Recently, reports are coming out of China that since the Communist Party took power, China’s population has started to level off. Soon, India will surpass China in terms of population and population growth. Much of the Chinese population decline was of course due to deliberate policies by governments, including the previous one-child policy, aimed at lowering its overall population growth. However, such policies, while effective, have led to major concerns over future labour shortages due to low birth rates and an aging population. It is reported that by 2035, 400 million people in China are expected to be over 60, accounting for nearly a third of its population. Whether or not the government can provide widespread access to elder care, medical services and a stable stream of income later in life will also affect a long-held assumption that the Communist Party can provide a better life for its people. In the case of China, few believe that its restrictive immigration policies will help out in the short-term.
What do these predictions have to do with the North American scene? The fact of the matter is that both Canada and the U.S. are also facing issues surrounding aging populations, lower fertility rates and their subsequent impact on the labour market and social safety nets. Simply put, in order to maintain a population via the annual birth rate, one needs to have at least two children born to each couple. This is referred to as the replacement rate. In 2020, Canada’s total fertility rate hit a record low. In addition, in Canada more than nine million baby boomers are set to retire over the next decade, creating a potential labour shortage that, if unchecked, could raise health-care costs, upend pension payments and halt the country’s economic growth. The current population of Canada is estimated at less than 40 million. As the population ages, the median age had climbed steadily from 26.2 in 1971 to 41.1 in 2021, a trend observed in many advanced economies including the U.S.
This is why both Canada and the U.S. will continue to rely on immigrants to augment future labour forces. Restricting immigration for political reasons, such as occurred under President Trump’s administration, will backfire when it comes to the rate of population growth. Until recently, natural change — births minus deaths — had always been the primary driver of growth in Canada and the U.S. However, even before the pandemic hit, these aging nations were already experiencing a decline in fertility and increase in deaths. This is partly why Canada welcomed over 405,000 newcomers in 2021 – the most ever welcomed in a single year. The Federal Government is continuing its ambitious immigration policy by setting targets in the new levels plan of 465,000 permanent residents in 2023, 485,000 in 2024 and 500,000 in 2025.
However, there is one exception in Canada when it comes to increasing immigration. According to recent data, the province of Quebec is taking a dwindling share of immigrants to Canada. Under an agreement between the federal government and Quebec, Quebec controls the number of economic immigrants it takes each year. In 2022, Quebec brought in roughly 15.7 percent of permanent immigrants to Canada, despite the province representing nearly 23 percent of Canada’s population. Quebec’s current immigration policy is primarily based on its desire to have immigrants who are capable of living and working in French, Quebec’s official language. The province’s Immigration Minister, Christine Fréchette, has stated that Quebec has to limit immigration to French speakers to protect the French language. The minister further made it clear that the province won’t be boosting levels anytime soon. However, strong opposition to this policy has surfaced within certain key sectors within Quebec, notably within business sectors which already are dealing with labour shortages. For example, the Quebec Manufacturers and Exporters association said the province desperately needs these newcomers because there are labour shortages everywhere. The association estimates that some $7 billion (Canadian) in manufacturing output that could have taken place last year was sidelined due to current labour shortages.
As in the case of China, the Quebec provincial government has implemented several schemes to encourage Quebecers to have more children, however with little notable success. In both cases, government handouts like cash for babies and tax cuts, have failed to change the underlying fact that many young people simply do not want children. Fertility rates continue to fall as incomes rise and education levels increase, and more women are participating in the labour force. Other factors have contributed to the reluctance to have more children; including the burden that many younger adults face in taking care of aging parents and grandparents, the high costs of raising and educating children, and the increase in the number of working couples in order to make ends meet. For these reasons, countries have fewer options other than increasing immigration to offset their aging populations and maintain their standards of living.
FROLITICKS 