Canadian companies are complacent

Ottawa has launched one of the most thorough overhauls ever of our immigration system.

- DAVID OLIVE

To meet demands for more labour, Ottawa allowed record immigration flows, David Olive writes. But curbing growth in temporary residents won't solve Canada's productivity emergency.

But its sweeping changes to reduce the flow of newcomers will not solve the problems for which the immigration surge of the past two years has been held largely to blame.

That includes a warned-of “population trap” in which population growth exceeds available Canadian capital required to maintain a prosperous society.

Ottawa’s recent immigration reforms address that problem.

But laggard productivity growth, and the diminished prosperity gains that result, will remain a problem. That problem is rooted not in immigration flows but in decades of underinvestment in the economy by Canadian business.

The Bank of Canada this week labelled the country’s stagnant productivity growth an “emergency.”

More on productivity later. First, how we got here on immigration. To meet demands for more labour during the post-pandemic economic boom, Ottawa allowed record immigration flows. Ottawa tested Canada’s welcoming capacity, and the country now has almost 2.7 million temporary residents, Statistics Canada reported this week.

But in a drastic course-correction, Ottawa is now shutting the door to about 500,000 would-be newcomers over the next three years — a number larger than the population of Greater Halifax.

The strict new measures will reduce Canadian population growth to roughly one per cent from 3.2 per cent at the height of the immigration inflows.