Population growth props up economy but puts strain on infrastructure and housing
Canada's population growth reached a new high in 2023, fuelled by robust immigration that intensified pressures on the government to re-evaluate its ambitious intake targets.
The country added 1.3 million people, growing at an annual pace of 3.2% – the fastest rate since 1957, Bloomberg reported, citing data from Statistics Canada. The population is rapidly approaching 41 million, a milestone reached just nine months after surpassing 40 million in June.
This surge, equivalent to the entire population of Estonia, places Canada among the world's fastest-growing countries, behind only a few African countries with high fertility rates.
Immigration: The key driver
International migration, primarily non-permanent residents like foreign workers and students, accounted for most of this growth. Only 2.4% of the increase came from net births.
In 2023, Canada added 471,771 permanent residents and over 800,000 temporary immigrants. An estimated 2.7 million temporary residents were living in Canada as of January 1st.
While immigration has bolstered the Canadian economy, it has also strained infrastructure, exacerbated housing shortages, and contributed to rising rents. Public concern over the impacts on quality of life has prompted the government to scale back its immigration targets for the future.
Read more: Migration limits to weigh down on the Canadian economy
Statistics Canada also released data showing a tripling of temporary foreign workers in agriculture between 2005 and 2020. However, many of these workers eventually transition to different industries, highlighting a retention challenge for the agriculture sector.
“Low retention rates imply that even if temporary foreign workers in primary agriculture receive permanent resident status, this may not solve the problem of chronic labour shortages faced by this sector,” the agency said.
Policy shift in 2024
Economists predict a slowdown in population growth for 2023 due to new restrictions on temporary residents and international students. This shift responds to concerns that the rapid influx of newcomers has strained infrastructure, exacerbated housing shortages, and contributed to rising living costs.
The data also revealed that around 333,000 Canadians moved between provinces last year, the second-highest level since the 1990s. Alberta saw the largest net provincial migration gain, while Ontario lost the greatest number of residents.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
