Why Canada Can't Solve Its Population Problem with Immigration

Summary

The video script explores Canada's large-scale skilled immigration policy, which aims to boost the economy but faces criticism as a potential 'population trap.' It discusses the economic benefits of skilled migration, such as filling workforce gaps and providing upfront stimulus, while highlighting issues like housing unaffordability and the risk of stagnant per capita output. The script also touches on the challenges of managing immigration, including the impact on local workers and the housing market, and the need for careful policy adjustments to avoid economic pitfalls.

Takeaways

• 🌏 Canada is the second largest country in the world but has a relatively small population compared to California or Tokyo's metropolitan area.
• 🤔 The country faces a potential 'population trap' where it struggles to balance the benefits and drawbacks of high immigration rates.
• 💼 Skilled migration is seen as an effective economic stimulus, but Canada's situation may be unique due to its size and demographic challenges.
• 🏢 The influx of skilled workers can fill workforce gaps and support an aging population, but it also puts pressure on housing and resources.
• 🏠 Canada has some of the world's most unaffordable housing, especially in city centers, and high immigration rates exacerbate this issue.
• 📈 While immigration can boost economic output, if resources are spread thin, per capita output may not increase, affecting overall productivity.
• 🇺🇸 Canada's proximity to the USA creates a challenge as skilled workers may leave for better opportunities south of the border.
• 👨‍👩‍👧‍👦 The increase in immigration can also bring in unproductive family members, potentially lowering the average GDP per capita.
• 🎓 There are concerns about 'diploma mills' where students may not be receiving quality education but are using visas to work in Canada.
• 🏘️ Loosening zoning regulations to increase housing supply could be a solution to accommodate population growth and reduce unaffordability.
• 🔍 Other countries are closely watching Canada's approach to skilled migration as they face similar challenges and seek to avoid a 'population trap'.

Q & A

What makes Canada's immigration strategy different from other advanced economies?

Canada's immigration strategy is unique due to its large land area with a relatively small population, which suggests there's room for more workers. However, it faces a potential 'population trap' where it cannot afford to stop or continue bringing in immigrants at the current rate without facing economic challenges.

Why is skilled migration considered an effective form of economic stimulus?

Skilled migration is seen as an effective economic stimulus because it can fill workforce gaps, especially in professions that are in high demand. It also brings in new taxpayers to support an aging population and can provide an immediate boost as immigrants spend money on setting up their lives in the new country.

What are the potential downsides of Canada's high immigration rate?

High immigration rates can lead to increased demand for housing, resulting in unaffordability, and may spread limited economic resources thin, potentially leading to stagnant or decreased per capita output. It can also exacerbate the 'brain drain' from developing countries.

Why is Canada's housing market particularly affected by immigration?

Canada's housing market is affected by immigration because the country has concentrated urban centers with limited space, and a high influx of people increases demand for housing, leading to higher prices and potential unaffordability.

How does the USA's economic strength impact Canada's skilled workers?

The USA's higher productivity, better business opportunities, and higher wages can attract skilled workers from Canada, leading to a potential skills shortage in certain fields in Canada, especially if the immigration rate slows down.

What is the concept of 'population trap' mentioned in the script?

The 'population trap' refers to a situation where a country, like Canada, is in a dilemma where it cannot afford to either continue or stop its current rate of immigration without facing significant economic challenges.

What are the economic implications of unmanaged immigration growth?

Unmanaged immigration growth can lead to an increased number of workers without a corresponding increase in economic resources, potentially leading to a decrease in per capita output and affecting the overall economic growth.

How do 'golden visas' contribute to an economy?

'Golden visas' grant permanent residency or citizenship to wealthy individuals who invest a certain amount in the local economy, which can boost economic output and tax revenue.

What is the issue with 'diploma mills' in the context of student visas?

Diploma mills are tertiary education facilities that barely meet the minimum requirements for students to be counted as such. They can lead to people entering the country on student visas without acquiring valuable skills, potentially lowering the average economic output.

How can Canada address the housing affordability issue related to immigration?

Canada could address the housing affordability issue by loosening zoning regulations to allow for faster construction of new homes, which would increase the supply and potentially lower housing costs.

What are the broader implications of Canada's immigration strategy on the global economy?

Canada's immigration strategy has the potential to impact the global economy by setting a precedent for how advanced economies manage skilled migration. It could also affect the economies of countries experiencing 'brain drain' as their skilled workers migrate to Canada.

Outlines

00:00

🌍 Economic Implications of Immigration in Canada

The first paragraph discusses Canada's large land area and sparse population, suggesting that the country has room for more workers through immigration, particularly skilled workers or those seeking tertiary education. It highlights the benefits of skilled migration for economic growth and tax revenue without increasing national debt. However, it also introduces the concept of a 'population trap,' where Canada may struggle to maintain the current immigration rate without facing economic challenges. The paragraph touches on the potential negative impacts of immigration on productivity and housing affordability, and the unique position Canada holds compared to other advanced economies.

05:00

🏘️ Housing and Economic Challenges of High Immigration

The second paragraph delves into the economic and housing market implications of Canada's high immigration rates. It points out that the influx of immigrants, especially into a few major cities, increases demand for housing and contributes to unaffordability. The paragraph also discusses the potential for increased population to lead to stagnant or declining per capita output if resources are spread too thin. It mentions the 'brain drain' issue, where highly skilled workers leave for better opportunities in the USA, and the challenges of managing immigration to ensure it benefits the economy without causing skills shortages or overburdening existing resources.

10:02

📚 The Impact of Student Visas and Immigration Policies

The third paragraph focuses on the role of student visas in Canada's immigration strategy and the potential pitfalls of this approach. It raises concerns about 'diploma mills'—educational institutions that may not provide quality education but facilitate entry into Canada. The paragraph also addresses the economic impact of immigrants working in low-productivity jobs, which could lower the overall economic output. It discusses the potential for a population trap, where stopping or continuing high immigration rates could lead to economic issues, such as a skills shortage or increased cost of living without corresponding economic growth. The paragraph concludes by suggesting that Canada's approach to immigration is being closely watched by other countries facing similar challenges.

Keywords

💡Immigration

Immigration refers to the act of moving to a new country with the intention of residing there permanently. In the context of the video, it is a primary driver of economic growth and a topic of concern due to the potential 'population trap' Canada may be facing. The script discusses how immigration, particularly of skilled workers, can stimulate the economy but also raises questions about the sustainability of current immigration rates.

💡Skilled Migration

Skilled migration is the process of individuals with specialized skills or qualifications moving to another country. The video highlights skilled migration as a form of economic stimulus, where migrants fill workforce gaps and contribute to economic output. However, it also points out the potential downsides, such as increased competition for local workers and the strain on resources like housing.

💡Population Trap

A population trap is a situation where a country is caught between the need to continue attracting immigrants for economic growth and the negative consequences of rapid population increase. The script uses this term to describe Canada's dilemma, where high immigration rates are both necessary and potentially harmful to the country's long-term economic health.

💡Economic Stimulus

Economic stimulus refers to government actions or policies intended to boost economic activity. The video explains how skilled migrants can act as an economic stimulus by bringing spending money and filling jobs that would otherwise be vacant, thereby increasing tax revenue and contributing to economic output.

💡Productivity

Productivity is a measure of the efficiency of production, often expressed as the ratio of economic output to inputs. The script cites Paul Krugman, emphasizing that productivity is crucial for long-term economic health. It also discusses how immigration can affect productivity, both positively by introducing skilled workers and negatively by diluting resources and opportunities.

💡Housing Affordability

Housing affordability refers to the cost of housing relative to income, indicating whether homes are financially accessible to the population. The video points out that the influx of immigrants has increased demand for housing in Canada, leading to higher prices and making it more difficult for residents to afford homes, especially in major cities.

💡Skill Shortage

A skill shortage occurs when there are not enough workers with the necessary skills to meet the demands of the job market. The script mentions that Canada faces a skill shortage in certain sectors, such as healthcare, and that immigration can help fill these gaps. However, it also raises concerns about the potential for an overreliance on immigration to address this issue.

💡Brain Drain

Brain drain is the emigration of highly trained or intelligent people from a particular country. While not the main focus of the video, the script briefly touches on the negative impact of brain drain on the countries that skilled migrants leave behind, suggesting a broader global context to the discussion of immigration.

💡Student Visa

A student visa is a permit allowing a person to study in a foreign country. The video discusses the use of student visas as a pathway to immigration, with international students contributing billions of dollars in tuition fees and filling low-end jobs. However, it also raises concerns about the quality of education provided by some institutions, referred to as 'diploma mills,' which may not offer genuine educational opportunities.

💡Zoning Regulations

Zoning regulations are laws that dictate how land can be used in different areas. The script suggests that tight zoning regulations in Canadian cities may be contributing to housing unaffordability by restricting the construction of new homes. It implies that loosening these regulations could be part of the solution to accommodate population growth.

💡Construction Industry

The construction industry encompasses the businesses involved in the building and maintenance of infrastructure. The video points out that the construction industry can benefit from skilled migration, as it helps fill skill shortages in the sector. It also suggests that increasing housing construction could provide an economic stimulus and alleviate housing affordability issues.

Highlights

Canada, the second largest country in the world, has a population of only 38 million, fewer than California and slightly more than Tokyo's metropolitan area.

With a vast land and small population, Canada has potential to increase its workforce through immigration, particularly in in-demand professions or tertiary education.

Skilled migration can be a potent economic stimulus without impacting national debt figures.

Some economists warn of a 'population trap' in Canada, where immigration rates are unsustainable but cessation could be equally detrimental.

Canada's economy is sensitive to immigration, with potential harm to the country and its people, and a dilemma in adjusting immigration policies.

Productivity is crucial for economic growth, and Opera browser's features like Tab Islands and AI assistant ARA can aid in research productivity.

Skilled migration can fill workforce gaps and provide young taxpayers to support an aging population.

Skilled workers often bring spending money and contribute to economic output and tax revenue.

Canada's immigration strategy post-pandemic has led to a significant influx of migrants, nearly half a million per year.

The rapid increase in immigration could lead to unintended economic side effects, such as housing demand outpacing supply.

Canada's productivity issues are exacerbated by the 'brain drain' of skilled workers moving to the USA for better opportunities.

Immigration can dilute business investment across a larger workforce, potentially reducing individual worker productivity.

Canada faces a dilemma of increased housing costs due to high immigration without a corresponding increase in per capita GDP.

Student visas in Canada may be exploited, with 'diploma mills' and full-time work opportunities potentially lowering economic output.

Canada's high levels of household debt, tied to expensive housing, could be worsened by a sudden halt in immigration.

Canada's situation is being closely watched by other countries facing similar issues with skilled migration.

The 'population trap' is not unique to Canada, and other countries are also grappling with the balance of immigration.

Canada has begun to reassess its visa allowances and regulations around student visas to address the challenges of immigration.

The impact of immigration on the countries that migrants are leaving can be as significant as the challenges faced by the receiving countries.

Transcripts

Canada is the second largest country in

the world and home to only 38 million

people that's fewer people than live in

just the state of California and only

slightly more than live in the

metropolitan area of Tokyo with so much

space and such a small population it's

understandable to expect that the

country would have some Headroom for

bringing in more workers through

immigration especially if those workers

are already skilled in an in- demand

profession or if they plan to get a

tertiary education in the country

skilled migration like this can be one

of the most effective forms of economic

stimulus available to policy makers and

it has the ad benefit of not hurting

headline figures like national debt but

as with most things even Nationwide

macroeconomic initiatives the devil is

in the detail some economists are now

arguing that Canada is in a population

trap where it can no longer afford to

keep bringing in new immigrants at the

same rate that it currently is but it

also can no longer afford to stop and

while the country is not the only

economy bringing in record numbers of

new skilled workers there are a few

small differences between Canada and

places like the USA Western Europe New

Zealand and even Australia they could

make this problem a lot worse here than

any anywhere else in the world at the

very least it could make it a lot more

immediate which means a lot of

economists and policy makers will be

watching what happens in Canada over the

next few years very closely because it

could be the first sign of a dominant

economic strategy backfiring for the

world's most advanced economies so why

has Canada's economy been so sensitive

to immigration what harm has this done

to the country and its people and

finally what is stopping Canada from

just pulling back on immigration if it's

such a

threat Paul Krugman famously said that

productivity isn't everything but in the

long run it's almost everything that's

why to assist with my productivity

instead of putting barriers in the way

of it I use Opera browser the sponsor of

this video to do all of my research

Opera's tab Islands turns chaos into

Clarity it's especially useful when

researching for different topics at the

same time each project gets its own tab

Island which holds all of the tabs in

that task so I don't spend ages hunting

for the tab that I need and another

massive timesaver is Opera's AI

assistant ARA it's like having a

personal research assistant who quickly

summarizes complex articles saving you

hours of reading for specific points and

on top of that it seamlessly integrates

social media and messaging within the

browser very useful if I need to quickly

check messages without leaving my work

window and getting sucked down the

rabbit hole of distractions and for

those concerned about online privacy

Opera's buil-in best-in-class ad blocker

and privacy tools prevent intrusive ads

from cluttering up your sites and

trackers from selling your data to

transform your browsing experience click

our link below to try oper for free its

streamline browsing experience is just

something I never want to switch back

from skilled migration if managed

correctly can be a big boost to any

economy especially advanced economies

that have low birth rates in an aging

population by bringing in skilled

workers an economy can fill any gaps it

has in its Workforce and make sure that

it has enough new Young taxpayers to

support the people that are retiring out

of the workforce skilled migration also

acts as a type of upfront economic

stimulus because normally when skilled

workers are moving to a new country

they're not going to becoming

empty-handed they're going to bring some

spending money with them from their home

country they're going to need to buy

Home Furnishings perhaps a car rent or

buy a place to live and everything else

that people need to spend money on to

make a life in a new country now if new

School migrants are coming from

developing economies it's likely that

their move was motivated in large part

by the higher earnings potential and

better quality of life they can get in

the advanced economy they are moving to

so that means that they might not have a

lot of money to bring into the economy

but it is still a boost a lot of

countries even have so-called golden

visas that Grant permanent residency or

in some cases even citizenship to

wealthy people that invest a certain

amount of money in the local economy

they moving to even incredibly wealthy

people also normally enjoy a high

quality of life in advanced economies

that tend to be safer more politically

stable less polluted offer better

opportunities for their children and

perhaps most importantly better

protections for their property and then

of course there are student fees that

are given to people to study in an

economy normally with conditions that

allow them to work while they are

studying International students bring in

billions of dollars every year to

advance economies just to pay F tuition

they also work a lot of low-end jobs

that other people in advanced economies

would prefer not to do skilled workers

fill jobs that wouldn't have otherwise

been filled without investing

significant resources into training and

in doing so they add to economic output

and tax revenue this is one of the most

powerful tools that advanced economies

have to maintain their economic growth

and yeah sure it generally comes at the

expense of taking the wealthiest most

promising and most talented workers out

of developing and undeveloped economies

but who's keeping track of that now like

all good things this can go too far

theoretically at least but for a long

time advanced economies have been doing

it without any real repercussions and

that's what makes the case of Canada so

interesting in the aftermath of the

global pandemic pushing for more

migration became a major strategy to

boost the economy in the way that we

just explored and give relatively direct

Aid to institutions like universities

that make a lot of money off

International students and employ a lot

of people now a little bit of this was

just making up for lost time from Global

travel restrictions that slowed down

people entering the country but that was

only really a drop of at most 100,000

people in 2020 Canada is now welcoming

in nearly half a million new migrants

every year and a majority of them are

economically motivated another group

were refugees who moved to the country

to seek Asylum because they would not be

safe living in their home country

obviously the motivation for this one

was humanitarian more than economic the

remainder are people immigrating for

family reasons primarily to move along

with a family member who got a work visa

now there is a significant economic

impact from this and we'll get to that

soon either way such a radical shift in

such a short amount of time on a major

economic Lev is going to have huge

impacts on the economy some of them are

the positive goals of the policies that

we explored earlier but some of them are

going to be unintended side effects

Canada does not have a huge population

to begin with so this represents a not

insignificant percentage of the entire

country moving in every year Canada

despite all of its space is also a very

densely populated country with

concentrated centers focused in just a

small handful of major cities the most

immediately obvious consequences of so

many people moving into a limited amount

of space is that they're going to

significantly increase demand for a

limited supply of housing already Canada

has some of the most unaffordable

housing in the world especially in the

aformentioned city centers where most

new migrants will be moving to go to

school or get the job that they moveed

to the country for in the first place

this puts upwards pressure on rental and

sale prices in a pretty clear case of

demand outpacing Supply now it's

possible that eventually more housing

can be constructed to accommodate all of

these extra people but this wasn't a

gradual change it was a very immediate

spike in the number of people that need

a home there's also a broader issue that

big immigration numbers that are not

managed carefully can cause as well

increasing the number of workers in an

economy will all other things been equal

increase the total output of that

economy because there are more people

making stuff but if other economic

resources are spread thin across that

large population of people people then

it's possible that per capita output

remains stagnant or potentially even

goes backwards Canada already has a

serious problem caused by its much

larger and much more productive neighbor

to the South the USA is on a per capita

basis far more productive than Canada is

it also has better business

opportunities higher wages at the top

end and lower taxes all available in

cities that are in many cases just

across the river from Canada as Canada

brings in highly skilled workers from

around the world a lot of the most

highly skilled workers in Canada are

leaving for better opportunities in the

the USA this means that if Canada slows

down its current rate of immigration it

may be left with a serious skills

shortage especially in the fields that

it's targeting like healthcare and it if

it keeps this rate of immigration as

high as it is though then the more

limited business investment into

Canadian companies is going to be spread

out over even more workers which will

make them less productive on an

individual level we've already made an

entire video on why Canadian businesses

are less productive and therefore offer

lower salaries on average than

businesses in the USA so as always we

don't want to repeat too much here but

briefly the USA is generally more

business friendly it uses the world's

Reserve currency and it's home to most

of the world's largest companies so it's

a very popular destination for investors

from all over the world to invest their

money with that money businesses from

the USA can invest into better

technology and Machinery to make their

workers more productive which means that

they can pay them better attract better

talent and build the world's largest

companies that attract even more

Investments Canada being so close both

geographically and culturally somewhat

lives in the economic shadow of that

success beyond the mergo round of

workers coming into Canada to replace

workers leaving there is the issue of

skilled workers bringing their

potentially unproductive family members

with them to their new home which means

even if they individually bring up

average GDP per capita their Collective

family unit may bring it down there is

also the issue that if immigration has

increased so radically it naturally

raises questions about how that boost in

numbers was supplied there are millions

of people around the world at any given

time that want the opportunity to move

to an advanced country like Canada

because of how much would improve their

quality of life obviously these

countries don't let them all in at the

same time because that would cause a lot

of these economic problems that means

that countries like Canada can normally

be pretty selective with who they let in

only giving skilled work of visas to

people with the best skills or at least

the ones that are in most demand within

the economy if Canada is effectively

doubling the amount of people it's

bringing into the country in a year that

means that at least half of them

wouldn't have made the cut under

previous levels now does that mean that

they'll be less productive on average

further adding to the problem of more

people not necessarily being a net

positive well time will tell what is

already a clear problem though is

especially in Canada is people getting

around this screening process by just

getting a student visa Canada welcomes a

lot of students which could be a great

opportunity since the country is

training its own skilled Workforce that

are literally paying for the privilege

but that's assuming they are actually

going to real schools to learn real

skills from real teachers Canada maybe

more than every other major student

destination has serious issues with

tertiary education facilities that are

little more than empty buildings that

let people into the country on a student

visa there are reports of these places

effectively running classes and only

operating to meet the bare minimum

requirements for students to technically

be counted as students they're so common

in the country they even have their own

name diploma Mills Canada has very

generous laws around what people can do

on student fees they can work full-time

if they say they're on a school break

they can buy housing skirting the ban on

foreign buyers and they can bring their

partner as well this causes problems at

both ends exceptionally wealthy foreign

students have purchased a lot of homes

in the country furthering the problem of

unaffordable housing particularly

egregious example examples had students

spending tens of millions of dollars on

a place to live while they were studying

on the other hand there are people who

get student fees as just for the

opportunity to work in Canada often

taking roles in the gig economy and

clearly bringing down average economic

output so if Canada continues to bring

in so many people without improving per

capita output it could be in a situation

where all it really achieves on a

macroeconomic level is raising the cost

of living without raising economic

output to compensate for it if it stops

this flow of new people entering the

country then it could run into a very

serious skill shortage very quickly and

have short-term problems with businesses

that were built on the expectation of

population growth and skilled workers on

tap that would have to radically

readjust how they operate radical

shakeups like this either way would be

particularly bad in Canada which is a

country with amongst the highest levels

of household debt in the world thanks

primarily to people borrowing to afford

some of the world's most expensive homes

if the flow of new people entering the

country was suddenly restricted in the

same way that it was suddenly doubled

then it could leave a lot of households

in the country underwater on their

mortgages where they owe more than their

house is worth which could cause

significantly larger and more immediate

problems to the economy this is a

population trap Canada can't keep

bringing in so many people without

causing problems and it can't stop

bringing in people without causing more

problems which sounds dire and it is a

real issue that needs to be carefully

addressed but it's probably over

sensationalized there are things that

Canada can do to avoid the trap a

balanced discussion on Purely the

cold-hearted economics of such a

sensitive issue is difficult it is

possible to oppose immigration measures

or even the scale of immigration without

being anti-immigrant and on the other

hand huge numbers of people entering a

country every year are an easy scapegoat

to blame for genuine economic and social

concerns like being able to afford a

place to live but that problem May hold

the solution if the demand for housing

increases so too should the supply yes

Canada's population is heavily

centralized in just a few cities but

though cities themselves have incredibly

tight zoning regulations makes building

new homes fast enough to keep up with

population growth incredibly tough

loosening those regulations would be a

great start and could also be a huge

stimulus to the economy itself building

houses employs a lot of skilled people

and it's an industry that can never be

offsh Canada does have a skill shortage

in the construction space but again

skilled migration is really good at

filling skill shortages of course a lot

of people say that they want affordable

housing but when it comes to rezoning

land around their home they might be

slightly less enthusiastic and when

people have taken on so much debt it's

understandable that they would want to

protect the value of their biggest

assets good governments at all levels

even down to local Council zonings are

ultimately beholden to the wishes of

their people and if their people don't

want to fix one of the biggest issues

caused by immigration from the supply

side then the demand side is all they

really have left Canada has already

pulled back drastically on new Visa

allowances and the perhaps overly loose

regulations around student fees are also

getting looked at quite seriously

whatever happens Canada will be watched

closely by a lot of other countries that

have also tried to get too much of a

good thing with skilled migration

because the population trap is far from

Canada specific now whatever ends up

happening in Canada its problems with

Skool migration are not going to be

nearly as bad as the problems caused in

the countries that those migrants are

coming from we didn't really touch on

that in this video because it was more

focused on the receiving country but we

have made an entire video on the tragic

reality of brain drain on developing

economies that you should be able to

click to on your screen now thanks for

watching mate bye