In a recent National Bank article, two economists wrote about the higher-than-usual immigration into Canada, warning Canadians of a so-called “population trap.” Their term refers to “a situation where no increase in living standards is possible, because the population is growing so fast that all available savings are needed to maintain the existing capital labour-ratio.”
Essentially, these banking advisors argue that Canada’s population is growing too fast for its economy and housing market, lowering living standards over time for the rest of Canadians. This rhetoric has been gaining some traction among the media and papers including The Globe and Mail, who assert that Ottawa’s population trap is the thing causing poverty. Further, Immigration Minister Marc Miller described his own liberal government’s immigration policy as a “system that has gotten out of control” and announced a two-year cap on study permits for international students in January.
This idea, which a couple of years ago might have been labeled as “Trumpian”, is coming right out of Canada’s most “sophisticated” politicians and economists.
In 2023, Canada witnessed a surge in population of 1.25 million people, most of which stemming from immigration. In the third quarter of 2023, immigration added 430,000 to Canada’s population. This is rapid growth by today’s standards, but Canada has seen much higher rates both in the early 19th century and immediately following World War Two.
That immigration statistics have been shooting up in recent years is not in question. The critical question at hand, and which is ignored by these bankers and economists, is exactly why immigration levels have increased?
As data shows, the admission of temporary workers and students is usually due to the needs of individual employers and post-secondary institutions and not a sudden desire to “take up resources”, as these economists claim. After the “Great Resignation” of workers during COVID-19, many employers opted to tap into Canada’s temporary foreign worker program to replace their domestic, laid off workers. Many foreign workers came from countries with lower wages, like India and the Philippines. Simultaneously, students’ restrictions on their ability to work in Canada were lifted. This cheaper labor was pounced on by businesses hoping to continue being profitable past the pandemic. Overall, Canada’s high levels of immigration are driven not from “liberal ideology” as right-wingers would have one believe, but the economic demands of business and post-secondary institutions, which exist due to the governmental neglect of higher education.
These economists have taken two facts, declining living standards and increasing immigration level, and merged them together to make the old Malthusian argument of overpopulation. In their own words, the population growth is exceeding the existing capital-labor ratio. This means a situation where the population grows faster than the machines, factories, housing and technology to sustain that population.
In the wake of World War Two, Canada experienced much higher rates of immigration as a percentage of the population. Instead of fear-mongering about ‘population traps’, there was intense optimism about the growth. That was because Canada experienced one of the highest boosts to living standards in the nation’s history, as the rate of economic growth grew as fast, or faster than the population depending on the year. The problem with Malthus’ population trap is that it assumes the wealth and means of production of society is more or less fixed when it is not.
The real cause of growing inequality and poverty is the slowing growth of production. There is more than enough wealth to feed, house, clothe and employ everyone in Canada–its sitting idly by in banks and on speculative markets. Additionally, there is lots of work that needs doing from setting up renewable energy sources to preventing wildfires. The problem is that investment in labor and fixed capital formations for capitalists is no longer profitable.
From 2011 to 2015, Canada’s level of investment into fixed capital formations ranked 37th of 47 advanced countries according to the OECD. Likewise, in 2022 U.S. capitalists invested more than 3 times per worker than their Canadian counterparts.
This shows that Canadian business investment was low long before the recent uptick in immigration, which has increased due to slowing global economies, wars and genocides.
These capitalists and capitalist defenders in all their hurry to fearmonger about immigration are only providing the most vulgar and cynical defense of capitalist misery. In an area as vast and abundant in resources as Canada, there are more than enough homes and healthcare to provide for everyone. The problem is that it’s becoming less profitable to do so. To address this problem we need to address capitalism itself and specifically for its revolutionary overthrow. As long as this economic system is the basis of Canadian life, immigration, housing, education and many other societal questions will remain unanswered. The largest enterprises should be taken into public ownership and their resources deployed for productive use under a central economic plan. This plan would be guided by the needs of the many, not of the powerful few.
Edited by Mayah Esmail
I am a fourth year political science major interested in journalism and creative writing. I am also very interested in the labour movement and I try to write from the perspective of the labour movement and specifically what are the next steps to further the scope of the movement. I analyze current events and show how we can intervene in them to bring about a fairer society.