CIBC World Markets deputy chief economist Benjamin Tal says Canada’s decision to not up its immigration targets is a “step in the right direction”.
Economists are also urging Prime Minister Justin Trudeau’s government to say how they are going to deal with the steep rise in temporary resident numbers.
Canada let in upwards of 400,000 PRs in 2023, along with 700,000 temporary residents, foreigners with a work/study permit, or those with refugee status, as per a Financial Post story by Naimul Karim.
“The government has made some steps in signalling they hear and understand the current challenges of Canada’s immigration systems,” said Rebekah Young, an economist at the Bank of Nova Scotia.
“But holding the 2026 target flat is mostly just signalling at this point. The big numbers come from non-permanent streams and we don’t have a great line of sight where these are going.”
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The rising prices and housing crisis have triggered economists to inquire about the federal government’s plan to accommodate hundreds of thousands more newcomers to Canada.
“People realize that housing is a major issue,” Tal said.
“The next elections will be in part about housing. I think that all parties, including the government, recognize that this is a major issue on the mind of Canadians.”
Last year, Canada decided to plateau its immigration levels targets at 500,000 for 2025 and 2026. However, although this addresses the concern relating to housing in part, Canada is still reliant on immigrants to replace its aging population, according to Cynthia Leach, who is assistant chief economist at RBC.
She did call the pause appropriate, citing the annual immigration intake’s jump to 1.3 per cent of the population in the last few years compared to the average 0.8 per cent.
For temporary numbers, she held a similar view, saying that international students are good PRs, but enhance pressure on the infrastructure in the short term.
This makes the pathway to PR more difficult for students and harder for Canada’s economy to benefit in the long term.
Temporary students, like permanent immigrants to Canada, help the economy by filling labor shortages and participating in post-secondary education.
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Canada immigration minister Marc Miller announced on March 24 that he intends to conduct domestic draws for temporary residents who are already in Canada and are candidates for PR.
“As part of our efforts for temporary residents to transition to permanent residency, we will have more domestic draws for us (the federal government) and ask provinces and territories taking part in the Provincial Nominee Program to do the same with their allocations,” Miller said.
However, Canada is limiting the number of temporary residents being let into the country by 20 per cent over the next three years, which, as per Desjardins economists, may offset the economic benefits of any Bank of Canada rate cuts.