Immigration: Is it Benefitting Canada?

Obviously, policymakers, academics, thinkers and politicians have very different opinions about the purpose, goals and impact of immigration, influenced by their political ideologies. Although some advocates insist that economics should not be a key component of immigration planning, most correctly focus on the economic costs and benefits, while also emphasizing the larger sociocultural role that migration of human beings plays in shaping the country and the people affected.

A key consideration is the balance between permanent and temporary pathways to residence in Canada. When we consider immigration, we usually think of permanent residents who relocate from their home countries to live, raise kids, work or do business in Canada for the long haul. However, Canada’s temporary residence programs have ballooned over the years, and the impact of foreign workers, students, and even visitors has been dramatic.

Jock Finlayson of the Fraser Institute argues the guiding principle of immigration policy should be raising living standards for current Canadians, not simply increasing population size. The Institute emphasizes that only highly skilled individuals, especially in STEM fields, can contribute meaningfully to per capita GDP and tax revenues while costing less in public services (Finlayson, 2025)¹. Fraser research shows Canada’s immigration surged from 617,800 per year (2000–2015) to roughly 1.4 million per year (2016–2024), with temporary students and workers driving the increase (Finlayson & Globerman, 2025)². Fraser also warns that simply expanding workforce headcount fails to lift living standards when capital investment and productivity growth lag behind (Fraser commentary, 2023)³.

By contrast, researchers at the C.D. Howe Institute and academic journals emphasize structural policy gaps rather than immigration volume itself. A 2022 study by Harrap et al. concluded that skilled migration outcomes in Australia significantly outperform Canada’s, largely due to better credential recognition, more immigrants obtaining Australian degrees, and career matching systems⁴. Other work by Hou, Picot and colleagues shows that two step pathways in which international students come to study in Canada and then immigrate, yield higher earnings trajectories, especially when education is Canadian⁵. This leads to a greater contribution to the economy through taxes and purchasing power.

Statistics Canada longitudinal work (CIT 36 28 0001, 2025) indicates that immigrants who naturalize have markedly better employment and income outcomes than non-citizens, even five years post-arrival (e.g. 90 percent vs. 78 percent employment)⁶. Although this is largely correlated with pre-existing advantages rather than a direct citizenship effect, it demonstrates that well-designed selection criteria can lead to well-engaged future citizens.

Picot and Hou’s 2024 Bank of Canada analysis reveals that the shift toward non-permanent residents (workers and students) has reshaped the workforce composition and weakened integration pathways, raising concerns about long-term contributions and productivity⁷. This is a very important point to understand, as much of the disillusionment of Canadians and would-be immigrants alike relates to the current serious disconnect between the temporary and permanent residence programs. (This frustrating reality will be discussed in detail in a future article).

The Institute for Research on Public Policy (IRPP) maintains that immigration has delivered net economic and demographic benefits to Canada, but also stresses that its full potential hinges on well-designed integration systems and policy coordination. Citing data from Statistics Canada and its own research, the IRPP notes that immigrants have accounted for nearly 100% of Canada’s labour force growth in recent years and are projected to be responsible for over 30% of Canada’s population by 2036, helping to offset aging and labour shortages⁸. Moreover, while immigrants may initially earn less than Canadian-born workers, their incomes and tax contributions generally increase over time, producing long-term fiscal gains⁹. However, the IRPP warns that structural barriers such as foreign credential non-recognition, systemic discrimination, and uneven regional support, continue to depress economic outcomes and reduce the overall return on “immigration investments” ¹⁰.

To better leverage immigration for the country’s long-term benefit, the IRPP advocates for policies that extend beyond selection to encompass integration, equity, and sustainability. It supports the continued use of economic immigration streams, including Express Entry, but cautions against overreliance on temporary foreign worker programs, which can entrench precarity and limit social cohesion¹¹. Instead, it recommends expanding permanent pathways and investing in infrastructure, particularly housing, healthcare, and public transit, to ensure immigration growth is matched by absorptive capacity¹². The IRPP further urges that settlement services focus not only on employment, but also on language acquisition, anti-racism strategies, and civic participation, especially in smaller communities where immigrant retention is a growing concern. In its view, immigration policy should be people-centered, treating newcomers not merely as labour market inputs but as future citizens, neighbours, and contributors to shared prosperity.

International literature reinforces that immigrant contributions vary depending on skill level, local matching, and economic context. Companies run by new immigrants grow more successfully when connected to key contacts who bring industry specific and location specific knowledge, a point emphasized by Glaeser, Hidalgo et al.¹³. In immigration terms, this insight supports policies that connect skilled immigrants to firms in sectors they know well, help immigrants acquire local knowledge quickly, such as through co-op placements, mentorship, or region-specific training, and encourage hiring immigrants with both global expertise and local experience, such as international students who graduate from Canadian institutions and then work in their field locally. This supports the broader argument that it’s not just who we admit, but how we integrate them into the labour market that determines the economic payoff of immigration.

Moreover, research in other jurisdictions shows that immigrant entrepreneurship significantly boosts innovation; for example, immigrants in the U.S. are overrepresented among STEM PhDs and founders of high growth tech firms¹⁴. Yet Canada’s academic research highlights hurdles in matching credentials, underemployment of newcomers, and a steep “migrant wage effect” even among degree holders¹⁵. The current situation for would-be immigrant entrepreneurs is dire as neither the federal or provincial governments have effective programs, and uncertainty and delays pervade the system (Again, another article to come).