Canada Warned Reduced Immigration Could Impact Economic Growth


Last Updated on August 24, 2020

The drop in Canada immigration caused by the COVID-19 pandemic threatens to derail an important driver of economic growth, a new RBC Economics report has warned.

Permanent resident arrivals dropped sharply, particularly in April, side-lining the federal government’s strategy of immigration-fuelled economic growth.

International travel restrictions and the closure of the Canada-U.S. border were necessary to stop the spread of the deadly virus.

Now RBC Economics is predicting Canada will welcome a maximum of 70 percent of the targeted 341,000 immigrants in 2020.

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Immigration is the major driver of Canada’s labour market and population growth, with many employers heavily reliant on newcomers to fill vacancies.

“The reduced flow threatens to, at least temporarily, derail what’s been a major source of economic growth for Canada in recent years,” the report said.

It added: “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 statistics are revealing: Canada’s second-quarter intake of 34,000 new permanent residents is down by two-thirds on the same period of 2019. Work permits entering into effect in the second quarter were down by half, while study permit processing plummeted 90 percent.

The RBC report outlines that the newly approved permanent residents mainly came from candidates already in Canada temporarily.

Nearly 60 percent of the second quarter’s permanent resident arrivals were already in Canada, a figure that normally hovers around 20 percent.

New Permanent Resident Admissions to Canada by Month

With Immigration, Refugees and Citizenship Canada (IRCC) switching to program-specific Express Entry draws during the pandemic, this trend is likely to continue.

Draws have focused on Provincial Nominee Program and Canadian Experience Class candidates since March. Both groups are more likely to already be in Canada.

Nearly 40,000 Invitations to Apply have been issued in 20 draws targeting PNP and CEC candidates in the last five months.

Canada’s monthly immigration levels continued to recover in June, with more than 19,000 new permanent resident arrivals welcomed, according to the latest federal government figures.

The total is a 75 percent increase on the nearly 11,000 newcomers welcomed in May, but still significantly down on the more than 34,000 admissions in June 2019.

Between January and June, Canada welcomed 103,420 new immigrants, down from 160,230 in the same period of 2019.

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