Immigration and efforts made to improve the representation of minority groups in Canada may be the best path for the country to achieve economic growth and improve the living standards of its people in the next 20 years. A study conducted by the Conference Board of Canada considers certain labor force scenarios that could be beneficial to Canada in the period from 2018 to 2040.
In this period, there will be over nine million Canadian baby boomers in retirement and the demand for publicly funded social services will increase. According to the study titled Can’t Go it alone: Immigration is Key to Canada’s Growth Strategy, a quarter of the population will be at least 65 years old in 20140. The reduced labor force may have a significant impact on the economy of Canada. The Canadian government will spend a lot of money trying to provide the older population with health care.
Over 11 million students are expected to leave school in the period between 2018 and 2040. They are expected to provide the country with its labor force but that number is not enough. 13.4 million workers will be leaving the workforce so there will still be a gap to be filled. It is, therefore, necessary for the Canadian government to bring in immigrants to fill the gap.
About the Study
Can’t Go it Alone: Immigration is Key to Canada’s Growth Strategy is meant to evaluate how different solutions may help the Canadian government improve its economy and workforce. It assesses solutions which include improving the labor force, welcoming more immigrants to the country, and improving the participation of indigenous people, women, and persons with disabilities. It is also focused on advancing technology and improving the fertility rate.
The study evaluates four scenarios that Canada can use to fill this gap. The counterfactual scenario assumes that Canada will have no immigration in the period from 2018 to 2040. Others assumed the results of an increased labor force and immigration level of one percent. Groups that experience large and chronic gaps in representation include people with disabilities and indigenous people.
According to the study, a fourth scenario that consisted of increasing immigration levels and improved participation of women, people with disabilities, and indigenous people would be the best way forward for the country. If this scenario plays out the right way, it may lead to an increase of almost six million workers. This number represents the annual labor force growth from 2000 to 2017. This scenario is not only important for the development of the Canadian economy but also for the diversification of the labor force.
The 1% Immigration
According to the study, immigration that reaches a yearly rate equal to 1% of Canada’s population will continue to be a formative solution for the coming labor market. According to the study, the size of Canada’s labor force will stand at 23.3 million workers in 2040 which is an improvement from 2018’s 19.8 million. If the Canadian government promotes the inclusion of people with disabilities, women, and indigenous people, the country may benefit from an increase of about 2.2 million workers by 2040. It may also earn over $100 billion to the economy.
The research concludes that the government should consider the inclusion of under-represented groups into the labor pool. Under-represented groups may lead to significant improvement in the economy.