Canada's liberal government has decided to maintain its current immigration targets for the next two years. This decision comes amidst the country's struggle with high inflation and a housing crisis. The government intends to halt the increase in immigration starting from 2026.
In more specific terms, Canada's immigration plan includes targeting 465,000 new residents for the current year, followed by 485,000 in 2024, and reaching a goal of 500,000 in 2025. This 500,000 level is what they plan to sustain in 2026, according to Immigration Minister Marc Miller's statement in Ottawa. The rationale behind these immigration levels is to strike a balance between economic and population growth while mitigating the strain on critical systems such as infrastructure and housing.
The Royal Bank of Canada (RY.TO) has expressed its view that the temporary pause in increasing immigration levels is a suitable response to the housing challenges and declining public support. However, the bank emphasizes that Canada will still require immigrants in the long term.
According to their report, the current annual intake of immigrants, which amounts to 1.3% of the population, is insufficient to stabilize the age structure of the population. To achieve this, they argue that immigration at a rate of about 2.1% is needed.
It's worth noting that Canada's population growth has largely been driven by immigration, and this growth has played a vital role in fueling economic expansion in recent years.