Introduction: The Population Puzzle in Canada

Canada Immigtaion Policy : Canada finds itself at a turning point. For decades, the country’s relatively small but steadily growing population has been a cornerstone of its economic success. However, two intersecting forces now define the nation’s demographic reality: an aging population and historically low fertility rates. Together, these forces place increasing pressure on the labour force, healthcare systems, and overall economic productivity.

At the same time, Canada immigration policy has become the single most important driver of population growth. In fact, nearly all of Canada’s population growth in recent years has come from immigration—both permanent and temporary. Without immigration, Canada’s natural population growth would be close to zero, creating long-term risks for its economic stability.

But this raises critical questions:

• How much immigration is enough to sustain Canada’s economy?

• What challenges does rapid immigration create for housing, healthcare, and infrastructure?

• Can immigration alone solve the problem of an aging population?

This blog draws heavily from the C.D. Howe Institute’s publication Balancing Canada’s Population Growth and Ageing Through Immigration Policy by Daniel Hiebert (source), which offers long-term projections and evidence-based scenarios to understand Canada’s options.

By exploring population growth trends, societal changes, immigration policy shifts, and broader sustainability strategies, we’ll better understand how Canada immigration policy is being designed to strike the right balance between growth and sustainability.

Immigration-Driven Population Growth in Canada

Historically, natural increase (births minus deaths) was the main contributor to Canada’s population growth. By the late 20th century, as fertility rates declined, immigration began to overtake natural increase as the primary driver of demographic expansion. Today, immigration accounts for almost 100% of net population growth, making it the single most important factor in shaping the country’s future.

In 2023, Canada’s population grew by over 1 million people—a record 3% increase, the fastest rate in more than six decades. This surge was fueled by permanent residents, temporary foreign workers, and international students, all of whom play critical roles in the labour market and broader economy.

As a result, Canada immigration policy has become the country’s most significant lever for influencing not just demographic outcomes, but also economic productivity, labour market stability, and long-term social development. Decisions about how many immigrants to admit, what categories to prioritize, and how to integrate newcomers are now central to Canada’s national strategy for balancing growth with sustainability.

Section 1: Canada’s Demographic Reality

1.1 The Fertility Decline

Canada’s fertility rate has fallen to around 1.26 children per woman—well below the replacement level of 2.1. This means that without strong Canada immigration policy, the population would shrink in the long term. The last time Canada’s fertility rate was at replacement level was in the early 1970s.

Immigration has therefore become more than just an economic tool; it is now the primary strategy to counteract low fertility and sustain population growth.

1.2 Baby Boomers Retiring

The large Baby Boom generation (born between 1946 and 1964) is moving into retirement. By 2030, all Boomers will be at least 65 years old. This shift dramatically increases the Old-Age Dependency Ratio (OADR)—the number of seniors relative to working-age people.

• In 2021, the OADR stood at about 29.5.

• By 2071, even under optimistic Canada immigration policy scenarios, it rises significantly, meaning fewer workers will be supporting more retirees.

This makes immigration not only a workforce strategy but also a critical lever for stabilizing the social and economic balance in Canada.

1.3 Natural Growth Nearing Zero

With declining fertility and rising deaths due to aging, Canada’s natural increase is nearing zero. In other words, population growth from within is no longer sustainable.

As a result, Canada immigration policy is no longer just a contributor—it has become the sole engine of population growth. Permanent residents, temporary workers, and international students are now the driving forces keeping Canada’s demographics stable.

Section 2: Population Growth and Immigration Scenarios

The C.D. Howe Institute modeled several scenarios to show how different levels of immigration affect Canada’s population size and aging trends.

2.1 Immigration Scenarios and Their Outcomes

📊 Figure 1: Canada’s Population Projections under Different Immigration Scenarios
(Source: C.D. Howe Institute, 2025

Reference: C.D. Howe Institute

• Scenario 1 (0.3% immigration rate): Canada’s population eventually begins to decline.

• Scenario 2 (0.6%, historic levels): Population grows but aging accelerates.

• Scenario 3 (0.9%, current government target): Canada reaches ~55 million people by 2071.

• Scenario 4 (1.2%, 2024 run-rate): Population exceeds 67 million by 2071.

• Scenario 5 (1.8%, very high immigration): Canada reaches over 91 million by 2071, though this would create capacity and integration challenges.

Takeaway: Immigration can slow aging but cannot reverse it completely.

2.2 The Old-Age Dependency Ratio

📊 Figure 3: Projected Old-Age Dependency Ratios under Immigration Scenarios
(Source: C.D. Howe Institute, 2025)

Reference: C.D. Howe Institute

Even under ambitious immigration, OADR rises. For instance:

• 2046: ranges between 44.5 and 50.8 depending on immigration.

• 2071: could be between 46.5 and 61.6.

2.3 Immigration and National Identity

Table 2: Proportion of Canadian Population with Immigrant Backgrounds
(Source: C.D. Howe Institute, 2025)

Reference: C.D. Howe Institute

By 2071, under mid-level immigration (Scenario 3), two-thirds of Canadians will be immigrants or children of immigrants.

This transformation has implications for:

• Language diversity

• Cultural integration

• Policy debates around national identity

2.4 Beyond Immigration: Retirement Age Shifts

Table 3 : Impact of Delayed Retirement on Dependency Ratio
(Source: C.D. Howe Institute, 2025)

Reference: C.D. Howe Institute

If Canadians work until 70 instead of 65, combined with moderate immigration, the OADR stabilizes around 30—close to today’s level. This highlights that policy beyond immigration is critical.

Section 3: Societal and Structural Changes from Immigration-Driven Growth

3.1 Housing Crisis and Infrastructure

Rapid population surges, driven largely by immigration, have fueled unprecedented demand for housing. This has led to skyrocketing rents and home prices in major cities like Toronto and Vancouver. Without matching investment in housing supply, transit expansion, and healthcare infrastructure, high immigration levels risk becoming politically sensitive.

Canada immigration policy must therefore balance intake levels with the country’s ability to expand infrastructure. If immigration continues to grow without parallel investment in affordable housing, public services, and urban planning, support for immigration could weaken despite its economic benefits.

3.2 Labour Market Dynamics

Immigrants have been crucial in filling labour shortages, particularly in healthcare, construction, transportation, and technology sectors. Many hospitals, long-term care facilities, and tech startups depend directly on immigrant talent.

However, challenges remain. Underemployment is a persistent issue, as many newcomers struggle to find jobs that match their skills due to credential recognition barriers and limited Canadian work experience. A forward-looking Canada immigration policy must focus not just on bringing workers in, but also on ensuring fair access to employment opportunities, training programs, and faster credential recognition.

3.3 Social Integration and Cohesion

Canada’s multicultural model is admired worldwide and often cited as a strength of its immigration system. Yet, as immigration-driven growth continues, public surveys reveal rising concerns about assimilation, cultural cohesion, and pressures on social unity. These debates are especially visible in Quebec, where language and cultural identity play central roles.

Balancing diversity with shared national values has become a critical task for Canada immigration policy. Strengthening integration programs—such as language training, employment pathways, and community initiatives—will be essential for ensuring that immigration continues to enrich Canadian society while maintaining cohesion and inclusiveness.

Section 4: Immigration Policy Evolution

4.1 Historic Context

• Post-WWII: immigration ~150,000 annually.

• 2000–2015: averaged ~0.6% of population.

• 2015–2024: Liberal government expanded targets to reach 500,000 per year by 2025.

4.2 2025–2027 Adjustments

Faced with housing shortages and strained healthcare, Canada revised its targets downward:

• 2025: 395,000

• 2026: 380,000

• 2027: 365,000

This reflects an effort to match immigration with absorptive capacity.

4.3 Public Opinion and Political Shifts

While most Canadians support immigration, recent polls show rising concerns about affordability, job competition, and cultural integration. Policymakers are now balancing economic needs with public acceptance.

Section 5: Building a Sustainable Population Strategy

The C.D. Howe report emphasizes that immigration must be part of a broader toolkit:

1. Delayed retirement policies—encouraging seniors to remain in the workforce.

2. Infrastructure investment—housing, healthcare, and transit must expand alongside population.

3. Regional settlement strategies—encouraging newcomers to smaller provinces and towns.

4. Labour market reforms—streamlining credential recognition and boosting productivity.

5. Social integration policies—fostering cohesion while celebrating diversity.

Conclusion: Canada Immigration Policy and the Balancing Act Between Growth and Sustainability

Canada’s demographic future stands at a crossroads. On one hand, the country has become a global leader in using immigration to sustain population growth, accounting for nearly all of the increase in recent years. On the other, it faces mounting structural challenges—aging, housing shortages, regional disparities, and pressures on healthcare—that cannot be solved through immigration alone.

1. Immigration as the Growth Engine

It is undeniable that immigration has given Canada its momentum. Without it, the population would stagnate and eventually decline, mirroring the trends already seen in countries like Japan, Italy, and South Korea. By 2023, immigration represented 98% of total population growth, a staggering figure that highlights both its importance and its risk. A system that depends almost entirely on immigration for growth is vulnerable to economic downturns, shifting political climates, or declining public support.

But immigration’s role is not just about numbers—it is about rejuvenating the workforce, replenishing cultural vitality, and sustaining economic dynamism. Canada’s tech industry, healthcare sector, and construction workforce would all struggle without immigrant talent. At the same time, Canada’s reputation as a welcoming, multicultural nation depends on maintaining this flow.

2. The Limits of Immigration Alone

Yet, as the C.D. Howe Institute’s research shows, immigration—even at very high levels—cannot fully offset the effects of population aging. The old-age dependency ratio rises under every scenario. Whether Canada admits 300,000 or 900,000 newcomers per year, the share of seniors in the population continues to grow. Immigration slows the pace of aging but does not stop it.

This reality forces Canadians to acknowledge that Canada immigration policy is a tool, not a cure-all. If the government continues to increase immigration without addressing infrastructure, affordability, and workforce integration, the system risks becoming unsustainable.

3. Pressures on Housing, Healthcare, and Cohesion

The consequences of rapid population growth are already visible. Housing affordability in Vancouver and Toronto has reached crisis levels. Healthcare wait times have increased, even as immigrants contribute significantly to the sector. Educational institutions face record demand. And while public support for immigration remains high compared to other countries, concerns are growing about whether Canada is taking in more people than it can effectively integrate.

This is why the federal government has already adjusted immigration levels downward for 2025–2027. While these adjustments are politically delicate, they represent an acknowledgment that sustainable growth must be tied to capacity.

4. A Comprehensive Population Strategy

Immigration should be seen as one pillar of Canada’s population strategy, complemented by other measures:

• Raising labor force participation: Encouraging older Canadians to remain in the workforce longer.

• Investing in infrastructure: Expanding housing, transit, and healthcare at a pace equal to immigration levels.

• Regional settlement: Incentivizing newcomers to settle in smaller provinces, mid-sized cities, and rural regions.

• Supporting families: Affordable childcare, housing incentives, and family-friendly policies to gradually raise fertility rates.

• Integration and inclusion: Stronger language, employment, and cultural programs to maintain cohesion in a more diverse society.

Without such measures, Canada immigration policy may ease one challenge (population decline) while aggravating others (housing, affordability, social cohesion).

5. Lessons from the World

Canada is not alone in facing demographic challenges. Japan has resisted large-scale immigration and now struggles with labor shortages and a shrinking economy. Germany has used immigration to offset workforce decline, but still faces integration challenges. Australia uses regional settlement requirements more aggressively than Canada, helping distribute growth beyond major cities.

The lesson is clear: immigration works best when combined with domestic reforms and long-term planning. Canada, with its history of thoughtful immigration policy, is well-positioned to lead by example.

6. The Path Forward

Balancing Canada’s population growth with aging is not about choosing between “more immigration” or “less immigration.” It is about choosing smart immigration through Canada immigration policy—levels that match the country’s economic, social, and infrastructural capacity.

If policymakers adopt a long-term, coordinated strategy, Canada can maintain its prosperity, uphold its multicultural values, and remain an attractive destination for talent and families. But if growth outpaces integration, the risks are significant: declining public support, political polarization, and systemic strain on services.

Final Thought

Canada’s demographic future is not written in stone. Immigration will continue to be a central driver of growth, but it must be supported by a comprehensive national plan that aligns population growth with capacity. The key is balance: balancing seniors with workers, newcomers with infrastructure, and diversity with cohesion.

If Canada succeeds, it will not only secure its own future but also stand as a global model for how Canada immigration policy can be managed responsibly in an aging world. In that sense, Canada’s population strategy is not just a domestic issue—it is a lesson for the 21st century.

Contact Surrey Immigration today—and take your first step toward a brighter future in Canada!