Canada’s Heavy Immigration Is The Last Pillar Preventing A Recession

Canada’s booming population growth is the only thing separating the country from a recession. There’s been a lot of talk about Canada’s massive growth in gross domestic product (GDP). There’s also been a lot of talk about Canada’s population boom, driven largely by immigration. However, few people seem to be discussing what the combination of the two means. When looking at GDP per capita (i.e. in the context of population), growth is falling at a rapid pace. In fact, lower growth has only typically been observed around recessions.

GDP Per Capita

The term is simple enough to figure out, but the reason it’s more important than a straight GDP read is less obvious. Gross domestic product (GDP) is a measure of a country’s aggregate economic output. That is, a measure of the total value of goods and services created/provided in a country. GDP per capita is the value of those goods and services, divided by the number of people. By just dividing GDP by the population, you get a much better view of the numbers.

A country may have large economic growth, but it doesn’t mean a whole lot if the population is growing faster. By itself, GDP is the world leader equivalent of a d*ck measuring contest. The primary benefit is being able to compare your economy to another. If GDP per capita is falling though, it means your population may be suffering from an eroded standard of living. Now what do you care more about? That your economy is bigger than a country you’ve never been to? Or whether you and your neighbour are seeing the benefits of economic growth?

Canada’s Population Boom Is Almost All Immigration

Let’s touch on Canada’s population boom quickly to give some context. The population grew 1.4% in July, when compared to a year before. This is the fastest growth of any G7 country, and more than 2x the United Kingdom. Over 82% of the growth we’re seeing today is driven by immigrants and non-permanent residents. Canada last saw growth this large in 1990, during the last major housing crunch.

Canada’s GDP Growth Is Also Huge… Kind of

The headline number for economic reports is GDP, and the most recent growth number was really big. The Canadian economy grew 3.7% in Q2 2019, on an annualized basis. The annualization needs a little emphasis. In Q1 2019, growth was just 0.4% on an annualized basis. That’s a big swing for a quarter, and is partially due to inventory rising and falling 28%, but that’s a different conversation. The point is, there’s a huge amount of seasonal impact, even with adjusted numbers. A read on a good economy, or a bad one, based on a single GDP growth point is next to useless for practical reasons. Great boasting point though.

Real GDP Per Capita Is Falling Close To Zero

If compared to the population growth, that impressive GDP really isn’t impressive. In fact, a notable Canadian economist called the GDP a “growth mirage.” Real GDP per capita was $55,480 in Q2 2019, up just 0.2% from the year before. Not exactly the massive growth typical of a booming economy.

Canadian GDP Per Capita

Gross domestic product (GDP) per capta, based on national Q2 population estimates.

Source: Statistics Canada, Better Dwelling.

Canada hasn’t seen growth like this very often, and it almost always is during a not so fun time. This is the lowest growth since 2016, during the “oil patch” recession that started a year before. Prior to that, numbers lower than this were seen in 2008, and 2009 – during the Great Recession. Prior to that, we need to go all the way back to 1990 to 1992, at the end of the last population/housing boom.

Canadian GDP Per Capita Change

The percent change in Gross domestic product (GDP) per capta, based on national Q2 population estimates.

Source: Statistics Canada, Better Dwelling.

Love it or hate it, Canada is using immigration as economic stimulus. On one hand, the rise in immigration improves spending and home values. On the other hand, households are only seeing a minor improvement in the standard of living. The minor improvement is really not reflective of the healthy economy narrative being told. Even more concerning is a substantial amount of this minor improvement, is based on debt.

Like this post? Like us on Facebook for the next one in your feed.


We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Trader Jim 2 years ago

    Bingo. Even if immigration were cut in half, like many people are asking for, that economic growth would be negative.

    • Ethan Wu 2 years ago

      Don’t forget the impact of wealth effect. Higher immigration, squeeze on land values. Everyone thinks they’re rich, and withdraws money.

      No one seems to remember that immigration is expensive for immigrants that provide economic output. No immigrants due to no opportunity, and the land squeeze flattens. It’ll be interesting to see how the removal of the wealth effect changes everyones spending habits.

      • Mtl_matt 2 years ago

        Not just that, everyone that immigrated in the last twenty years telling the people back home that they’re now millionaire just because they bought a home in 1999 is a pretty big motivator to come here and buy a house.

        The big question is how attached are they to the country if things go south. Will they just move to the US if they’re underwater on RE bought at the peak?

  • Jeff 2 years ago

    Forgive my ignorance if I don’t get this, but does that mean GDP would be closer to -1.4% if there was no immigration? Or -0.5% if it was cut in half?

    • Chris 2 years ago

      No, it’s worse. Immigrants have a median age of 35, so they’re in their prime earning years. The loss would be even higher, times velocity.

  • Quan 2 years ago

    Spicy. Think of how much economic activity an immigrant generates too. They need a house, a car, they’re a new source of taxes and revenue to a neighborhood. Especially since Canada stopped taking in real immigrants, and we’re now just wealthy immigrants, and the children of oligarchs.

    • Mary 2 years ago

      Immigrants simply compete with Canadians for housing and other scarce resources which is why our standard of living falls with each new immigrant. Canadians won’t learn apparently until they are seriously financially impacted and by then it will be too late for peaceful answers. Sad!

  • Robert 2 years ago

    Hi Stephen. Good point of importance of “per capita” vs. absolute measure of GDP. Every few weeks there is also article on this blog about rising debt. Those charts also need to account for number of people this debt is spread to. And even more interesting it would be great if it also accounts for historical interest rates which gives you carrying cost of debt. So if you can produce historical chart showing year by year “cost of carrying RE debt per capita” (on average) – this should give nice insight on affordability. Looking forward to this data

    • Ethan Wu 2 years ago

      Debt per capita is a silly way of looking at things. Everyone below 20 has no debt, and everyone above 65 has little debt. I’m in my 40s, and own my home outright. Everyone generates economic activity. Whether it’s a senior buying medication, or baby driving demand for diapers.

      Applying per capita to debt numbers is about as dumb as trying to inflation adjust population. The reason people discuss debt numbers are because you’re suppose to compare them to aggregate GDP numbers. i.e. $3 billion in credit was used, and generated $3billion in GDP is a wash.

      • Chris 2 years ago

        There’s also the credit financing aspect. When the BOC injected $500 million into the mortgage market this year, going “oh, it’s just $13 per capita” doesn’t mean anything, when knowing the $500 million suppressed mortgage rates by up to 10%.

      • LT 2 years ago

        lol. Waiting for BNN to start doing that. “Population grew 1.6%, but inflation adjusted this was negative.”

    • MH 2 years ago

      The household debt-service ratio is at the all-time highs:

      Here is your insight into the “affordability”, not to mention that this sleight of hand is routinely used by the RE industry to substitute the cost of debt carried for the affordability of housing. True housing affordability is based on the price/income multiple.

  • CanadaSucks 2 years ago

    Canada is a failed nation. Only a failed nations will use immigration as a way to generate GDP. Immigration will only last while the dollar is not too low.

    • A 2 years ago

      yes, exactly Canada is a pathetic, failed place–what country needs to rely on newcomers to prop itself up?

  • Average Man 2 years ago

    At some point immigrants are gonna realize they’re what’s keeping the ship afloat and stop coming though, right?

    • Failed Immigrant 2 years ago

      Come to Canada.

      Leave your middle class job.

      Sell all of your assets.
      Transfer your life savings to Canada.

      Come to Canada.

      You need Canadian experience for job.

      $2,000 a month to rent cockroach apartment in area where criminals act with impunity.
      You need Canadian experience for job.

      Your wife leaves you because Canadian girls say you are too barbaric.
      You need Canadian experience for job.

      $2,000 rent is due. Landlord knocks on your door demanding payment.
      You need Canadian experience for job.

      Work for free for Canadian experience.
      $2,000 rent is due. Landlord evicts you.

      Working for free.
      Living as a second class citizen.
      Working for free.

      Company lies to you and claim that they are terminating your contract before you ask for a salaried job.

      You need PAID, Canadian work experience for job. And also tons of requirements, sensitivity training, changing your accent and behaving in a way which doesn’t offend the local Canadians who judge you negatively because you’re immigrant.

    • SH 2 years ago

      So Canada will just find other sources of immigrants. Every time the Liberals are in power they will explode the immigration numbers in order to import Liberal-voting blocs. This isn’t about economic growth, it’s about politics.

  • jonny Boy 2 years ago

    Very interesting point:
    Canada population/ mortgage debt = 33. mil/2.3 trillion
    US population/mortgage debt = 350 mil/ 9.5 trillion.

    Canada being 1/10th population wise of the US but has twice as much of mortgage debt per capita. Honestly looking at the number alone scares me. The article mentions Immigration increases. I have a few questions, how much of a strain will it put on a healthcare system that are already seeing record wait times and lack of quality doctors. How much of a impact will these people have on job opportunities, more people less wage. What about existing infrastructure more people on the roads and schools.
    Outside of what Re Agents, Homeowners or the Government tell us we are in huge trouble.

  • Morty Mcfly 2 years ago

    GDP over total population replacement from the 3rd world , take your pick. These idiots think we will grow forever at too high of a price.

  • Balter 2 years ago

    Then let’s have a recession and get it over with: we’ll be better off for it, the country is being swamped with people who don’t understand our culture and who don’t want to.

    • F. Hasman 2 years ago

      What culture? Was there one learnt and understood from the aboriginals? This is a great article demonstrating how well Canada survives economic power with great forecasting calculations from the 70s. And we shall weather the storm should the influx of immigrants continue.

    • Sophia 2 years ago

      I was trying to add comment to this article but it gets rejected. Is this a free site that anyone can post an opinion.?

  • straw walker 2 years ago

    Immigration, causes more stress on our medicare system, our education system , our social systems, and most importantly our housing and employment problems. As more immigrants pour into our country it puts more downward pressure on wages.
    It now seems that our whole country runs on minimum wages..
    When the cup is full as Canada’s population is… immigration needs to end.
    The idea that immigration increases our economy..only exists in the minds of University profs.

  • SH 2 years ago

    Mass immigration pads the GDP numbers but is lousy for wage growth and quality of life of Canadians who are gradually being pushed out of their own cities by foreign nationals. And if you claim that this globalist displacement of native-born in favour of foreigners happens in every large Western metropolitan area, you are wrong. Not on the scale of Toronto and Vancouver. Sydney, Australia might come close.

  • SUMSKILLZ 2 years ago

    I would not say folks are immigrating to Canada. More like just a few Canadian cities. Migrants have no interest whatsoever in most of the country. Mega city economies are being sustained but other regions are suffering horrendously. You don’t see that in merged figures.

  • yangyun 2 years ago

    Canada and others are in a per-capita recession , with no ideas what to do except lower interest rates further and put future generations into even more debt. Shame!

Comments are closed.