The coronavirus pandemic has a devastating impact on economies across the world. The IMF projects the worldwide economy will contract by 3 per cent in 2020. This is the worst economic downfall after the Great Depression.
Just days before it announced travel restrictions to assist contain the spread of COVID-19, Canada said it might welcome over 1 million immigrants between 2020-2022, mainly to assist grow its economy.
Should Canada consider welcoming new Immigration in such a crisis?
The current state of affairs may lead to a question of whether Canada should continue with its Immigration plan or scale it back. There is little question that COVID-19 would require Canada to regulate its immigration plan.
However, it might not be sound policy to significantly reduce Canada’s immigration levels beyond COVID crisis. The reason for this is often that Canada needs immigrants quite it ever has in its modern history to market economic process.
Canada’s need for more Immigrants
Canada’s desire to welcome over 300,000 immigrants per annum is supposed to assist alleviate its demographic challenges. Canada has one among the world’s lowest birth rates and one among the world’s oldest populations. As more Canadians retire, it'll struggle to exchange them within the labour market since the country isn't having enough children. This is often where immigration comes in.
Immigration has been the key driver for population growth in Canada since the 1990s and can be the same by early 2030s. Population growth is vital because it fuels labour force growth. There are 2 ways to grow the economy. One is by adding more workers and the other is using those workers
Today, immigration tends to account for all of Canada’s labour force growth, or the overwhelming majority of it, during a given year. This suggests that Canada would constrain its economic process potential if it welcomed fewer immigrants.
Canada wants to see a full economic recovery
The consensus among economists is that the Canadian and the global economy should rebound fairly quickly once social distancing measures are eased. This means that more Canadians are going to be back their works, and there'll even be more job opportunities for immigrants. Canada’s economy pre-coronavirus is extremely telling of what we will expect once the economy is back to normal.
Leading up to the coronavirus pandemic, Canada’s percentage of unemployment was at record lows and its economy enjoyed a decade of growth following the 2008 global financial crisis. Remember that Canada maintained high levels of immigration despite following that crisis, which in hindsight, was the right economic decision to form.
One significant reason for the low percentage of unemployment before coronavirus is many of Canada’s over 9 million baby boomers were retiring, which caused a shortage of workers because the economy was expanding. This benefitted Canadian-born workers and immigrants alike.
Similarly, Canadian-born workers and immigrants are poised to profit from the post-coronavirus economic rebound. Within the coming years, it's realistic to expect Canada to affect worker shortages again, and even more so than before COVID-19 as all of Canada’s 9 million baby boomers reach the age of retirement within the subsequent decade.
Immigration policy always has long-term economic implications and that we shouldn't lose sight of that even within the wake of the coronavirus crisis.
Immigrants will help to make more jobs post-coronavirus
Canada’s economy is facing tough times, but immigration will play a pivotal role in supporting Canada’s economic recovery since immigrants will help to fill newly-created jobs and also support job creation in other ways.
Statistics Canada research shows that immigrants have a high propensity to start out businesses. In one among its recent studies, Statistics Canada found that immigrant entrepreneurs created 25 per cent of the latest private-sector jobs between 2003 and 2013, albeit they accounted for 17 per cent of companies studied. In other words, immigrant entrepreneurs punched above their weight when it came to job creation.
Hence, immigrant entrepreneur’s post-coronavirus will create businesses which will create new jobs for fellow Canadians. Finally, immigrants bring significant savings with them which helps to fuel the economic activity that's critical to fuelling job creation in Canada.
Consider the useful proxy of international students. As per the Government, the over 600,000 international students in Canada contribute over $22 billion in economic activity annually which supports nearly 200,000 Canadian jobs. Canada has over 8 million immigrants, who makes a good bigger contribution to the economic process and job creation than international students.