Canada is planning to welcome approximately 1.45 million immigrants over the next three years, with 60% of them projected to be in the economic class. And, according to a new study by Desjardins, this wave of newcomers is expected to have several positive impacts on the country’s economy and society, some of which are already evident.

New immigrants are mostly of core working age

One of the most significant effects is that new immigrants are more likely to be employed than their Canadian-born peers, primarily due to demographic differences. New immigrants are mostly of core working age, between 25-54 years old, and selected for their human capital factors, making them ideal for Canada’s labor force. On the other hand, Canada has an aging population, with a consistent group of retirees exiting the workforce every year. The convergence of these two trends has resulted in new immigrants having higher employment rates than Canadians.

GDP is likely to grow bigger

The arrival of newcomers is anticipated to have not only societal benefits but also economic advantages, such as boosting potential GDP growth. New immigrants are highly tied to the labor force, with many having jobs even before entering the country, and their contributions are expected to raise Canada’s GDP per capita, leading to increased hiring and wage growth.

But, can Canada handle this wave of newcomers?

The Desjardins studies reveal that immigrant unemployment in Canada follows a cyclical pattern, with spikes occurring roughly every ten years before decreasing. Newly landed immigrants may have difficulty gaining a foothold in the labour market, raising concerns about Canada’s ability to handle the upcoming wave of immigrants.

However, job vacancies are currently at record highs, and the tight labour market makes it likely that newcomers with in-demand skills and qualifications will have favourable outcomes. Canada’s immigration system is designed to attract individuals with desirable human capital factors, which can be important predictors of success in the labour market.