Non-permanent residents are likely to be the primary driver of Canadian population growth moving forward, report suggests
Restrictions on the population of temporary workers and international students in Canada would be counterproductive to the national economy, as any such limits will likely exacerbate the impact of a potential recession, according to an analysis by Desjardins Securities.
These demographics are proving to be increasingly important to the Canadian financial system as the recent sharp increase in the national population can be largely attributed to a wave of non‑permanent residents like temporary foreign workers and students, Desjardins said.
“Assuming future immigration is in line with federal government plans, NPRs will be the primary driver of population growth going forward,” Desjardins noted.
As four million Canadians enter the homebuying pool between now and 2027, and immigration boosts potential buyers, the housing market is poised for resurgence. 📈
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 20, 2023
Read more: https://t.co/8WJFAQYBfg#MortgageIndustry #HousingMarket #HomeSales #Homebuyers #MortgageBroker pic.twitter.com/Xu5slezFYT
Citing data from the Bank of Canada, Desjardins said that growth in the country’s working-age population could average around 1.8% annually from 2023 through 2028, consistent with the steady entry of NPRs.
“Over the same period, we expect real and ‘trend’ or potential GDP growth to average 1.5% and 1.7%, respectively,” Desjardins said. “Closing the door to temporary newcomers would deepen the recession expected in 2024 and blunt the subsequent recovery. It would similarly lower potential GDP.”
Even though some slowdown in NPR admissions will be expected due to a moderating economy, TD warned that any sudden policy shifts could lead to a more pronounced decline in the number of newcomers.
“A sharp drop‑off could deepen the recession expected in early 2024,” TD said. “Caution is warranted on the part of policy makers to minimize the economic downside of slowing newcomer arrivals too quickly. But it’s not an easy balance to strike, as sustained high NPR admissions could further strain provincial finances and housing affordability.”
