'Most of the city is evacuating': Gridlock on Alberta highway after evacuation order in Fort McMurray
Four Fort McMurray neighbourhoods were ordered to evacuate on Tuesday as a wildfire gets closer to the city.
Canada has recorded the fastest population growth in 66 years, increasing by 1.3 million people, or 3.2 per cent, in 2023, according to a new report from Statistics Canada.
The country has not seen such growth since 1957, when the spike was attributed to the baby boom and an influx of immigrants fleeing Hungary.
The vast majority of Canada’s growth last year was due to immigration, with temporary residents -- which includes foreign workers and international students -- making up the largest proportion of newcomers.
“We need people coming to Canada to help with our economy,” says Matti Siemiatycki, a professor of planning at the University of Toronto. “There are many jobs and professions where there are vacancies, and that is having an impact, whether in the healthcare sector or trades and construction sector.”
Siemiatycki adds immigrants also bring “ingenuity… resources… and culture” to Canada.
Newcomers are relied on to help keep pace with Canada's aging population and declining fertility rates, but the influx also presents a challenge for a country struggling to build the homes and infrastructure needed for immigrants.
“It's an incredibly large shock for the economic system to absorb because of just the sheer number of people coming into the country in a short period of time,” says Robert Kavcic. a senior economist and director with BMO Capital Markets.
“The reality is population can grow extremely fast, but the supply side of the economy like housing and service infrastructure, think health care and schools, can only catch up at a really gradual pace,” Kavcic says. “So there is a mismatch right now.”
The impact of that mismatch can most acutely be seen in the cost of rent, services and housing.
In December, Kavcic wrote in a note that Canada needs to build 170,000 new housing units every three months to keep up with population growth, noting the industry is struggling to complete 220,000 units in a full year.
To address this, Ottawa has announced plans to cap the number of new temporary residents while also reducing the number of international student visas, a move economists say could offer some relief when it comes to housing and the cost of living.
“The arithmetic on the caps actual works relatively well because it would take us back down to 1 per cent population growth which we have been used to over the last decade and which is more or less absorbable by the economy,” Kavcic says. “The question is whether or not we see policy makers follow through and hit those numbers.”
Economists believe these changes could help ease inflationary pressures and may make a Bank of Canada rate cut more likely, but could also lead to slower GDP growth.
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