Impact of Immigrants on the Canadian Economy Luke Hong

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Impact of Immigrants on the Canadian Economy

Luke Hong

The Canadian population is largely composed of immigrants from foreign nations, each with different purposes. Some came to work, some to live with their families, and some to avoid persecution from their countries’ governments and to take refuge. In fact, Canada allows 7.5 immigrants per thousand people (Green, 2012), greatly contributing to the overall growth of the population. The recent changes in immigration policy have definitely played its part in reducing the number of overflowing immigrants. However, Canada is still one of the most general countries among the developed countries in terms of accepting new residents, and it is the undeniable fact that the economic consumption and participation by the immigrants greatly contribute to the Canadian economy in various ways such as promoting diversity which brings unexpected benefits, and increasing the labour population, including skilled, experienced workers which promote the quality of the labour market. These contributions all result in increasing the total GDP and output, lowering the unemployment rate, and driving the Canadian economy forward. In simpler words, despite the current situation where the number of immigrants is noticeably decreasing, the Canadian government should accept more or maintain the current level of accepting new residents in order to expand the economy or at least to maintain current level.

To begin with, Canada has created itself a pool of diverse population that is largely composed of people from different ethnic groups that have different cultures and specialties. According to statistics Canada, Canada has nearly 6.2 million foreign-born people from over 200 different countries. 58 percent of the above number or 1.1 million were born in Asia and Middle Eastern countries such as China, Korea, Japan, and Iran. Others were mostly from Europe and Russia which is 16 percent, Africa and Central/South America each 11 percent. This existing diversity is one of the key advantages that Canada has. The infusion of different cultures allows innovative and creative ideas, know-hows, and different perspectives which can be valued more than capital goods. This can be witnessed starting from politicians to CEOs. Politicians with different backgrounds and ideas gather around to make vital decisions to promote and maximize the economic security of its citizens. For instance, according to the Conference Board of Canada, immigrants make up 35 percent of university research chairs in Canada, which is 15 percent above the national rate. American author and professor, Richard Florida described immigrants as the “creative class.” The term was used when he was trying to explain how cities became successful thus creating a “magnet” for the talented. He emphasized that the key element and takes a major part in creating the creative class was immigration.

Moreover, studies have shown that immigrants are an important boost to Canada’s international trade with other nations. Canada has shown to have strong ties with countries that have provided Canada large number of new residents. The same study that was conducted by the Conference Board of Canada has proven that a 1 percent increase in immigration from a certain country will result in 0.1 percent increase in value of Canadian exports and 0.2 percent increase in value of imports. Like such, the market enjoys more varied products with increased values thanks to the diversity brought by the intake of immigrants. The accumulation of knowledge armed with various perspectives, ideas and experiences, added with the positive impact on the international trade market, Canada’s economy will remain strong and stable as long as its dependence on immigrants does not fade away.

Another major benefit that immigrants bring to the domestic economy is the existence of an abundant labour population. In 2011 alone, Canada has accepted 248,748 new permanent residents (, with the number excluding temporary residents and exchange students. This number is about two thirds of the annual birth rate, which was 377,636 in 2011 ( The number is twice more than what the U.S. receives each year. It makes economical sense to state that the population and GDP has a direct relationship. In simpler words, when the population of a country increases, total domestic output also increases as well. Canada is not an exception. According to a study conducted by Professor Dungan, increase of 100,000 immigrants will lead to a 2.3 percent increase in real GDP. The good news is that with the current population marked at 35 million, it is estimated that it will penetrate the 40 million levels by the time of 2026 under circumstance that new immigrants will continue to be accepted, thus expanding the national output.

The benefits do not end there. The key solution to the problem brought up by Prime Minister Steven Harper lies on immigrants as well. Harper emphasized the desperate need for well-trained workers within the Canadian market. The government has already realized the problem and has enacted a solution- adjusting the immigration system. The government plans to increase the number of Canadians to 50,000 to 53,000 by 2013 to meet the need for workers. People with high education standards and experiences are required so that the health of the economy is not put at stake. As mentioned previously, the solution lies within not in the future education system, but in immigrants. Canadian students scored 524, 527, and 529 in reading, math and science of the PISA scale- ranking 6th. On the other hand, China scored 556, 600, and 575 followed by South Korean students who scored 539, 546, and 538. The data shown above are solid evidences of the quality of immigrants including students. Over 240,000 temporary residents including international students are admitted and welcomed into the country. Although temporary, their brief contributions have had and will have significant impact on the overall economy. The fees the international students pay in order to attend public/private schools are good example of such outlook. Furthermore, the Conference Board of Canada has announced that the number of residents flowing into the nation has to be increased from the current level of 250,000 to 360,000 in order to meet the ever-growing demands of the labour market. It is true that it is an irony that unemployment thrives while there is a need for workers. However, it is also true that immigrants acquire the specific skills that the various markets need. Through immigration Canada will increase the total output, solve its problem of shortage of skilled workers and go a step further; sustain a healthy state of the domestic labour force.

The Canadian economy has been and will continue to be benefitted from its residents from foreign nations, for they create a multicultural society with variety of different ideas and positively impact the Canadian labour force. However, the future situation, assuming the current situation will continue, does not seem so bright. It is a fact that the number of immigrants accepted into the country has sharply decreased after its peak in the 20th century and has been continuing to decrease since then. The potential problem for this may be in stronger regulations in immigration policies. It is also a fact that more percentage of immigrants contributes less to the overall economy. In fact, majority of the immigrants who have just arrived in Canada end up being in the lower half of the population in terms of economic stability. So does that mean Canada should stop welcoming new Canadians? No- statistics, data, arguments, and ideas mentioned previously from the introduction to the second last paragraph have all clearly outlined the positive impacts of immigrants. It is undeniable that immigrants are vital part of the Canadian economy and society, and the solution to improve the current state still remains unknown. Perhaps putting less burden and requirements on immigration policies will offer potential solution, or it may not. But the fact that immigrants greatly promote the Canadian economy and bring positive results remains firm, and will not change under any circumstances.


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