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Bloomberg
In the early days of Canada’s response to the coronavirus, before the crisis captured the full attention of Prime Minister Justin Trudeau’s government, it was still business as usual on at least one front: immigration.
On March 12, the day before the Canadian parliament was suspended on concern about the spread of Covid-19, Trudeau’s immigration minister, Marco Mendicino, unveiled plans to hike immigration levels over the next three years. He cited a growing labour
shortage.
But as the nation’s economy plunges into recession, millions are being cast into unemployment. In the oil heartland of Alberta, a province that once had a voracious demand for skilled newcomers, Premier Jason Kenney now warns of a 25% jobless rate.
Immigration targets will almost certainly be scaled back as the crisis forces a radical shift in Trudeau’s priorities.
Attracting more migrants, foreign workers and students has been a pillar of Trudeau’s political agenda since he became prime minister in 2015, making his government an outlier at a time when openness to foreigners is waning in Europe and US immigration has fallen to a decade low.
Yet, history shows economic downturns almost always lead to less migration into Canada, even without the unprecedented travel restrictions associated with the pandemic.
“We may be left with a legacy of higher unemployment through 2021 that could cause governments to rethink the near term immigration targets,†said Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce in Toronto.
Lower immigration may represent a third strike against Canada’s economy, on top of the widespread business shutdown due to the virus and collapsing prices for crude oil, a major export.
Newcomers have powered the country’s growth in recent years, providing a major source of new demand in cities like Toronto and Vancouver, where new arrivals tend
to congregate. The surge has spurred a housing boom,
driving up prices and fuelling construction.
If social distancing measures and business closures last for a year, the reduced flow of foreigners will not only hit the real estate market. It could also have lingering impacts on demand for education and other industries that rely on population growth, Shenfeld said.
Last year, Canada added a net 437,000 people from abroad —including close to 200,000 non-permanent residents like students, temporary workers — helping to drive the fastest increase in population among G7 countries.