The Economic Contribution of Immigrants to Canada

Let’s start at the most attention-grabbing fact: Canada’s population would barely grow if not for immigration. According to Statistics Canada, more than 75% of the country’s population growth comes from immigrants, and by 2036, immigrants are expected to account for almost 100% of it. In a country where the birth rate hovers around 1.5 children per woman—well below the replacement level of 2.1—immigration becomes not just a benefit, but a necessity for economic survival.

But what does this mean for Canada's economy? Immigrants contribute immensely to labor force growth, innovation, entrepreneurship, and the broader economy. The economic argument for immigration is clear: as Canada’s native-born population ages, immigrants bring youthful energy and skills. By 2028, it is estimated that 13 million job vacancies will need to be filled in Canada. Immigrants will be the primary drivers filling these roles. Without them, Canada's economic engine could stall.

Let’s dive deeper into the specific economic contributions of immigrants across different sectors and metrics.

Immigrants as Job Creators and Entrepreneurs

One of the most underappreciated roles immigrants play is as entrepreneurs and job creators. In fact, according to data from the Business Development Bank of Canada (BDC), immigrants are more likely to start businesses than their Canadian-born counterparts. As of 2021, nearly 30% of all businesses in Canada were owned by immigrants, a number that continues to rise each year. These businesses are not just small operations; many grow into substantial companies that employ thousands of Canadians.

Some of the most famous Canadian companies founded by immigrants include Lululemon Athletica, founded by Chip Wilson, the son of Norwegian immigrants, and Magna International, a global automotive supplier founded by Austrian-Canadian Frank Stronach. These businesses generate billions of dollars in revenue each year, driving innovation and providing jobs for tens of thousands of Canadians.

Why are immigrants so entrepreneurial? One reason is their risk tolerance and adaptability. Many immigrants arrive in Canada with little but the clothes on their backs and a fierce determination to succeed. This resilience and determination translate well into business ownership. Moreover, immigrants often bring a global perspective that helps them identify unique business opportunities that others might overlook.

Filling Labor Gaps in Critical Industries

Canada's aging population and low birth rate have created significant labor shortages in sectors like healthcare, construction, technology, and agriculture. Without immigration, these industries would struggle to function. Healthcare, in particular, is heavily reliant on immigrants. Foreign-born professionals, including doctors, nurses, and caregivers, make up a significant portion of the workforce. In some regions, over 35% of healthcare workers are immigrants, and this percentage is even higher in urban areas like Toronto and Vancouver.

Similarly, the tech sector—one of Canada’s fastest-growing industries—depends on immigrants to fill highly skilled positions. As of 2022, nearly half of all tech workers in major cities like Toronto and Vancouver were immigrants. These individuals bring specialized skills and international experience that give Canada a competitive edge in the global market.

Let’s not forget agriculture. Canada is one of the world's largest exporters of agricultural products, but the industry relies heavily on seasonal workers from countries like Mexico and Jamaica. Without these workers, the industry would face severe labor shortages, jeopardizing Canada’s ability to feed both its own population and export goods abroad.

Higher Levels of Education and Skill

Contrary to outdated stereotypes, today’s immigrants are highly educated. In fact, immigrants to Canada are often more educated than Canadian-born citizens. According to Statistics Canada, over 50% of immigrants who arrived between 2011 and 2021 held a university degree, compared to 30% of Canadian-born individuals.

This high level of education contributes directly to the economy. Highly educated immigrants tend to earn higher incomes, pay more in taxes, and spend more on goods and services—boosting the overall economy. Moreover, immigrants with advanced degrees often fill roles in sectors like engineering, medicine, and research and development, driving innovation and economic growth in these critical areas.

Contribution to Tax Revenue and Public Services

Taxes collected from immigrants are vital for funding public services such as healthcare, education, and social welfare programs. Immigrants, particularly those in their prime working years, contribute significantly to the public purse. Given that many immigrants arrive in Canada during their most productive years (between ages 25 and 44), they often contribute to tax revenues for decades before requiring extensive healthcare or social services themselves.

Moreover, immigrants help sustain Canada's pension system. As the Canadian population ages, the ratio of workers to retirees is shrinking. Without immigration, there would be fewer workers paying into the pension system, creating a significant financial strain. Immigrants help balance this equation by increasing the number of contributors to the pension fund, ensuring that retirees receive the benefits they’ve been promised.

Cultural and Economic Integration

One of the most significant benefits of immigration is the diversity and innovation it brings to the marketplace. Immigrants introduce new ideas, products, and services that enrich Canadian culture and drive economic growth. Think of the vibrant culinary scene in cities like Toronto and Vancouver, where you can find restaurants offering everything from Ethiopian injera to Vietnamese pho. These businesses are often immigrant-owned and attract both locals and tourists, contributing to the local economy.

Beyond food, immigrants also bring diverse perspectives that enhance creativity and innovation in the workplace. Research shows that diverse teams are more innovative and better at problem-solving, which leads to higher productivity and economic growth. Companies that embrace diversity are more likely to succeed in today’s globalized world, and immigrants play a key role in fostering this diversity.

Addressing Myths About Immigration

Despite the overwhelming economic benefits, immigration remains a politically charged issue, with some arguing that immigrants take jobs away from native-born Canadians or burden social services. However, research consistently shows that these claims are myths.

1. Job Competition: While it’s true that immigrants join the labor force, they also create new jobs by starting businesses and increasing demand for goods and services. In fact, a study by the Conference Board of Canada found that immigration boosts wages for native-born Canadians by increasing overall economic activity.

2. Use of Social Services: Some argue that immigrants disproportionately use social services, but this is not supported by the data. In reality, immigrants are less likely to rely on social assistance than native-born Canadians. Moreover, they contribute significantly to the tax base, which funds these services.

The Future of Immigration in Canada

As the world becomes more interconnected, immigration will continue to be a driving force behind Canada’s economic success. Canada's federal government has already recognized this, setting ambitious targets for immigration in the coming years. The goal is to bring in 500,000 immigrants annually by 2025, focusing on attracting skilled workers who can fill labor shortages in critical sectors.

However, this will require careful planning to ensure that immigrants can integrate smoothly into the labor market and society. Canada must invest in programs that help newcomers get their foreign credentials recognized, provide language training, and offer support for starting businesses.

Conclusion: A Win-Win Scenario

In the end, immigration isn’t just a solution to Canada’s demographic challenges—it’s a key driver of the country’s economic future. Immigrants bring skills, energy, and new ideas that fuel economic growth and innovation. They fill labor shortages, start businesses, and contribute to the tax base. Without immigrants, Canada would face slower economic growth, labor shortages, and a declining population.

The economic contribution of immigrants is undeniable, and their role will only become more important as Canada continues to evolve in the global economy.