Immigration innovation key to handling aging population: RBC

Faced with an aging population, Canada should step up its immigration efforts, says a new report from RBC Economics.

RBC recently reported that immigration started to rebound in the first quarter of 2021 after being decimated by travel and public health restrictions brought on by the Covid-19 pandemic.

The plunge in immigration due to Covid-19 meant that Canada’s population growth slowed dramatically in 2020, exacerbating the aging population challenge.

“Even before the pandemic hit, an older Canada was set to strain public finances,” the report released Tuesday said. “The pandemic laid bare the need for even greater investments, particularly in long-term care.”

Yet, to support growing health-care spending, Canada needs to grow its working-age population.

To that end, the government should be seeking to boost immigration further in the post-Covid world, RBC said.

“While a focus on making up for 2020’s shortfall is a critical goal, over the longer term Canada would benefit from a more responsive approach to immigration: one that addressed labour-force gaps and targeted the world’s best talent all while helping to offset domestic aging,” the report said.

Over the past year, the government demonstrated some flexibility on immigration, RBC noted, citing an effort to convert more of the 1.2 million temporary visitors into permanent residents.

“Innovative approaches like this could help Canada reap more benefits from the ambitious immigration targets it has set for the years ahead,” it said.

In particular, these efforts should target immigrants with the skills that are likely to be in higher demand in the years ahead, such as tech workers, skilled tradespeople, and health-care workers.

“Labour shortages are already evident in several of these areas,” it said.

“While Canada needs to invest in skills training and education for its current population, immigration is critical to meeting shifting labour-market demands,” it noted.

The competition for these sorts of workers will likely only increase in the years ahead, RBC said.

“Canada could use expanded remote work and remote education options as a competitive advantage to develop connections with potential immigrants,” it suggested.

At the same time, it said that the government should continue to encourage temporary visitors to become permanent residents, noting that there are already over 1 million temporary residents, “with Canadian work and schooling experience that could mean successful transition into the labour market.”

These programs could increasingly target areas of higher labour market demand, the report said.

“Canada also needs to replenish the temporary resident pool and clarify permanent residency pathways,” it added.