Understanding the Impact of Immigration on Demography: A Canadian Case Study
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Highlights
All of Canada’s labor force growth now comes from immigration, yet even high admission rates cannot halt population aging or significantly lower the old-age dependency ratio.
- Canada’s labor force grew by 2.8 million people, nearly 15 percent, over the decade ending in September 2024, with all growth driven by immigration as the Canadian-born labor force stagnated.
- In 2022–23, Canada’s population grew 5.2 percent—97.6 percent attributable to international migration—spurring a backlash over housing and infrastructure and prompting a 20 percent cut in permanent immigration in 2024.
- Demographic projections show immigration expands the population efficiently but does little to reshape age structure; raising the retirement age to 70 would more effectively reduce the old-age dependency ratio.
- Canada must plan for a simultaneously larger and older society, pairing immigration with housing investment, infrastructure, and fiscal adjustments, supported by transparent, long-horizon public communication.
Canada, like many other high-income countries, is facing a stark demographic transition as its fertility rate drops and its population ages. This transition points to challenges on the horizon for these societies as they navigate the prospect of a shrinking workforce and the need to support a growing retired population with diminishing tax revenues.
Immigration is one tool that Canada and other countries have used to help counteract these trends. In fact, the growth of the Canadian labor force in recent years has been driven entirely by the admission of temporary and permanent immigrants. Yet high rates of immigration have also caused public opinion to sour on immigration, with many Canadians citing concerns about its impacts on housing costs and public services.
This Transatlantic Council on Migration report takes Canada as a case study to explore the questions: How effective is immigration in alleviating the challenges of low fertility and population aging? And what are the costs associated with different policy approaches, in terms of population growth and attendant infrastructural needs? To do so, the study analyzes special projections of the Canadian population commissioned from Statistics Canada.
Table of Contents
1 Introduction
2 Canada’s Demographic Challenge and Recent Immigration Policy Responses
What Kind of Immigrants?
3 Population Projections
A. A Custom Glimpse of the Future
B. The Efficiency of Policy Choices
C. Geographical Complications
4 Conclusion: Planning for Demographic Change
Short and Long Policy Horizons
About the Transatlantic Council on Migration
Through rigorous research, high-level convenings, and tailored policy advice, the Council provides policymakers with essential analysis and cutting-edge policy recommendations to help tackle the most vexing policy questions.
About the Global Program
The Global Program bridges policy advice, research, and candid dialogue to design effective migration policies, drawing on global evidence and anticipating the forces reshaping how people move.
