In the Summer/Fall 2023 issue (Inroads 53), Anne Michèle Meggs, a retired senior official in the Quebec immigration ministry and a member of the Inroads editorial board, and Pierre Fortin, Professor Emeritus of Economics at the Université du Québec à Montréal and a Fellow of the Royal Society of Canada, exchanged views on recent developments in immigration and their possible implications. They were critical of the Century Initiative, which advocates a Canadian population of 100 million by the end of the century. On June 13, Inroads managing editor Bob Chodos received a response from the Chief Executive Officer of the Century Initiative, Lisa Lalande. Here we present Ms. Lalande’s letter along with a rejoinder by the authors.
Letter from Lisa Lalande
Dear Mr. Chodos:
I am writing in response to the article Are We Heading for 100 Million Canadians? in issue 53.
The conversation between Anne Michèle Meggs and Pierre Fortin starts with the untrue statement that “unplanned massive temporary immigration is consistent with the goal of the Century Initiative.”
The Century Initiative supports and advocates for responsible, planned growth and has recommended an immigration system based on permanent migration. We have never advocated for massive, temporary immigration, as our aim is to advance long-term economic and social prosperity for all.
Our recently released National Scorecard on Canada’s Growth and Prosperity clearly outlines this approach, and in our Key Insights and Actions one of the key recommendations is that: Canada must ensure that its immigration system is based on permanent immigration.
This was the first of several inaccurate references to the Century Initiative and statements on our website throughout the conversation.
For example – as our scorecard (with sources) outlines – projections for Canada’s GDP per capita in the years and decades ahead are low compared to peer countries. The OECD has projected that Canada’s annual GDP per capita growth rate will be 0.7 per cent between 2020 and 2030 while the OECD average projected growth rate over the same period is 1.3 per cent.
Supporting immigrants to move more quickly to employment that matches their skills and experience would help accelerate GDP per capita growth as Canada’s population grows. International research indicates that immigration can lead to increases in GDP per capita in advanced economies, and that the gains associated with immigration are shared broadly among the population.
I would welcome the opportunity to engage in a conversation or interview with yourself, Anne Michèle Meggs or Pierre Fortin to discuss our research and advocacy, but in the short term, would request that you correct the statement that we advocate for “massive temporary immigration,” which is simply untrue.
Thanks, and I look forward to hearing from you,
CEO, Century Initiative
The impact of immigration on GDP per capita, population aging and labour shortages is not what you think
A rejoinder to Lisa Lalande, by Anne Michèle Meggs and Pierre Fortin
We are grateful to the CEO of the Century Initiative, Lisa Lalande, for taking our criticism of the views of her organization on immigration in Inroads 53 seriously.¹
Any discussion of population growth and immigration in Canada must be based on three crucial facts. First, given that the natural increase in population arising from the excess of births over deaths is small and set to remain so for the coming decades, immigration is and will be the main driver of population growth in the foreseeable future.
Second, the fundamental identity of demographic analysis used by international organizations and national agencies like Statistics Canada is that in any given year the contribution of migration to population growth is the sum of permanent immigration (all admissions to permanent residency) and temporary immigration (the net change in nonpermanent residents during the year = new arrivals net of admissions to permanent residency and net of exits to outside of Canada), less net emigration.² Both permanent and temporary immigration – not only the permanent variety – add to the total population.
Third, in the past decade there has been a massive increase in temporary immigration, both in absolute levels and relative to permanent immigration. In the old days, most newcomers planning to settle in Canada arrived with permanent residency because they were required to apply for immigration from outside the country. Today, most people arriving from other countries do so on temporary visas and permits or as asylum seekers. The game has changed. And the change is deliberate policy of the federal government put in place largely to hasten the permanent immigration objectives.
Temporary immigration has become the dominant driver of population growth
Table 1 illustrates these facts by reporting the contributions of natural increase (births less deaths) and migration (both permanent and temporary immigration, less net emigration) to the total increase in Canada’s population in the two periods 2012–15 and 2016–19 and in 2022.
The first column of table 1 looks at the 2012–15 period because it came just before the federal Advisory Council on Economic Growth (ACEG) published its 2016 report. The council recommended that permanent immigration to Canada be increased by 50 per cent, from 300,000 in 2016 to 450,000 in 2021.³ This recommendation was hailed by the lobby group Century Initiative (CI, cofounded by the chair of ACEG, Dominic Barton, a business executive and diplomat) as being consistent with its own aspirational objective of growing the population of Canada to 100 million by 2100. The second column of table 1 bears on the 2016–19 period that followed publication of the ACEG report and preceded the pandemic. The last column gives migration details for the most recent year, 2022, which followed the pandemic.
Table 1 first shows that in the past ten years natural increase in population has trended down (from 127,000 to 43,000), and that net emigration was small and declining too (from 53,000 to 37,000). Second, permanent immigration increased by 67 per cent from 262,000 in 2012–15 to 437,000 in 2022. Third, temporary immigration followed an explosive path from an insignificant 25,000 in 2012–15 to a very large 608,000 in 2022, outnumbering permanent immigration by 40 per cent.⁴
The 2016 ACEG report understandably focused on permanent immigration, given that in previous years temporary immigration had been small and was not seen as a significant source of population growth. Despite the enormous growth in temporary immigration since 2016, up to this day CI has remained basically concerned with permanent immigration.
As Ms. Lalande emphasizes in her response to our exchange, one of the key recommendations of her group in 2023 is still that “Canada must ensure that its immigration system is based on permanent immigration.”⁵ In fact, if there had been zero temporary immigration instead of 607,782 in 2022, the permanent immigration level of 437,180 would have sustained an increase of 1.15 per cent in total population, given the net emigration of 37,405 and natural increase of 42,553.⁶ It is worth noting here that, if it was applied repeatedly to each year of the 78-year period 2023–2100, this annual increment of 1.15 per cent would ultimately yield a population of 96.6 million Canadians in 2100, not far from the CI goal of 100 million.⁷ This is consistent with Ms. Lalande’s focus on permanent immigration as the basic channel driving population growth toward CI’s end-of-century target.
The persistent exclusive focus of the Century Initiative and Immigration, Refugees and Citizenship Canada on permanent immigration is a serious mistake
The problem with the focus on permanent immigration as the exclusive source of population growth, though, is that it sidesteps the fact that positive temporary immigration (a net increase in nonpermanent residents) in a given year will increase the total population permanently unless it is offset by negative temporary immigration (a net decrease in nonpermanent residents) of the same order of magnitude in subsequent years. A common error is to view temporary immigration as having just a passing temporary effect on population growth. It is true that any given cohort of temporary immigrants does disappear once its members are admitted to permanent residency or leave Canada when their permits expire. However, the impact on total population will not disappear, but will continue to increase if this cohort of nonpermanent residents is replaced by larger and larger cohorts of new temporary immigrants in subsequent years.
This is exactly what happened after the publication of the ACEG report in 2016. The number of temporary immigrants increased continually every year except during the pandemic period 2020–21. The net increase in nonpermanent residents was 88,000 in 2016, 138,000 in 2017, 155,000 in 2018, 191,000 in 2019, and 608,000 in 2022. In this last year, the total population increase of 1,050,110 added 2.7 per cent to the beginning-of-2022 population of Canada. Formally, if this annual growth rate were to be sustained from 2023 to 2100, the population of Canada would reach 100 million in 2057 and 316 million in 2100.⁸
The steady growth rate of population that would bring Canada up to 100 million residents in 2100 from the beginning-of-2023 level of 39.6 million is 1.2 per cent per annum, which is less than half the 2022 actual growth rate of 2.7 per cent. Implementing the 1.2 per cent rate would require a huge drop from the 1,045,000 (437,000 permanent and 608,000 temporary) immigration total of 2022. Temporary immigration would have to go down to almost zero.
As mentioned above, the 2016 report of the Advisory Council on Economic Growth appointed by Finance Minister Bill Morneau and chaired by CI cofounder Dominic Barton suggested that the number of permanent immigrants to Canada be increased to 450,000 in 2021. The targets for permanent immigration stated in November 2022 by then–immigration minister Sean Fraser (465,000 in 2023, 485,000 in 2024 and 500,000 in 2025) are broadly consistent with this ACEG recommendation and with the immigration path leading to a Canadian population of 100 million in 2100 that CI is projecting in its 2023 National Scoreboard on Canada’s Growth and Prosperity. The CI path is solely based on permanent immigration and omits any current or future effect of temporary immigration on population growth. It has population growing at an average annual rate of 1.2 per cent per year leading to the 100 million target in 2100.⁹
Minister Fraser cautioned that his targets for permanent immigration were not meant to achieve the specific CI goal of 100 million for 2100 population.¹⁰ However, they are doing just that – and more, taking the effect of temporary immigration on population growth into account. Neither the immigration growth path projected by CI nor the official targets of Immigration, Refugees and Citizenship Canada (IRCC) for permanent immigration give any guidance about where total (permanent plus temporary) immigration is going to lead future population growth.
To sum up, we have stressed the elementary demographic fact that the annual growth rate of the total population is impacted not only by the addition of new permanent immigrants, but also by the net change in nonpermanent residents during the year (a.k.a. temporary immigration). We have also emphasized that temporary immigration was the dominant driver of population growth in 2022. It is therefore a serious mistake to project future population growth based on future permanent immigration levels alone.
CI should clarify its views on how IRCC should deal with the increasing disconnect between population growth and permanent immigration
One objective of our conversation in Inroads 53 was to expose the administrative mess that characterizes the treatment of temporary immigration by IRCC. The idea of prioritizing temporary migrants with Canadian experience or a Canadian diploma for permanent residency – a “two-step” process – is not new. On its face it may seem like a good idea, but in our conversation we underlined the dangers related to the current system, particularly for those living with a precarious temporary status. Nevertheless, IRCC has made it the commanding path toward permanent residency, instead of the ranking (or “points”) system used to assess skills and earnings potential in the old days.
IRCC is all out to increase immigration levels at the expense of the skill levels of new immigrants. There is no upper bound set on the number of people accepted each year as nonpermanent residents. The number is, to a large extent, determined by the free flow of whatever the demand from postsecondary institutions and employers turns out to be. This has led to a ballooning number of applications, huge administrative backlogs, lower acceptance standards, a greater risk of precarity or mistreatment for low-skilled temporary workers, and rising frustration among holders of temporary permits, who are seeing their applications marred by impossible delays. Not to mention the overwhelming challenges these newcomers, like so many Canadians, have in finding affordable housing and daycare. The system is quantitatively out of control and qualitatively deteriorating.
In our conversation, we stated that “this unplanned massive temporary immigration is consistent with the goal of the Century Initiative.” In her response, Ms. Lalande forcefully declares that CI does not advocate massive temporary immigration. She requests that we correct our assertion to the contrary.
We are happy to address the misunderstanding. In stating that IRCC’s unplanned massive temporary immigration was consistent with the goal of CI, we simply intended to point out that IRCC was pursuing the same goal – more immigration and a bigger Canada – as CI was recommending. Indeed, the International Education Strategy of the federal government is proudly geared toward immigration and economic goals.
We did not mean that CI was backing the chaotic management and uncapped temporary immigration in which IRCC is bogged down. However, CI gives no specific guidance about how IRCC should deal with the increasing disconnect between the rapidly accelerating population growth and the much slower-paced trend in permanent immigration. We need more than a limited recognition that “challenges persist.” A detailed clarifying discussion of these matters by CI would be welcome.
In-depth reviews of international research by reputed Canadian economists have shown that immigration does not lead to increases in GDP per capita
In her response to our conversation, Ms. Lalande also complains that we did not refer to the 2021 OECD projection that the potential growth rate of Canada’s GDP per capita will be 0.7 per cent between 2020 and 2030 while the projection for the average OECD country is 1.3 per cent.¹¹ She considers the mediocre relative performance projected for Canada as additional motivation for the country to increase immigration, given her conviction that “international research indicates that immigration can lead to increases in GDP per capita in advanced economies.”
We were aware of the existence of the OECD results when we prepared our conversation, but we did not refer to them for two reasons. First, long-term projections of this kind are too often subject to large errors. Second, and more importantly, Ms. Lalande’s assertion that immigration can lead to increases in GDP per capita according to international research is wrong.
A larger population entails a larger total GDP. With more workers, a country can produce more goods and services and increase national income in the aggregate. A greater total GDP also allows a country to wield a greater degree of global influence. However, a greater population size and a greater degree of global influence do not necessarily support the basic purpose of economic growth, which is to enhance the average material well-being of the country’s residents. That is, its GDP per capita will not necessarily be larger. Here are various pieces of evidence that corroborate this assertion and contradict Ms. Lalande’s statement.
Our exchange in Inroads 53 reported that the static cross-country correlation between the level of GDP per capita and the size of population among 25 advanced OECD economies was almost exactly zero in the prepandemic year 2019. This negligible static correlation between GDP per capita and population size across countries can be extended to long-term growth dynamics.
Based on data from the International Monetary Fund and the United Nations, it is possible to estimate the effects of several potential determinants of the cumulative growth of GDP per capita among the same OECD25 group of countries over the 30-year period 1989–2019. In conformity with the research literature, we find that the initial (1989) level of GDP per capita and the average investment rate are significant determinants of the cumulative growth of GDP per capita, but that the effects of the cumulative growth of total population and the average net migration rate are jointly statistically negligible.¹² In other words, the proposition that a higher growth rate of population (whether coming from local or immigrant sources) augments the growth rate of GDP per capita over the long term is not sustained by the data of the last 30 years in the advanced economies of the OECD.
Our conversation also referred to in-depth reviews of international research on immigration by two teams of Canadian economists who are reputed in this area (Boudarbat-Grenier and Riddell-Green-Worswick).¹³ Their common conclusion is the same as above: immigration and GDP per capita are uncorrelated in advanced economies. Riddell, Green and Worswick put it starkly as follows: “What a large body of evidence indicates is that immigration is neither good nor bad for the economy, as assessed by its impact on the living standards of current citizens … There is no evidence that substantially increased immigration will lead to increased growth of a type that shows up in positive impacts on wages and employment of those already here.”
These two reviews of the published literature fully contradict the assertion that international research indicates that immigration can lead to increases in GDP per capita in advanced economies.
There is more. In June 2023, Matthew Doyle (University of Waterloo), Mikal Skuterud (also of Waterloo) and Christopher Worswick put out a review of the economics of immigration (with many applications to Canada).¹⁴ It helps to clarify why international research finds that more immigration is unlikely to increase GDP per capita.
In the short term, more immigration dilutes the amount of productive equipment available per worker. Their statistical analysis of several decades of Canadian macrodata shows accordingly that there is “no evidence that higher immigration rates can be expected to boost growth rates in per capita GDP in the short run.” In the medium term, they point out that ever since Canada’s immigration rate began to climb in 2014, investment per worker has followed a downward trend that has been “unable to mitigate the adverse effects of increased immigration rates on average economic living standards in the population.” In the long term, they concur with Boudarbat-Grenier and Riddell-Green-Worswick that international research is uncertain about the impact of immigration on multifactor productivity.
They show contrariwise that in Canada the large-scale increase in economic immigration, the shift in admissions away from the points system and toward an employer nomination system, and the concentration of labour shortages in low-skill jobs have together led to mean earnings that are lower for immigrants than for the rest of the population. The likely outcome is a lower average level of GDP per capita.
More immigration is not an effective means of attenuating the aging of Canada’s population or resolving the problem of economy-wide labour shortages
Our conversation in Inroads 53 rejected a few other false beliefs about the economic effects of increased immigration. One of them is that immigration would be a means of rebalancing Canada’s age distribution. We referred to a study by Parisa Mahboubi and Bill Robson as having demonstrated that more immigration would be of little consequence for the aging of the Canadian population.¹⁵ Riddell-Green-Worswick and Doyle-Skuterud-Worswick both agree and point out that the age structure of immigrants is too varied and that immigrants age too. They conclude that immigration is not a feasible means of substantially altering Canada’s age structure.
Another false belief is that immigration can help alleviate the problem of economy-wide labour shortages. It does not. Immigration is certainly helpful in expanding the supply of human resources in specific sectoral or regional markets struck by high job vacancy rates. But as the newcomers and their employers spend their additional income on housing and other consumption and investment goods, the pressure on demand for labour is strengthened in other sectors and regions.
It may even more than offset the initial expansion of supply. We are currently seeing it add stress to the current housing crisis in Canada. The final impact of immigration in the aggregate may not be to reduce labour shortages, but to redistribute them across sectors and regions. Our conversation adduced evidence that this is indeed the case in Canada and in the OECD25 group of countries. The belief that immigration is an economy-wide solution for labour shortages is, simply put, a fallacy of composition.
Maintaining Canada’s net migration rate at the very high 2022 level risks fuelling a destructive anti-immigration movement as in the United States and Europe
Finally, while we fully agree with CI that “public support for immigration is an essential condition for Canada to effectively attract and retain immigrants,” we do not share its optimistic view that this public support “continues to increase among Canadians.”¹⁶ A February 2022 Environics online survey of 5,461 Canadians found that 52 per cent of respondents giving an opinion thought there was “too much immigration to Canada.”¹⁷ Similarly, a November 2022 Léger–Canadian Press online survey of 1,537 Canadians found that 58 per cent of respondents giving an opinion thought the government plan to welcome up to 500,000 immigrants to Canada in 2025 will admit too many immigrants to Canada.¹⁸
Furthermore, an August 2023 Nanos hybrid telephone and online survey of 1,081 Canadians indicated that respondents were “most likely to say the rising cost of living should be the top priority of the House of Commons this fall” and that 72 per cent of those giving an opinion thought that the plan “to increase the annual target of immigrants from 465,000 to 500,000 by 2025” will have a negative impact on the cost of housing.¹⁹
In 2015–19, Canada’s net migration rate of 1.0 per cent was three times as high as the average rate of 0.35 per cent for the OECD25 group of countries.²⁰ But at 2.6 per cent in 2022, the Canadian rate shot up to seven times this OECD25 0.35 per cent average rate for 2015–19. The relevant question here is how Canadians will react if the large 2022 increase in the country’s net migration rate is maintained in years to come, given that a majority already thinks that there is too much immigration to Canada.
Fifteen years ago, a widely cited study of 41 U.S. cities by political scientist Robert Putnam of Harvard University showed that “in ethnically diverse neighbourhoods residents of all races tend to ‘hunker down’ trust (even of one’s own race) is lower, altruism and community cooperation rarer, friends fewer.”²¹ In other words, in the short run, immigration and diversity would slow down the development of social capital. Fortunately, as Putnam himself argued, people can eventually get over this difficulty, but only if their short-term capacity to welcome immigrants is not exceeded, if the newcomers are given time and resources to integrate, and if the whole of society is allowed enough time to build a new common identity.
Recent events in Europe and the United States and the Putnam findings sound a warning for Canada’s current immigration policy. If Canada’s net migration rate continues at the 2022 level of 2.6 per cent, the country will risk being hit by a hard and destructive anti-immigration movement as in the United States and Europe.
In summary, we feel it is a grave mistake to focus exclusively on the impact of permanent immigration on population growth and forget about the even larger impact of temporary immigration. Not only is massive low-wage temporary immigration a monstrous policy blunder, but its management by Immigration, Refugees and Citizenship Canada has led to an administrative mess as well.
The three-pronged belief that immigration will lead to increases in GDP per capita, make a dent in the aging of population and reduce economy-wide labour shortages is wrong. The combination of sharply accelerating population growth fuelled by rising immigration and decreasing public support for immigration in Canada risks generating the kind of destructive anti-immigration movement here that already exists in the United States and Europe.
For family and professional reasons, the two of us are sold to the cause of immigration, although our main motivation is not economic, except insofar as economic integration is key to the integration process in general. Rather, we recognize Canada’s responsibility with respect to the increasing forced migration in the world, its attraction as a safe and modern society and the richness that new cultures and their ideas and perspectives bring with them.
We do not know exactly what the optimal level of immigration is for Canada, but until we have figured it out, we know for sure (1) that it is critical to bring it down significantly and (2) that no realignment on immigration policy, whether it be slowing the pace of arrivals or getting back to selecting highly skilled immigrants, will have any effect if it does not include temporary immigration.
On our knees, we beg for moderation and balance.
¹ Anne Michèle Meggs and Pierre Fortin, Are we Heading for 100 Million Canadians?, Inroads 53 (Summer/Fall 2023).
² Net emigration here is defined as the sum of emigrants and net temporary emigration, less returning emigrants. See Canada’s population estimates, first quarter 2023.
³ Advisory Council on Economic Growth, Attracting the Talent Canada Needs through Immigration (Ottawa: Department of Finance, October 2016).
⁴ At the time of writing (August 2023), 607,782 was the official count of temporary immigrants by Statistics Canada for the calendar year 2022. But most analysts think that even this large number is a significant undercount. In fact, Statistics Canada has announced it will soon publish new data based on a “revised methodology.”
⁵ Century Initiative, Seizing our Advantage. Key Insights and Actions, in National Scoreboard on Canada’s Growth and Prosperity (Toronto: Author, May 2023).
⁶ Since (437,180 – 37,405 + 42,553)/38.5 x 106 = 1.15%, where 38.5 million is the estimated beginning-of-2022 population of Canada.
⁷ Since 39.6 x 106 x (1.0115)78 = 96.6 million, where 39.6 million is the estimated beginning-of-2023 population of Canada.
⁸ Solving 100 = 39.6 x (1.027)t gives t = 34.8 years past 2022, and 39.6 x (1.027)78 = 316.4 million in 2100.
¹¹ The OECD reference is Yvan Guillemette and David Turner, The Long Games: Fiscal Outlooks to 2060 Underline Need for Structural Reform, OECD Economic Policy Paper No. 29 (Paris: OECD, October 2021).
¹² The statistical results are available from the authors on request.
¹³ Brahim Boudarbat and Gilles Grenier, L’impact de l’immigration sur la dynamique économique du Québec, Report to the Quebec Ministry of Immigration, November 2014; W. Craig Riddell, Christopher Worswick and David Green, “How Does Increasing Immigration Affect the Economy?”, Policy Options, November 2016.
¹⁴ Matthew Doyle, Mikal Skuterud and Christopher Worswick, “The Economics of Canadian Immigration Levels,” Working Paper Series #58, Canadian Labour Economics Forum, June 2023.
¹⁵ Parisa Mahboubi and William Robson, “Inflated Expectations: More Immigrants Can’t Solve Canada’s Aging Problem on Their Own,” E-Brief (Toronto: C.D. Howe Institute, 2018).
¹⁶ Century Initiative, National Scoreboard on Canada’s Growth and Prosperity.
¹⁷ Environics, Confederation of Tomorrow 2022 Survey, Detailed Data Tables (Toronto, February 2022). 52% agree out of 92% giving an opinion (= 48% overall). These results contrast with those of the Focus Canada 2022 Environics-Century Initiative telephone survey of 2,000 Canadians, according to which 28% of respondents giving an opinion thought there was too much immigration. We dismiss this Focus Canada telephone survey. Its 28% “too-much-immigration” percentage is unbelievably smaller than the consistent above-50% responses of the other two surveys. Respondents in the Focus Canada telephone survey were likely embarrassed to sound negative about immigration, and hence to answer that they “somewhat agree” instead of “somewhat disagree,” when interacting with a live interviewer making the blunt statement with no context that “there is too much immigration.”
¹⁸ Léger and Canadian Press, “Canada’s Immigration Plan,” North American Tracker (Montreal, November 2022). 58% agree out of 84% giving an opinion (= 49% overall).
¹⁹ Nanos and Bloomberg, 2023 Reports. National Survey, August 8, 2023. 72% agree or agree somewhat out of 95% giving an opinion (= 68% overall).
²⁰ Migration data here are from the International Organization for Migration, a United Nations group. They include temporary immigration.
²¹ Robert Putnam, “E Pluribus Unum: Diversity and Community in the Twenty-First Century: The 2006 Johan Skytte Prize Lecture,” Scandinavian Political Studies, Vol. 30, No. 2 (June 2007), pp. 137–74. The Skytte is widely recognized as the “Nobel Prize” in political science.