Pondering the avenues for maintaining an "environmentally friendly" influx of immigrants?
Is immigration really solving labor shortages, and how does it benefit the economy? HEC Montreal economist Pierre-Carl Michaud takes a deep dive into the delicate subject in a recent study.
In a unique situation, the immigration rate in Quebec—both permanent and temporary—has skyrocketed since 2016, reaching an all-time high of 25 immigrants per 1,000 in 2023. This increase is primarily due to non-permanent residents, who now make up nearly 7% of Quebec's population.
However, immigration hasn't significantly filled labor shortages, according to Michaud. Regions struggling with acute labor crises, like Quebec or Chaudière-Appalaches, have seen labor shortages worsen between 2015 and 2023, contrary to popular belief.
Despite immigrants rejuvenating the working population and contributing to the rise in the standard of living of Quebecers, the overall economic impact of immigration is "quite neutral." While the GDP per capita of Quebec would be 38% lower in 2070 without immigration, the decline in the standard of living would only be around 10% of GDP per capita in 45 years with a level of 50,000 immigrants per year, Michaud finds.
To plan a "soft landing" after the immigration takeoff, Michaud emphasizes the importance of the number of permanent residents accepted each year. He suggests the target of 70,000 new permanent residents per year as a "recommended" target, determined by several criteria for a so-called "sustainable" immigration policy, including avoiding extreme resentment and significant changes in workers' wages.
Permanent immigrants, with their stable status, are integral to social integration and contribute to long-term economic growth through filling skilled labor gaps, starting businesses, and boosting tax revenues. On the other hand, temporary workers often fill immediate needs in sectors like agriculture, healthcare, and skilled trades, but their status uncertainties can limit their long-term contribution.
Current challenges include reduced pathways to permanent residency, processing delays, and an undocumented population due to these issues. Strategic reforms and more efficient processing are needed to maximize the positive impact of immigration on Quebec's labor market and economic health.
The government's planning for a "soft landing" after the immigration takeoff involves setting a target of 70,000 new permanent residents annually, aiming for a sustainable and stable immigration policy. Meanwhile, temporary workers, who often fill immediate needs in sectors like agriculture, healthcare, and skilled trades, can contribute significantly to the home-and-garden industry and also help promote sustainable-living practices by starting businesses focused on eco-friendly products or services.
