COVID-19 and its impact on Immigration into Canada | With Video
As we are all aware, Canada has been one of the world’s top destinations for immigrants, and this year was supposed to be no exception. Then came the pandemic and nothing is the same now. Let’s examine a recent report from RBC on the impact of Covid-19 on immigration into Canada.
- Permanent resident additions were down 30% in March 2020 versus a year earlier
- Temporary foreign worker entries in the agricultural sector fell 45% in March from a year earlier
- The number of students entering on study visas fell 45% in March from a year earlier
- Refugee resettlement—which delivered around 150,000 newcomers to Canada in the last five years—has stopped entirely.
Before we head into the future of immigration, let’s analyze the future of the Canadian economy, after all, continued migration into Canada depends on how well the economy rebounds after this crisis. A recent Scotia Bank Economics report, reports that the Canadian economy will rebound and reach its pre-pandemic level by 2022.
As you can tell from the table, a broader recovery in the economy is predicted to start early next year. There is a precipitous forecasted drop in GDP of 7.3% in 2020 as against a growth of 1.7% in the year 2019. In 2021, however, there is a forecasted rebound as the economy grows at 6.6%. This rebound will close the gap in GDP and help the economy return to its 2019 level by 2022.
|Real GDP Growth (Annualized)
- Canada relies on immigration to meet fiscal challenges: Remember, even before the pandemic, Canada was reliant on immigration to overcome its fiscal challenges due to its aging population. Most of the big cities in Canada, including Toronto, Vancouver, and Montreal are heavily dependent on immigration for continued growth. In fact, the situation has been exacerbated but the pandemic. There is now a bigger fiscal challenge for the economy — the $160 billion additional spendings that the government had to take on to support unemployed workers.
- Large Canadian cities need immigration to offset population loss: Furthermore, the Canadian economy as a whole and especially the large cities in Canada need immigration to drive economic growth. ln Toronto, Vancouver, and every other major city in Canada, international migration plays a major role in terms of economic growth. Other sources of population growth including internal migration and natural increase in population are not enough to substitute International migration as the major growth driver in cities.
- Canadian Colleges, Universities, and student services ecosystem depend on Immigration: Canada’s colleges and universities have come to rely on international students to bolster enrolment as growth in domestic students plateaued over the past 10 years. While those international students who are already in Canada to study are allowed to remain, closed borders—and schools’ move to online learning—could weigh on enrolments this fall. That reduction could also hurt the small businesses and landlords who depend on these students for revenue. International students contribute over $6 billion in tuition alone each year. Remember some colleges have over 50% of their student body from abroad, however, let’s consider the University of Toronto as an example, which has seen international enrolments double since 2010 to 25% of the student body. If just one-fifth of its foreign students decide not to study in Canada this year, it could see a shortfall of around $200 million on a $3 billion budget. So this is a big impact, as far as universities and colleges are concerned.
On March 12, Ottawa released a plan calling for 370,000 new permanent residents in 2020, a tally that would have exceeded 2019’s, record-setting 341,000 newcomers. Four days later, concerns about the spread of COVID-19 led Canada to implement travel restrictions that for all intents and purposes shut down immigration. Amid ongoing border restrictions, travel-related health fears, and the global economic downturn, we expect immigration levels to be down sharply in 2020. A recovery in 2021 will depend in part on the course of the pandemic.
In the short term, the net loss of new permanent residents this year could total up to 170,000. This means less than half the target set for this year will be met.
In the long-term though, the prognosis is that immigration will continue as planned. 2020 is a difficult year with a lesser number of arrivals however we should see things get back to normal in 2021 and 2022. Furthermore, we do think that 2021 and 2022 targets can be met.
To conclude, the immediate impact on Immigration is clear, there is a slow down as the pandemic is brought under control. However, in the long term, the future of immigration into Canada is bright. Given, Canada’s unique economic needs, there is hardly a scenario where immigration can completely be stopped.
June 4th, 2020