A new report suggests the federal government’s rapidly reduced immigration targets will significantly slow economic growth, but not enough to trigger a recession.
The Conference Board of Canada says an abrupt reduction in population will simultaneously reduce economic supply and demand — producing economic impacts different from a typical slowdown.
The report estimates the policy decision will lower real GDP by $7.9 billion in 2025 and $16.2 billion in 2026.
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Pedro Antunes, chief economist at the Conference Board, says the immigration changes may be too drastic given the fragile state of the economic recovery, and that a steadier approach would offer a more stable path forward.
In October, the federal Liberals announced a plan to reduce non-permanent residents by more than 900,000 within two years after a high influx of newcomers strained Canadian infrastructure, public services and the housing market.
The report says the government’s hasty course correction brings a new set of challenges, potentially straining employers, exacerbating labour shortages and impacting near-term economic performance.
This report by The Canadian Press was first published Dec. 6, 2024.
