Did Mass Immigration Make Canadians Poorer?

Canada’s economy became larger over the past several years. More people entered the workforce, spent money, rented homes, and created demand for goods and services. Total gross domestic product increased, and businesses gained new workers and customers.

Yet many Canadians did not feel wealthier.

Housing became less affordable. Rents rose. Productivity remained weak. Public services struggled to keep pace with population growth, and young Canadians increasingly found that working hard did not guarantee access to a stable job or a reasonable home.

This contradiction is at the heart of Canada’s immigration debate. Immigration can increase the total size of the economy without improving the economic position of the average person.

In my conversation with Tony Keller, author of Borderline Chaos, he offered a careful assessment. Immigration did not create all of Canada’s economic problems, but historically high immigration—particularly immigration concentrated in lower-wage temporary streams—made several existing weaknesses more serious.

The question is not whether immigration increased Canada’s total economic output. It almost certainly did. The more important question is whether it increased output per person and improved the standard of living of the people already here.

Governments often celebrate total GDP growth because it provides a simple measure of economic expansion. If the country produces and consumes more, the economy is said to be growing.

Rapid population growth makes that outcome relatively easy to achieve. Every newcomer is both a worker and a consumer. They earn income, rent or purchase housing, buy groceries, use transportation, and support demand for other jobs.

This is one reason immigration does not automatically produce mass unemployment. New residents increase the labour supply, but they also increase demand.

However, total GDP does not tell us whether each person is becoming better off. For that, economists look at GDP per capita, which divides the size of the economy by the population.

Keller explained the distinction through a simple metaphor: the important question is not only whether the economic pie is getting larger, but whether it is growing faster than the number of forks reaching into it.

If Canada’s economy grows by three percent while its population grows by four percent, the country produces more overall but less per person. Businesses may report higher revenues and governments may collect more tax in total, while the average household still experiences stagnating or declining living standards.

Canada focused heavily on expanding the number of people participating in the economy. It did not generate enough productivity growth to ensure that the gains were shared on a per-person basis.

It would be inaccurate to blame immigration for every economic problem Canada faces.

Canada’s productivity challenges began long before the recent surge in population. Canadian firms have underinvested in equipment, technology, intellectual property, and worker productivity for years. Internal trade barriers make it harder to conduct business across provincial boundaries, while major infrastructure projects often face long delays.

The housing crisis also predates the recent rise in immigration. Restrictive zoning, slow municipal approvals, high construction costs, limited infrastructure, and political opposition to new development prevented many communities from building enough homes.

Canada also entered this period with shortages of physicians, strained hospitals, inadequate transit, and public institutions that were already struggling to serve the existing population.

Immigration did not create these conditions. It did, however, place additional pressure on systems that were already weak.

Keller compared the situation to a patient with a pre-existing condition who then develops another illness. Immigration was not the entire diagnosis, but the pace and composition of recent immigration made the condition more difficult to manage.

The distinction matters because it prevents immigration from becoming a convenient explanation for every policy failure. Canada’s problems with productivity, housing, and public administration are ultimately domestic problems that governments must address whether immigration remains high or falls significantly.

At the same time, it is unreasonable to pretend that adding a historically large number of people had no economic impact on those systems.

Immigration is often discussed as though every form of immigration produces the same economic result. It does not.

A physician, engineer, entrepreneur, scientist, or highly specialized technician may earn a strong income, pay substantial taxes, create employment, and make other workers more productive. Their contribution may extend far beyond the value of their individual labour.

A worker earning close to minimum wage also contributes to the economy and deserves dignity and fair treatment. However, the fiscal and productivity effects are different.

A high-income worker generally pays more in taxes than they receive in public services. A lower-income worker pays less income tax while still requiring access to healthcare, roads, transit, education for their children, housing infrastructure, and other public systems.

This does not make the lower-income worker a burden as a person. It means governments must evaluate immigration policy based on more than the total number of people admitted.

Canada’s traditional points system was built around this distinction. It prioritized education, language ability, work experience, and other measures of human capital because the country wanted immigration to raise productivity and living standards.

Keller argues that Canada weakened this focus as it expanded temporary migration and responded to employer demands for lower-wage labour. The country did not simply bring in more people. It changed the economic composition of immigration.

That change is central to the debate about whether immigration made Canadians poorer.

Businesses frequently argued that Canada faced a labour shortage.

In some sectors, the claim was clearly justified. Canada needs more physicians, nurses, engineers, skilled tradespeople, and other specialized workers.

The term was also used by restaurants, warehouses, delivery companies, and retailers that could not attract enough workers at existing wages and working conditions.

That raises a difficult question. Was Canada facing a shortage of workers, or a shortage of workers willing to accept the compensation being offered?

When an employer cannot recruit, the labour market normally provides several possible responses. The business can raise wages, improve scheduling, offer benefits, invest in automation, train existing workers, shorten operating hours, or redesign the position.

Expanding access to temporary workers gives employers another option. They can increase the supply of labour without substantially improving the job.

This approach may benefit businesses and consumers. Restaurants can remain open later, delivery services remain inexpensive, and employers avoid the higher costs that would come with a tighter labour market.

Keller used the example of being able to order food late at night and have it delivered slightly faster and more cheaply because a large pool of lower-wage workers is available. His point was not that convenience has no value. It was that convenience is not free.

The cost may be borne by workers whose wages do not rise, young Canadians who struggle to find entry-level employment, and newcomers who become trapped in precarious jobs because their future status may depend on remaining employed.

Canada’s immigration expansion created clear economic winners.

Businesses gained access to workers and a larger customer base. Colleges and universities collected international tuition. Landlords benefited from stronger demand for rental housing. Governments could point to a larger total economy, and consumers gained access to relatively inexpensive labour-intensive services.

The costs were distributed differently.

Young Canadians and workers without advanced credentials faced greater competition in entry-level occupations. Renters encountered higher housing costs. Families at the bottom of the income scale were forced to compete for limited housing and public services in communities that had not expanded capacity quickly enough.

Temporary residents also carried substantial risk. Many paid high tuition, accepted difficult work, and believed the experience would lead to permanent residency. When policies changed or pathways narrowed, they discovered that Canada had admitted far more prospective immigrants than it was prepared to accept permanently.

The system therefore did not simply create tension between immigrants and people born in Canada. It often placed established Canadians and recent newcomers in direct competition while allowing institutions and employers to receive much of the financial benefit.

A higher-income professional may experience immigration through cheaper services, increased convenience, and rising property values. A lower-income worker may experience it through greater job competition and higher rent.

Both experiences can be true at the same time.

Immigration did not cause Canada’s housing crisis. The country had already failed to build enough homes in the places where people wanted to live.

Toronto, Vancouver, and other growing cities entered the recent population surge with low vacancy rates, restrictive development rules, and inadequate rental construction. Municipal approval processes were slow, land was expensive, and infrastructure constraints limited development.

Canada then added an extraordinary number of residents in a short period.

Many temporary residents were young, had modest incomes, and entered the rental market rather than purchasing homes. They also tended to settle in cities that were already experiencing the most serious shortages.

The result was predictable. More people competed for a limited number of apartments, rooms, and basement suites. Rents increased, vacancy rates tightened, and overcrowded or inadequate living arrangements became more common.

It is wrong to blame newcomers for those conditions. They did not establish immigration targets, control zoning decisions, or determine the pace of housing construction.

It is equally wrong to claim that a rapid increase in housing demand had no effect on prices.

Immigration did not create the fire, but it added fuel to a housing market that was already burning.

A study permit can be issued more quickly than an apartment can be built. A work permit can be approved faster than a physician can be trained. Population can increase much faster than governments can expand hospitals, schools, roads, transit systems, and water infrastructure.

That time lag is economically important.

Immigration can strengthen public finances when newcomers are productive, earn strong incomes, and pay substantial taxes. However, when population growth is concentrated among lower-wage workers, governments may receive less tax revenue per person while still facing the full cost of expanding public services.

Again, this is not a statement about anyone’s moral worth. Every resident requires healthcare, transportation, housing, public safety, and functioning institutions.

The question is whether governments planned for those needs before expanding the population.

In many cases, they did not. Immigration levels increased much faster than housing construction, medical training, transit expansion, or municipal infrastructure.

Canadians experienced this as longer wait times, crowded classrooms, congested roads, and public systems that felt increasingly difficult to access.

A growing population can support a stronger country, but only when investment grows alongside it.

There is no simple national answer.

Immigrants do not only compete with existing workers. They also purchase goods, create demand, start businesses, employ people, and contribute skills that can raise productivity.

Highly skilled immigration can increase wages when newcomers help businesses expand or allow Canadian workers to move into more specialized roles.

The effect is different when a large number of workers enter the same lower-wage sectors.

An expanded labour supply can reduce the pressure on employers to raise compensation. Wages may not fall in absolute terms, but they may increase more slowly than they would have in a tighter labour market.

At the same time, housing and other living costs can rise quickly. A worker may earn slightly more than before but still become poorer in practical terms because rent, groceries, and transportation have increased at a faster rate.

This helps explain why official statistics can show economic growth while households feel that their position is deteriorating.

The country is producing more, but the gains are not necessarily reaching the people under the greatest pressure.

Keller therefore supports eliminating the Temporary Foreign Worker Program for most low-wage jobs that are actually permanent positions. His argument is that a restaurant, warehouse, or delivery company should not fill an ongoing Canadian job indefinitely through a program described as temporary.

If employers struggle to recruit, the labour market should place pressure on them to raise wages, improve conditions, invest in productivity, or alter their business model.

That adjustment may be inconvenient and may increase some prices, but it would also strengthen the bargaining position of workers.

The most honest answer is that it made some Canadians worse off while failing to produce a clear improvement in average living standards.

Immigration increased the total size of the economy. It supported businesses, created demand, and brought people to Canada who contribute to their communities.

It did not cause every housing, productivity, or public-service problem the country faces.

However, Canada’s specific approach—rapid population growth, insufficient housing, weak productivity, and an immigration mix increasingly concentrated in temporary and lower-wage streams—made it less likely that the benefits of growth would reach the average person.

Renters paid more. Low-wage workers faced greater competition. Young Canadians entered a labour and housing market increasingly disconnected from their incomes. Many newcomers found themselves in precarious jobs with uncertain paths to permanent residency.

At the same time, some of the largest benefits flowed to employers, property owners, and institutions that gained financially from population growth.

Canada did not become poorer simply because more people arrived. It became poorer per person when economic output, housing, infrastructure, and public services failed to grow as quickly or productively as the population.

That is the distinction political leaders too often avoided.

Canada needs immigration. An aging population, specialized labour shortages, and the country’s long tradition of welcoming newcomers all support a strong permanent immigration system.

But more immigration is not automatically better immigration.

The economic result depends on who arrives, what skills they bring, whether their status is permanent or temporary, how quickly the population grows, and whether governments build the housing and infrastructure required to support them.

The goal should not be to maximize the size of Canada’s population.

It should be to improve the lives of the people who live here, including the newcomers Canada invites to join them.

This article is based on my conversation with Tony Keller, Globe and Mail columnist and author of Borderline Chaos. The full discussion examines GDP per capita, housing, temporary foreign workers, international students, and whether Canada’s immigration choices reduced living standards.