Immigration to take a hit

Virus could cut in half Canada’s intake of newcomers,

Canada’s annual immigration intake is expected to decline in 2020 by half from last year’s levels as a result of the global pandemic, raising concerns over the impact on the country’s newcomer-fuelled economy.

Canada welcomed 341,000 permanent residents in 2019 and was set to usher in another 370,000 this year, but that number is forecast to be down by as many as 170,000, according to a RBC report released Friday.

First-quarter immigration data on arrivals all indicated drastic decreases in the number of permanent residents, migrant workers and international students.

“The disruption will reverberate across the economy, given our reliance on immigration for labour-force growth and to offset Canada’s aging demographic,” warned the analysis by RBC senior economist Andrew Agopsowicz.

“Among the potential casualties: industries with labour shortages, urban rental and housing markets, and university budgets.

Canada will need a younger and growing population to maintain growth and support the unprecedented expansion of the fiscal deficit that came in response to the crisis.”

In March, Ottawa had set a target to bring in 370,000 new permanent residents this year, up from 341,000 in 2019. Just days after the announcement, concerns about the spread of COVID-19 prompted the federal government to impose travel restrictions.

Although these health and safety measures only started in Canada in mid-March, the impacts of the pandemic on immigration had already been felt in other parts of the world, resulting in the disruption of visa services and travels.

These early immigration numbers may be an indication of what is to come as the global pandemic is expected to last through at least this fall, if not longer:

Permanent resident entries were down 30 per cent in March versus a year earlier;

Temporary foreign worker admission in the agricultural sector fell 45 per cent in March from a year earlier;

The number of students entering on study visas fell 45 per cent in March from a year earlier.

“If these restrictions last all summer, we expect to see 170,000 fewer permanent residents entering the country in 2020 than planned,” the report said.

“While temporary foreign workers are exempt from entry restrictions, fewer are coming. The overall number of TFWs entering Canada in March was down 35 per cent versus the same month last year. In the agriculture sector — where they represent a key source of labour — the drop was an even sharper 45 per cent.”

Agopsowicz cautioned that Canada’s international education sector is also taking a huge hit, with fall enrolments expected to be down sharply amid travel restrictions and a broad, possibly permanent shift to remote learning.

In 2018 alone, international students pumped $21.6 billion into schools, communities and the broader Canadian economy.

At University of Toronto, for instance, international enrolments has doubled since 2010 to 25 per cent of the student body. If just one-fifth of its foreign students opt not to study in Canada this year, said the report, it could mean a shortfall of around $200 million on a $3 billion budget.

“That reduction could also hurt the small businesses and landlords who depend on these students for revenue,” it said. “A decline in foreign students could also affect what’s been an important source of new permanent residents.”

Canada’s immigration selection system has increasingly favoured international students, with their Canadian academic credentials and work experience. In 2019, some 11,000 new permanent residents had previously studied in Canada.

Last year, Canada’s population grew by 1.6 per cent or 580,000 people, with immigrants accounting for more than 80 per cent of the growth, said the report. While 30 per cent of the overall population is at least 55, only 8 per cent of immigrants are.

“Even before the pandemic, Canada relied on immigration to offset the fiscal challenge posed by an aging population,” the report noted. “With the tab of fighting COVID-19 already nearing $160 billion, Canada needs a growing labour force more than ever.”