Canada Mulling Lower Immigration Levels for 2025, Minister Says — Update

By Paul Vieira

OTTAWA--Canada's immigration minister is mulling whether to reduce the number of permanent residents the country allows entry to in 2025.

Marc Miller said no official decision has been made. "We're looking at it in the context of what the economy needs," he said in a brief interview with The Wall Street Journal.

Last year, Miller said the country was set to allow entry of 500,000 permanent residents, or immigrants legally permitted to work or live in the country. Miler intends to unveil the government's immigration-level plan for 2025 and beyond no later than Nov. 1.

Cutting the level lower would arguably mark one of the biggest sea-changes yet in government immigration policy since Prime Minister Justin Trudeau took power in 2015, amid growing pressure to help slow population growth due to higher shelter costs, and strains on the health care and social services.

Canada has the fastest population growth by a wide margin among Group of Seven economies. Nearly all the recent population gains are immigration-fueled, mostly by those entering the country on temporary work and student visas. Some economists argue that without population growth, Canada would have entered a recession, or two consecutive quarters of negative growth.

Canada's population grew 3.2% in 2023, to 40.7 million people, or the fastest expansion in a 12-month period since the late 1950s. Excluding temporary immigration, the population would have increased by 1.2% last year, Statistics Canada said.

Robert Kavcic, an economist at BMO Capital Markets, said elevated immigration inflows have driven demand "well in excess of Canada's ability to match it with supply-think housing, transportation and services infrastructure. The impact was immediate inflation pressure that pushed interest rates higher than they otherwise would have been."

The growth in population is outpacing the advance in gross domestic product, and has helped cut job vacancies in half from a spring 2022 peak. The unemployment rate has climbed to 6.6%, or the highest level since 2017 when the pandemic is excluded, because hiring can't keep up with labor-force growth.

Miller has already unveiled plans to reduce the share of temporary immigrants in the country, from its current 7% level to 5% over a three-year period. Last week, he said the government would cut its issuance of student visas by 10%.

On Friday, Miller said he's considering reducing permanent-resident levels because rapid-fire, immigration-fueled population growth has presented challenges on affordability and shelter costs. "I owe it to Canadians and to the government to look at what we're seeing in Canada, and that includes a potential reduction" in permanent residency levels.

Miller spoke to the Journal after the Financial Post published an interview with the minister.

Canada admitted about 300,000 permanent residents into the country in 2016, or the first full year that the Liberals were in power. The annual intake has increased rapidly, and government officials have said immigration was one of the country's top economic engines.

In July, the Bank of Canada said it revised higher its projection for population growth, saying it was unclear the Liberal government's plan to curtail visas to temporary workers and students would materialize.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

September 27, 2024 16:33 ET (20:33 GMT)

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