The Bank of Canada has disputed the federal cabinet long-held claims that immigration is an immediate net benefit to the country, according to Blacklock’s Reporter.
Instead, bank analysts said on Wednesday that immigrants typically increase rents, are slow getting employment and contribute “to inflationary pressures in some sectors.”
“Strong population growth in recent years has boosted demand for housing,” said a Monetary Policy Report.
“This is adding to existing pressures on house prices and rents. The increase in housing demand from newcomers is being felt across all types of housing but the largest initial impact tends to be in rental markets. This is because most newcomers start out as renters.”
And when it comes jobs, researchers said many immigrants “face significant challenges integrating into the Canadian labour market. Difficulty getting foreign credentials and experience recognized in Canada also often results in newcomers taking jobs where skills do not match those required for the position. This potential mismatch also weighs on productivity.”
Ultimately, the Bank said, “the boost to labour supply due to the arrival of newcomers could be initially somewhat lower than what would be expected given the increase in the working age population.”
Analysts said the Bank assumed cabinet would slow down immigration after 2.3 million foreigners were allowed into Canada in 2023, including 1,040,985 foreign students, 766,250 migrant workers and 471,550 landed immigrants.
“Overall the consumption and employment profiles of newcomers suggest they contribute slightly more to demand than to supply in the first few years after they arrive in Canada,” said Monetary Policy.
“This unevenness contributes to inflationary pressures in some sectors.”
The report contradicted Ottawa’s repeated claims that immigration represented a quick net benefit to Canada.
“If we want to maximize our economic potential as a country to pay for all the things we enjoy we need to bring more people into our workforce,” then-immigration minister Sean Fraser told the Commons immigration committee in 2022. “Immigration is going to play a major role.”