New Study Reveals Shocking Impact of Decreased Immigration on Economy – You Won’t Believe the Results!

As the Canadian government swiftly adjusts its immigration targets, a recent study reveals that while economic growth may slow down, a recession is not imminent. The Conference Board of Canada’s report, released on Friday, highlights the complex impacts of this policy change on the economy.

Key Points from the Report:

• The report predicts a significant reduction in real GDP, estimating a decrease of $7.9 billion in 2025 and $16.2 billion in 2026, leading to a 0.3 percentage point drop in real GDP growth during those two years.
• The sudden surge in Canada’s population in 2023 and 2024 was deemed a mistake, but the report cautions against trying to rectify this issue hastily.
• The government’s decision to decrease non-permanent residents by over 900,000 aims to alleviate pressure on infrastructure, public services, and the housing market. While this may reduce housing market price pressures and boost productivity, it could also create challenges like straining employers and exacerbating labour shortages.
• The adjustment in immigration policy is expected to impact employment by causing a decline in unemployment rates by 0.5 percentage points in 2025 and 0.6 percentage points in 2026, tightening the labour supply.
• Inflationary effects are anticipated, with wages and consumer prices likely to rise following the population and labour income decrease.

The Road Ahead:

The Conference Board of Canada recommends a more gradual reduction in non-permanent residents, targeting a five per cent decrease by 2029 instead of 2027. This phased approach would help balance labour market dynamics and mitigate economic risks more effectively.

The report underlines the importance of migrants for Canada’s long-term prosperity, stating that sustainable immigration rates can enhance the country’s productive capacity, GDP, and tax revenues, offsetting public sector costs and improving government finances to some extent.

In conclusion, while the government’s actions may have short-term implications on the economy, a strategic and stable approach to immigration will benefit Canada in the long run, ensuring economic growth and stability.