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Canadian Economy Heavily Reliant on Non-permanent Residents (Audio)

by Colin R. Singer / Friday, 01 May 2015 / Published in April

According to a report by the CIBC, the number of non-permanent residents in Canada has more than doubled over the past decade. In total, there are almost 770,000 non-permanent residents in Canada – 450,000 more than there were 10 years ago – and they have a substantial impact on the housing market and consumer spending.

Almost 50 per cent of non-permanent residents are workers on contracts, and 38 per cent are students, while the rest fall in the humanitarian or refugee category.

Most of the 384,200 non-permanent workers are employed in middle-income professional jobs and expect to gain permanent resident status in Canada.

As a result, they provide a substantial boost to demand for rental properties, with some even buying property despite their temporary status. These non-permanent workers also contribute significantly to overall retail spending just like any other middle-income Canadians.

Most should be viewed as an important demographic force capable of influencing and potentially altering the trajectories of macro-economic variables such as housing activity and consumer spending according to a recent report prepared by CIBC.

Additionally, almost 95 per cent of these non-permanent workers are under the age of 45, making them an important part of the demographic of young workers that are vital for sustaining Canada’s ageing population.

The CIBC report highlights the powerful demographic and economic impact of non-permanent residents in British Columbia and Ontario. Between 2006 and 2013, there would have been a decline of 120,000 individuals in the 25 to 44 age segment of the population in Ontario if not for non-permanent residents, while B.C. saw all of its growth since 2006 in the 25 to 44 age group come through non-permanent residents.

The CIBC report underlines the important contribution non-permanent residents make to the Canadian economy, which the federal government should keep in mind when making policy decisions concerning TFWs.

“The main issue is to take into account the economic impact of such large numbers. The number is big enough to change the trajectory”, the report concludes. “The numbers are simply too large to ignore. Non-permanent residents is a major demographic force with significant macro-economic implications.”

Canada overhauled the temporary foreign workers program in 2014, placing restrictions on the number of TFWs that could be hired by a single employer, as well as limits on hiring TFWs in regions with high unemployment rates.


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