Bank of Canada (BoC) analysts on Wednesday disputed cabinet claims immigration is an immediate net benefit to the country, and warned the rapidly increasing population is costing Canadians. Immigrants typically drive up rents, are slow to get a job and contribute “to inflationary pressures in some sectors,” said BoC in a monetary policy report, per Blacklock’s Reporter. “Strong population growth in recent years has boosted demand for housing. “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. Survey results indicate immigrants are less likely to report owning a home until about 10 years after arriving in Canada. Growth in housing supply has not kept up.”Many immigrants “face significant challenges integrating into the Canadian labour market. Softening of the labour market has made it even harder for newcomers to find a job and be attached to the labour force. 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. As a result 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.”The bank said it assumed cabinet would slow the pace of immigration. A total 2.3 million foreigners were let into Canada last year 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,” wrote analysts. “This unevenness contributes to inflationary pressures in some sectors,” it added.The cautionary bank report contradicted repeated claims by cabinet 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.“Go down any main street, talk to a restaurant or go to a machine shop and see if they get talent on the shop floor to fill the orders that they otherwise could fill. Immigration is going to play a major role.”Canadians were skeptical of the claim, according to in-house 2022 focus group research by the Department of Immigration. “There was a view among some participants the proposed levels are too high due to the current economic climate,” said the qualitative research report. “This led to calls from some to ‘take a pause’ on immigration and prioritize Canadian workers until Canada’s economy recovers from the pandemic.”
