A well-managed, steady population increase over the next 40 years can position Canada among the world’s most important countries. Throughout history, a growing population has been a key factor in the rise of economic and political power.
The 21st century will in part be defined by countries that can sustainably increase their population, because so many other countries are already experiencing population aging and decline.
Germany, Japan, Russia, and Italy are already being hurt by natural population decline, a result of deaths exceeding live births. Ultimately, this will increase dependency ratios, which measures the number of potential workers supporting the youth and aged in the population. As a result, public finances will be increasingly strained, not only because there are fewer workers to support dependents, but also because the economy will most likely shrink.
Canada can be one of the exceptions to this dangerous demographic shift. The last decade’s one per cent average annual population growth is a historic low.
This rate should be increased to 1.45 per cent annually, slightly lower than our historic average annual growth rate. As a consequence, Canada’s population would nearly double by mid-century, which is consistent with the historic pattern of Canada’s population doubling every 40 years. At this rate, there would be more Canadians than Germans by 2061 and Japanese by 2069.
To achieve this, Canada would have to both accept more immigrants and increase the country’s fertility rate. The key to ensuring a sustainable demographic increase rests on public policy that recognizes the challenges of raising immigration levels and fertility rates to ensure that a rising population is consistent with best-in--class economic and social outcomes.
Publicly voiced concerns about increased immigration — such as diluted wages among Canadians, overburdened public finances and the inability of immigrants to assimilate into Canadian culture — are misplaced.
Immigration has little impact on Canadian wages. It can, however, affect the wages of immigrants who compete with each other inside parallel immigrant labour markets. Consequently, immigrants often earn less for longer than the average Canadian, a serious problem that has increased with time.
It’s a complex undertaking — Canada needs to strengthen policies that facilitate the assimilation of immigrants into the work force. These could include extending the length of work visas for foreign graduates of Canadian universities, fast-tracking immigrants who are proficient in Canada’s official languages and who have job offers, creating programs to accelerate foreign-credential recognition, and providing support to immigrants on arrival.
Research also shows that the cost of immigrants to taxpayers is lower than is widely assumed. This is principally because of the fiscal contributions immigrants make over the course of their working lives. Lesser known is that immigrants also play important roles in innovation and have successfully created new businesses in several sectors of the economy.
Also noteworthy is that immigrant neighbourhoods often have lower youth-crime rates compared to those nearby, because of educated parents and the support of extended families. Immigrants are often better educated than average Canadians because of Canada’s immigrant points system, which emphasizes education. This has also led to significant immigrant cultural contributions to the arts and academia.
However, immigration alone would only postpone Canada’s demographic aging. To achieve sustainable levels of population growth, Canada must also increase fertility rates. Otherwise, Canada will begin natural population shrinkage by 2036, the date when at current trends more Canadians will die than are born.
Fertility rates could be increased by emulating strategies that have been adopted in countries such as France and Sweden. These entail the creation of comprehensive public daycare systems that give parents increased child-rearing choices. Canadian governments must also find ways to create fiscal incentives that substantially reduce the cost of raising children.
Canada’s population growth rate in the last decade is already at a historical low. Further decline will undermine the opportunity offered by population increase and will ultimately reduce productivity and increase pressure on government finances.
Canada can position itself as one of the most consequential countries on the planet, not just because of our example of good governance and strong economic growth, but for the first time in our history, the sheer size of our population and the economic opportunity that this presents.
Paul Summerville, adjunct professor at the University of Victoria’s Gustavson School of Business, and Rowan Porta are co-authors of the upcoming book 60 Million Canadians: The Case for a Really Big Canada.
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