank said.

Already, immigration has helped reduce the number of vacancies, in turn supporting the Canadian economy, RBC added.

“Since peaking in May 2022, unfilled positions are down more than 200,000 (or 21%) across the country,” the study says.

In a recent report by TD Bank, economists agree newcomers will be needed to tackle the country’s economic challenges of the future.

The bank, however, also underscores the need for a balanced approach to ensure newcomers can also adapt and succeed in the country.

“To set the country up for success, policy needs to be balanced in ensuring an appropriate infrastructure is in place to bring the best out of workers and families,” the ban said. “This way the economic pie won’t just grow in size, but the quality will increase as well.”