Arta Desku
The National Bank of Canada says that the country’s economy has shrunk to a level “unprecedented outside a recession”. This is partly due to the significant increase in population after immigration, which has led to a decline in the growth of GDP per person.
Based on the recent report of the company, the signs of an economic slowdown have been multiplying, VisaGuide.World reports.
Indeed, third-quarter GDP data came in below economists’ consensus expectations, showing outright contraction, notably due to a drop in private domestic demand. Consumption stagnated for the second quarter in a row, a stinging setback in the current demographic context characterised by record population increases.
The GDP per person has decreased by 4.4 per cent on an annual basis in the third quarter, while Canadian business owners are now most worried about the demand within the country.
The report also notes that for five years, Canada’s GDP has marked a decrease. Economist Mikel Skuterud from the University of Waterloo attributes this phenomenon to the population boom in Canada.
I think you’d be hard-pressed to find any economist in Canada that doesn’t believe that the exceptionally high population growth rates we’re experiencing now have contributed to that decline in GDP per capita that we’re seeing.
However, he said that immigration is not the only reason leading to the slowdown in GDP per capita. According to him, simultaneous to the above-mentioned trend is the inflation rate, which is at 3.1 per cent and is causing the cost of shelters to rise at an annual rate of six per cent.
Besides, according to the report, the growth in people is leading to more unemployment, after there are not enough jobs for the number of persons coming to this country, with the unemployment rate increasing to 5.9 per cent in November, an increase of eight-tenths in just seven months.
In 2023, authorities in Canada logged 526,000 new permanent residents or newcomers, with the country already accounting for 38 million.
Authorities in Canada unfolded plans to welcome nearly 1.5 million new immigrants between 2024 and 2026, accounting for a notable increase from the previous year.
However, internal documents obtained by the Canadian Press revealed that two years ago, federal public servants warned the government about the potential impact of significant increases in immigration on housing affordability and services as well.