Reports

July 5, 2023

By the numbers: What the immigration target increase means for Canada and Alberta

Immigration is important to the culture, economy, and makeup of Canada and Alberta. But changes need to be made to our existing system to ensure it is a lasting source of strength.

This commentary is the first in a series of a larger body of work on immigration, with a focus on the role of immigration in economic growth. Our goal is to inform a strategy and process for immigration that is not just numbers-driven but prosperity-driven.

Read more about our Prosperity-Driven Immigration project here.

TL;DR: Canada is rapidly building its workforce of tomorrow, through its immigration policies today.

  • In 2022, the federal government announced a massive increase in immigration targets to 500,000 new residents in 2025, 65% higher than recent levels.
  • This policy change will lead to the fastest population growth Canada has seen in 50 years and will transform the workforce. Immigrants will account for an estimated 37% of Canada’s labour force and as much as 41% of Alberta’s by 2036.
  • Even with high immigration numbers, many employers continue to struggle to find the right workers. And at the same time, many immigrants find themselves un- or under-employed.

In 2022, the federal government announced a massive increase in immigration targets. Between now and 2025, Canada is hoping to add nearly 1.5 million new residents from other countries.

The reason behind the target increase, as stated by the federal government, is to help businesses struggling to find workers in the midst of a strong economic recovery from COVID. However, a plan to increase immigration to Canada has long been in the works.

Big numbers can be hard to put into perspective. But the planned increase is huge, both in comparison to our own recent history, as well as current immigration levels in other countries.

COVID significantly disrupted global migration trends through delayed movement followed by a wave of catch-up. In the years just before then Canada welcomed about 300,000 immigrants per year. The federal government’s new target would amount to an increase of around 200k—or 65%—more immigrants each year. To put this in perspective, the country has never seen this many new immigrants in a single year since Confederation.

Of course, Canada has grown since then, so the total number of immigrants doesn’t matter as much as their share relative to the current population. But even in terms of immigration rates, Canada’s proposed increase is an anomaly. Immigration has not been at such a high level since 1957. And that was an unusual spike—a response to humanitarian need in the aftermath of the Hungarian Revolution—rather than a planned increase in targets.

Likewise, Canada welcomes more immigrants than most other countries. The recent policy change brings Canada’s global rankings—which were already high—up even further.

Pre-COVID, Canada ranked 15th in the world in terms of its immigration rate and 8th in terms of the total number of immigrants welcomed. Assuming nothing changes elsewhere, with its planned increase, Canada would rank 12th in terms of immigration levels and would tie with the UK for 6th in absolute numbers. In other words, only five countries in the entire world will welcome more immigrants.

However, there are signs that Canada is not the only rich country looking to attract more immigrants. Many others are following suit, expanding existing immigration programs or introducing new ones. The world’s foreign-born population is growing faster than ever before.

To be sure, part of the global immigration surge is because of a backlog of movement postponed by COVID—a factor that will fade with time.  Policy changes, however, will not. Higher levels of global immigration could be here to stay.

Population Growth

Regardless of the intended aim—which we will explore more in future work—this increase will have a profound impact on Canada and Alberta’s population and labour force, in terms of both their growth and composition.

In fact, immigration will continue to be the dominant driver of population growth in Canada. In the absence of immigration, Canada’s population would barely be growing. By contrast, with these immigration targets, our population will be increasing at among the fastest rates we’ve seen in 50 years.

Population projections published in August of 2022 show net immigration (the number coming to minus the number leaving Canada) will account for 90% or more of Canada’s population growth over the next few decades. Considering this work was done before immigration targets were increased, we can assume this number is now pushing 100%.  

Immigrants currently represent 23% of Canada’s population—the highest portion since Confederation and the highest of the G7. By 2036, this share will be closer to 30%.

Likewise, immigration will be a big growth driver of Alberta’s population. Immigration could account for as much as 65% of the province’s population growth over the next couple of decades. This share is significant, but lower than the national average—largely because birth rates in the province are higher, and individuals are increasingly moving to Alberta from other provinces, a trend expected to continue.

This means immigrants will grow from representing 23% of Alberta’s population today to as high as 40% by 2046.

Using the recent provincial projection for population growth as a baseline, a 25 year projection published in July 2021

Using the same baseline projections.

Labour Force Growth

Many of these new immigrants will work for a Canadian business or start their own.

That said, not all will be working. Many children and partners come as dependents. And grandparents are often sponsored but no longer working. As well, some immigrants may be looking to work but find it takes time to settle and find a job. This is especially true in the case of refugees who face additional challenges in accessing services and securing housing and work.

If similar to recent trends, roughly 83% of new immigrants will be of working age (i.e., 15 years or older); 66% of those will be in the labour force (either working or actively looking for work); and 94% of that sub-group will be employed. All told, this means that around 747k, or 50%, of the 1.5 million new residents will be working. In other words, for every one immigrant that is working, one is not. Similarly, this number will be around 55% in Alberta.

Though only a portion of all new immigrants will be working, they will ultimately drive growth in the labour force. As many Canadians hang up their spurs in retirement, immigration will not only arrest what would otherwise be a decline in labour supply but will drive growth of slightly less than 1% per year. That’s slower than the 1 – 1.5% growth we’ve seen over the last few decades, but it’s still growth nonetheless.

As a result, a growing share of Canada’s workforce will be foreign-born. Already, immigrants account for 27% of the Canadian labour force. And even before the new immigration targets were announced, Canada’s share was expected to increase to 34% by 2036. The bump in targets, however, will likely bring this closer to 37%

No projections are available provincially, but more regional splits are. These show that, under the old target, immigrants were expected to account for 43% of the Alberta labour force in the province’s biggest cities. With the new targets in play, this number could be closer to 45%. Since immigrants tend to move to urban areas, they will make up a smaller portion of the workforce beyond the big cities, accounting for closer to 20%.

All told, our own estimates suggest immigrants could represent between 36% and 41% of Alberta’s overall labour force, depending on other important factors like the number of folks moving from other provinces.

Based on Statistics Canada’s high growth scenario

BCA estimates

Conclusion

Regardless of exact numbers, immigrants are already a cornerstone of the Canadian workforce and will be even more so in the future. In essence, Canada is building its workforce of tomorrow, through its immigration policies today.

But that doesn’t mean everything is going well. Even with high immigration numbers, many employers continue to struggle to find the right workers. And at the same time, many immigrants find themselves un- or under-employed. Something is not working.

Given the pace and scale of change, the stakes are high. For policy to not just be numbers-driven, but prosperity-driven, Canada has some work to do—and quickly. Prioritizing those most poised for success—with valuable skills that businesses need. Supporting individuals upon landing. And limiting the consequences of high and growing targets. These are the three key themes we will explore in greater depth in future work. 

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