Canada’s Immigration Cuts: A Blessing or a Curse?

December 9,2024 Amritpal Kaur

Canada’s decision to reduce immigration is causing a lot of debate. According to the latest Conference Board of Canada report, the cuts will slow economic growth, but not push Canada into a recession. But what does this really mean for the country?

The Short-Term Impact: Slower Growth, But No Crisis

The report predicts that reducing immigration will lower GDP by billions. In the short term, Canada will experience slower growth, but it’s not enough to cause a recession. The drop in population will reduce both economic supply and demand, meaning less spending and fewer workers, which will slow things down.

Why the Government is Cutting Back

The government is acting after the 2023-2024 immigration surge strained housing, infrastructure, and public services. Cutting 900,000 non-permanent residents over two years is an effort to ease these pressures. But, is it the right approach?.

The Labor Market: Fewer Workers, But More Problems?

With fewer workers coming in, labour shortages will increase, making it harder for employers to fill jobs. While unemployment may drop, fewer people in the workforce could hurt businesses, especially those relying on immigrants.

Inflation and Spending: A Tight Squeeze

Fewer workers could lead to higher wages, but that means higher prices for consumers. On top of that, with fewer people and tighter incomes, consumer spending will likely drop, leading to a slowdown in the economy.

Long-Term Outlook: Canada Still Needs Immigrants

In the long run, Canada still needs immigrants to support growth and fill jobs. The report suggests a gradual reduction would have been smarter, rather than a sudden cut. Immigrants are essential for future economic prosperity.

A Risky Move

I understand the government’s need to address the short-term pressures on housing and services. But, cutting immigration too drastically could hurt Canada’s long-term economic health. A more balanced, gradual approach would be better. Canada needs immigrants not just to fill jobs, but to keep the economy thriving.

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