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Canada’s Immigration Conundrum: Economic Boon or Bust?

Canada’s Immigration Conundrum: Economic Boon or Bust?
People cross the intersection at Spadina Ave. and Dundas St. in Toronto in a file photo. The Canadian Press/Nathan Denette
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Commentary

Immigration is a hot topic lately. Until recently, anyone questioning the “immigration is good for the economy” mantra was ruthlessly shouted down and labelled a bigot.

The Canadian fondness for immigration is certainly understandable. Canada was, and to some extent still is, an underpopulated nation. Out of 249 countries and dependencies, Canada ranks 238th in population density at four people per square kilometre. For most of its history, Canada has grown in wealth as its population expanded. We are a nation of immigrants as the French, English, Scots, Irish, and other groups from Europe and eventually elsewhere came to Canada. Since the beginning of the Industrial Revolution, populations and standards of living have increased.

As we are told, seemingly ad nauseum, correlation is not causality. That is true, but much of the time correlation reveals causality. Importantly, multiple factors can cause a phenomenon. Also, sometimes high correlations are merely coincidental. The question Canadians are increasingly asking themselves after two years of unprecedented immigration levels and a six-year growth depression is: “Is immigration a benefit, or has it become a root cause of our economic problems?”

Tom Czitron
Tom Czitron
Author
Tom Czitron is a former portfolio manager with more than four decades of investment experience, particularly in fixed income and asset mix strategy. He is a former lead manager of Royal Bank’s main bond fund.