Immigration slowdown puts pall on labour future
RBC report says reduced flow threatens to derail major source of economic growth
The reduced flow of immigrants into Canada during the COVID-19 pandemic could affect the country’s economic growth, warns a new RBC Economics report released this week.
Titled “The Canadian Dream Postponed,” the report notes that even under the most optimistic scenario, about 70 per cent of the 341,000 permanent residents Canada was targeting this year will be granted permanent residency. “The reduced flow threatens to, at least temporarily, derail what’s been a major source of economic growth for Canada in recent years,” says the report, prepared by RBC senior economist Andrew Agopsowicz.
He noted that with low birth rates and an aging population, the main driver of Canada’s labour force growth in recent years has been immigration, with newcomers relied upon heavily in certain sectors, including elder care.
“Given the demands COVID-19 has placed on Canada’s health-care sector, especially in long-term-care facilities, the need for workers has never been greater and any slowdown is likely to add to existing strains,” the report states.
Key findings include the fact that Canada added 34,000 permanent residents in the second quarter ending in June, representing a 67 per cent drop compared to the same period last year; while the number of temporary work permits that came into effect during the quarter was down about 50 per
cent. And about 10,000 new study permits were processed compared with 107,000 last year. Factors that can explain the slowdown in immigration include the fact that some people approved for permanent residency prepandemic had yet to arrive, as well as slow processing times during mass shutdowns in the spring, Agopsowicz said.
June saw signs of recovery, as immigration processing times seemed to improve.
“So it’s going to be less of a question about whether Immigration Canada can handle a big backlog and get processing times down, and more a question going forward about whether there are going to be people who want to come to Canada in the first place,” he said in an interview with the Star.
The report notes that most of the new permanent residents approved by Immigration, Refugees and Citizenship Canada in the second quarter “were already physically in Canada.”
The bulk of those new approvals were temporary residents who were already here, the report says: around 58 per cent were temporary foreign workers or students. “Typically only about 20 per cent of new permanent residents come from such temporary permit holders,” the report says. As travel into Canada remains restricted, the permanent residents who are arriving in the country are mainly those who have a permanent resident visa dated on or before March 18 and who are still allowed to travel into the country.
“Until more travel restrictions are lifted, we expect to see much lower levels of new permanent residents even as processing times improve,” the report says.
Overall, the report found that a “robust recovery is unlikely in the near term,” pointing out that Canadian visa centres across the world remain closed, making it difficult for prospective immigrants to even apply.
“Furthermore, the painful consequences of the pandemic, which include health concerns, increased demands on family caregivers and job losses, are likely to combine to make people less likely to seek to immigrate at the current time.
“That helps explain why new permanent-residency applications to Canada were down 80 per cent in the second quarter,” the report says.
Agopsowicz said Canada’s best bet in the current climate could be to “double down” on programs that encourage temporary immigrants who are already here, such as temporary foreign workers and students, to stay here permanently.
“People who have studied in Canada before and people who have worked in Canada before tend to do better in terms of labour market outcomes and integration than people who have never come to Canada before in the first place,” he said.