Canada’s Immigration Boom May Be Ending, Permanent Resident Applications Plummet

Canada’s recent population boom seems like it’ll last forever, but reality may arrive soon. Government of Canada (GoC) data reveals a sharp drop in permanent resident applications in July. The direct impact on population growth is minor, since temporary residents drive growth. However, continuing to attract temporary residents will be difficult once they encounter the conditions turning people away.

Canadian Permanent Resident Applications Are Dropping

Canada recently experienced a sharp and sudden drop in permanent resident applications. The monthly volume of applications fell 15% to 17.8k in July, representing a 28% decline from last year. Monthly data is only readily available going back to 2020, but it was the worst July over that period. It was also the second month to show annual growth contract, and less than half the size of the May 2023’s peak. Not enough to be a trend, but there’s enough data to prevent dismissing it as an isolated issue.  

Permanent Resident Application Growth Has Been Decelerating

The sudden shift is unexpected, especially on the heels of what was on track to be record growth. There were 181.3k applications processed year-to-date as of July, about 15% more than last year. Prior to the past two monthly declines, year to date applications were growing at more than double the rate (31%). By itself, 15% annual growth is more than enough to dismiss concerns. However, the past two months of data shows just how quickly things can change.  

Applications To Canada’s Program To Help Skilled Labor Slows

Canada has been trying to promote its Express Entry program to attract skilled labor. Usually skilled labor arrives on a temporary visa, before earning a permanent visa. This program allows a certain group of in-demand labor to go right to permanent residency. If you know anyone that’s had to navigate the previous system, they’ll tell you how much better this new program is. 

The program is largely a success, but recent data shows a hiccup. July saw just 10.2k Express Entry applications, a drop of 17.5% from last year. One month isn’t a trend, but annual growth in Q2 (+8.3%) was nearly half the rate of Q1 (+16.2%). Growth deceleration is materializing, making negative growth a realistic threat in the event of a downturn. 

Population Growth Remains High, But Is Anyone Staying? 

Canada’s population isn’t contracting, but people may be getting skeptical of its offerings. A large number of temporary residents are arriving though visas like study permits. In fact, study permits have been so popular that nearly 1 in 48 people in the country are currently on one of these visas. However, data reveals students aren’t too keen on staying. 

Despite study permit issuance rising 35% in the second quarter, the share of those on study permits turning to permanent residency is relatively low. Canada minted 19.7k permanent residents that previously had a study permit in 2022. In contrast to the number of individuals with a study permit, the ratio is about 1 in 34. Those are worse odds than meeting someone with a net worth of at least a million dollars in the US. 

A lot of this likely has to do with Canada’s approach to population growth. Most places with high population growth need the growth to cope with a booming economy. People are attracted because they want to be part of that growth and opportunity. 

That isn’t Canada. Despite a population boom, per capita GDP is contracting. That shouldn’t surprise, since the OECD forecasts Canada dead last in this area. Instead of overflowing opportunities, immigrants are encountering an economy where the younger generation is doing worse than the previous generation. Have you ever heard an immigrant say, “we moved here so our kids couldn’t have what we did?” Probably not. 

Canada essentially just adopted the model of a dodgy credit card company—churn, baby, churn. Issue as many visas as possible to hit the targeted quarterly growth, and collect the bonus. Little focus on retention, a lot of focus on squeezing new arrivals for as much as they can provide. Not a compelling sales pitch, but the glossy brochure abroad probably has more compelling copy. 

It’s easy to promise opportunity, but eventually people want to see it delivered. 

14 Comments

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  • Igor 5 months ago

    I find myself apologizing for Canada way too often in Ubers around Toronto. I 100% sympathize with these kids that spend their family’s whole income to come study, only to find out they’re competing with domestic kids that have help from their well-heeled parents that find it difficult.

    • Chrisco 5 months ago

      Finally some proof in the pudding. Fifteen years ago when housing was reasonable across Canada you could feel the momentum in our society of wanting to upgrade your domain. We have been driven into a pause by the escalating home prices caused by government’s poor implementation of policy. The article hits it on the head. The Liberal’s thought to open the gates and let the market figure it out. They give little support or preparation for how it really impacts Canada as a whole.
      Finally the poor implementation of policy is showing its shortfalls and the pendulum swings as people in other counties recognize what we have been dealing with for some time. The federal government made sure Canada was a place that cost too much to put a roof over your head. This is despite having one of the lowest land to people ratios on earth with an abundance of natural resources that should have made these home costs lower.

  • Frank 5 months ago

    It was hard when I moved here in the 1995 too. Immigrants are tough, and the ones that want to make it will make it. The ones that fail will go back to an easier place. Simple.

    • Trader Jim 5 months ago

      You mean you moved here at the bottom of the last real estate cycle, just in time for interest rates to fall for the next 30 years and make it easier to pay off?

      Do you teach a class on how to born so enter adulthood at the bottom of the business cycle, and see the cost of your debt depreciate faster than inflation? I’d like to take it, if so.

    • Itchy Bear 5 months ago

      Remember in 1995, Homer Simpson was a somewhat believable character as a sole breadwinner with 3 kids, a house and 2 cars.

      What do you imagine making it looks like for this cohort?

      • Average Man 5 months ago

        100%. The Canada Frank immigrated to is the one I was raised in. It is not the one we have right now. “It was always hard to be young and get established,” say the Canadian-born Boomers. “It was always hard to be an immigrant,” say the immigrant Boomers. Sure. But this is different. The last 10 years are different. Let’s just admit this.

    • Fox 5 months ago

      Min. wage was $6, and rent for a one-bedroom was $400-$600 a month. Tell me again how it’s easy working for $16 an hour, and paying $2,400 a month in average rent?

    • Fox 5 months ago

      A can of tuna was 59 cents in 1995. Now that same can has less grams, and is now $1.59. Newcomers will be shocked at the low wages and high prices.

  • Mark Bayly 5 months ago

    Plenty of immigrants will want to come here from very poor countries with no skills. They will bankrupt the provincial economies with all the Cadillac social services they receive but the feds will let them in anyway

    • Marc 5 months ago

      In order to immigrate to Canada you cannot be poor. Check the facts. It is very costly to get here. No poor person can afford it. Also the express entry system seeks to take person with the highest points who have higher education etc.

  • VK 5 months ago

    I immigrated here in 2009 as an international student. Built a fairly successful career, married another immigrant with a similar story, and recently had a child. It wasn’t easy, but it was doable. Now it’s becoming a grind, and we as immigrants, are used to it. But, I no longer see the trade off.

    My sibling came here in 2019. Different story with a different set of cards dealt to play. We’re seriously considering relocating, which is a shame. I keep hearing similar stories from other young families. I am grateful for my journey, but it’s very unfortunate to see this happening.

  • Chrisco 5 months ago

    Finally some proof in the pudding. Fifteen years ago when housing was reasonable across Canada you could feel the momentum in our society of wanting to upgrade your domain. We have been driven into a pause by the escalating home prices caused by government’s poor implementation of policy. The article hits it on the head. The Liberal’s thought to open the gates and let the market figure it out. They give little support or preparation for how it really impacts Canada as a whole.
    Finally the poor implementation of policy is showing its shortfalls and the pendulum swings as people in other counties recognize what we have been dealing with for some time. The federal government made sure Canada was a place that cost too much to put a roof over your head. This is despite having one of the lowest people to land ratios on earth with an abundance of natural resources that should have made these home costs lower.

  • Greg 5 months ago

    High cost of living with absurd house prices. Canada is no longer a land of opportunity. Most would do better staying home.

  • Keith 5 months ago

    This mess has been brewing since the 80s and has now come back to bite us all in the ass. Canada has been an expensive place to live compared to other places for as long as I can remember, specifically the US. We have rationalized the extra cost as the price you pay for living in a simple, stable, safe and moderately prosperous country. Regardless of their political stripes, federal, provincial and municipal governments never looked at or planned beyond the next election cycle. In their defence, however, the unwashed masses who voted for them were/are only interested in satisfying their immediate needs/wants.

    The perfect example is how BC’s 1990’s government did everything it could to facilitate the real estate market getting completely out of control, and homeowners gleefully watched their homes increase three, four or five times in value. Some sane people warned us of the impending doom, but as long as the money kept rolling in and the right people were making $$$ and staying in power no one cared.

    Now we care, go figure.

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