The Conference Board of Canada’s latest analysis of Canada’s macro demographics tell us that one in four people are going to be 65 years or older in 2040. You marry that with the continuing low Canadian birth rate, and it’s a formula for economic disaster. If we want to maintain Canada’s famous social infrastructure, and enjoy the life that we have, there are no options. We simply need more people.
But what about all the kids who are going to be graduating from the schools and entering the workforce? The Conference Board of Canada calculated that between 2018 and 2040, there will be 11.8 million Canadians finishing school and entering the workforce. However, 11.4 million workers will be retiring, so the number of new entrants is not very helpful.
By 2030, the 9.2 million Baby Boomers, who have been the dominant work cohort for decades now, will be retiring.
Canada needs a workforce to stimulate the economy and feed tax revenues that makes all our great lifestyles possible – and the numbers don’t lie. People age 65 and over are going to make up 25% of our country’s population, as compared to only 17% today. There is no reason to anticipate that our low birth rates will change as we’ve been stuck at 1.5 average kids per household for years.
The solution is immigration.
The Conference Board brainstormed other alternatives. What if we had more females or more Indigenous people or people with disabilities join the workforce? Their calculations indicated that would add only 2.2 million people to the workforce. That is simply not enough.
These numbers support what we’ve been hearing from various Governments for years. Our Government’s economic growth strategy is immigration. The only thing the various political parties, and others, argue about is how many, and what kind of immigrants. The great debates have been about whether immigration should remain at or about the 300,000-person level, or as others have argued, should be increased to as high as 450,000 new immigrants per year. Currently Canada is onboarding 320,000 new immigrants per year with that number expected to rise to 350,000 by 2021.
I won’t get into analyzing who is or should be immigrating but according to Statistics Canada, 52% of recent immigrants have at least a bachelor’s degree.
Compare that with only 24% of the Canadian-born population. Educated immigrants are coming and contributing to the economy, and to our culture, not living off unemployment insurance. In fact, 71% of newcomers who are in the country less than five years are employed. Furthermore, they are not replacing native-born Canadians and jobs. They’re actually creating more jobs as immigrants are more likely to start new businesses. Why? Because they are educated and sometimes under-employed… because their professional designation is not immediately recognized in Canada… and because sometimes they lack Canadian experience, which may be seen as a barrier to success by some corporations.
The other factor that comes into play is Darwin’s theory of “survival of the fittest”. Those individuals who are willing to leave the comfort of their homes, their families and friends, their jobs and their culture, and venture across the globe for a better future for themselves and their kids, are more likely to be the type of people who are risk-takers, and more willing to start new businesses.
All interesting reading, but what does all of this have to do with your business? There is lots to be said about that, but the primary lesson to be learned from the Conference Board of Canada’s analysis, is that immigration is an economic/revenue growth strategy for the Government and so it should be for your business.
For the foreseeable future, it is expected that 320,000 immigrants (and growing) will arrive every year, along with 570,000 international students. For those of you who are thinking, “Oh, they’re international students – they’re going to leave”, that’s not what the statistics tell us. Currently, 60% of foreign international students stay in Canada, so you’ve got the lifetime value you are looking for. We also know that those who remain are predominantly South Asian and Chinese students. This presents a great opportunity to businesses that have a product or service that is targeting or engaging with this population. Looking forward, it’s worth noting that the government has proposed legislation to make it even easier for international students to stay.
I don’t know a lot of businesses that can afford to ignore 320,000 potential new customers each year, let alone the 570,000 international students who are part of our communities. I guess that’s why the Conference Board’s report is called “Can’t Go It Alone – Immigration Is Key To Canada’s Growth Strategy”. I would argue that Canadian corporations can’t go it alone, targeting just mainstream Canadians. Immigration should be key to every business’s growth strategy.
Author: Howard Lichtman, Partner at Ethnicity Matters