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Canadian Immigration May Not ‘Return To Normal’ For A Long Time: Economists

Immigration may not return to pre-pandemic normals anytime soon, and that could have an impact on Canada.
Migrant workers from Mexico maintain social distancing as they wait to be transported to Quebec farms after arriving at Trudeau Airport Tuesday April 14, 2020 in Montreal.
Migrant workers from Mexico maintain social distancing as they wait to be transported to Quebec farms after arriving at Trudeau Airport Tuesday April 14, 2020 in Montreal.

Canada is unlikely to meet its ambitious immigration target this year, and even after the pandemic ends, migration patterns may not return to what they were before COVID-19 hit, economic forecasts say.

That could hold back the country’s recovery, as well as the recoveries of other developed countries whose economies depend on migrants, recent economic reports warned.

In an effort to make up for lost time in the pandemic, the federal government increased its target to 401,000 immigrants for 2021, the highest level on record. But two new reports ― one from Royal Bank of Canada, the other from Capital Economics ― cast doubt on that goal.

Border restrictions will “remain in effect into the foreseeable future,” and coupled with quarantine measures, “travelling to Canada may not be feasible for many potential immigrants,” RBC economist Andrew Agopsowicz wrote.

For that reason, Agopsowicz expects 275,000 landed immigrants in Canada this year, and that’s only if “things return to normal” in the second half of the year.

Watch: Canada seeks immigration increase for post-pandemic recovery. Story continues below.

In 2020, Canada took in 184,000 new permanent residents, little more than half the target of 341,000, the RBC economist noted.

“Given lag times, we should expect this decline to impact levels at least into 2022,” Agopsowicz wrote in an email to HuffPost Canada.

For its part, the federal government remains confident it will meet its targets for the coming several years.

“In January 2021, we welcomed nearly 10 per cent more new permanent residents than in January 2020, when there was no pandemic,” a spokesperson for Immigration Canada said in an email exchange with HuffPost.

“Global migration has been upended by the pandemic. … Yet we’ve taken quick action and come a long way since the onset of the pandemic – providing additional resources where they are needed most, streamlining our processes and ramping systems back up. Thanks to these new measures… the volume of final decisions is approaching pre-pandemic levels.”

Immigration not what it used to be

But even past the pandemic, immigration may look different than it did before.

“There are strong signs that mobility will not return to previous levels for some time,” the Organization for Economic Co-operation and Development (OECD) said in a migration outlook last fall.

“This is due to weaker labour demand, persistent severe travel restrictions as well as the widespread use of teleworking among high-skilled workers and remote learning by students.”

Permanent residency applications to Canada dropped by more than 50 per cent in 2020, and while part of that has to do with the shutdown of visa processing centres around the world, it also has to do with “declining economic conditions in Canada,” Agopsowicz said.

Some economists ― such as Mikal Skuterud of the University of Waterloo ― have questioned whether a high immigration target makes sense at a time when Canada has lost a net 850,000 jobs over the past year. They fear the new arrivals will swell the ranks of the unemployed in the post-pandemic period.

Data shows migrants have taken some of the largest hits from the pandemic-related shutdowns.

“In all countries for which data are available, immigrants’ unemployment increased more, compared to their native-born peers,” the OECD wrote.

“The largest increases for immigrants were observed in Canada, Norway, Spain, Sweden and the United States. In Sweden, almost 60 per cent of the initial increase in unemployment fell on immigrants.”

The report notes that these migrants are often on the front lines of the COVID-19 pandemic effort. Among the 37 developed and developing member countries of the OECD, which includes Canada, migrants account for one in four doctors and one in six nurses.

Stunted growth

The decline in migration during the pandemic threatens the wellbeing not only of migrants, but of people in developing countries who depend on those migrants’ cash remittances. And it could have longer-term effects on the growth of developed countries, like Canada, which rely heavily on migrants.

In a report issued in December, the International Monetary Fund (IMF) estimated that, five years from now, the working-age population of Australia will be 2 per cent smaller than it otherwise would be because of the decline in immigration during the pandemic.

For Australia, which relies on immigration for economic growth much like Canada, that will mean an economy that is 1.2 to 1.7 per cent smaller, the IMF said.

That could have an impact particularly on things like government debt, which is easier to pay off if you have a growing population, and therefore a growing tax base.

Governments may have to shift their economic strategies to deal with the shortfall, the IMF report said.

“In addition to tackling the effects of a deep near-term recession, policymakers should swiftly embrace the challenging task of boosting potential output in the medium-term while ensuring that the recovery is inclusive and protects those most impacted by the crisis.”

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