2023-05-20 08:02:48
First, before talking about demography and immigration, let’s take a look at the evolution of GDP in Quebec. From before the pandemic to today, or from 2019 to 2022, the GDP du Québec rose from $379 billion to $391 billion, an increase of 3.2%. During this time, the GDP in Ontario increased by 3.6% and that of British Columbia, by 6.6%.
Moreover, in an update of its forecasts, Desjardins indicated on Wednesday that GDP remained stable in January, employment has experienced alternating gains and losses over the past four months and the other indicators have been rather mixed”,”text”:”Quebec’s economy has been weak since the beginning of 2023. Real GDP remained stable in January, employment has seen alternating gains and losses over the past four months and other indicators have been rather mixed”}}”>Quebec’s economy has been weak since the start of 2023. The GDP real was stable in January, employment has seen alternating gains and losses over the past four months and the other indicators have been rather mixed.
At the same time, writes Desjardins, GDP real probably reached close to 3% on an annualized basis in the first quarter, thanks in particular to the strength of automobile sales and trade. However, the second quarter of the year will be more difficult for the Canadian economy”,”text”:”the Canadian economy continues to surprise. The year 2023 appears to be off to a good start, with real GDP growth likely hitting close to 3% on an annualized basis in the first quarter, thanks in particular to strong auto sales and trade. However, the second quarter of the year will be more difficult for the Canadian economy”}}”>the Canadian economy continues to surprise. The year 2023 seems well launched, the growth of the GDP probably reached close to 3% on an annualized basis in the first quarter, thanks in particular to the strength of automobile sales and trade. However, the second quarter of the year will be more difficult for the Canadian economy.
The growth of GDP stood at 3.4% in 2022 across Canada, compared to 2.8% for Quebec. Desjardins economists project an increase in the GDP 1.1% this year in the country and 0.7% next year, while in Quebec, growth will only be 0.4% in 2023 and 0.6% in 2024. If the word recession
does not appear on the radar screen, the economy is clearly slowing down.
Business investment will fall by 1.3% this year in the country, according to Desjardins, before rising by 1.1% in 2024. In Quebec, the drop will be 5 times greater, with a drop of 6.2% in 2023, and another 1% next year.
Fewer immigrants, less growth?
Without being the only reasons, the low demographic growth and the limited reception of immigrants may have a link with the quasi anemic economy of Quebec. In interview at Economy zone Wednesday, the chief economist of Desjardins Jimmy Jean affirmed that in Quebec we have less of the demographic contribution that greatly enhanced growth last year [ailleurs au pays]. It came to relieve labor shortages in Ontario, Alberta, British Columbia
.
It indicated that the addition of new citizens to the total population, it’s more people spending on goods and services. And here, in Quebec, we had less of that demographic contribution. So, there is that which also plays in the balance
.
It is in Quebec, moreover, that the rate of vacant positions is the highest in the country, a rate of 4.8%, whereas the average is 4.2% for Canada as a whole, and 3. 8% in Ontario.
However, when you talk to entrepreneurs and business leaders, they unhesitatingly call for an increase in immigration thresholds.
« We have 60 immigrants who joined our ranks in the first part of the year. It is a very hard-working workforce, very easy to integrate, which has greatly helped us fill this gap. […] To develop the economy, we have to use immigration because we have a labor shortage. »
Same story at the National Bank, about the contribution of immigration. Economy zonethe 11thmay. Economic growth will come from population growth and innovation. It takes both at the same time. For Quebec, more specifically, I think we have a demographic issue that is more pronounced than in the rest of Canada”,”text”:”It is clear that this is a growth factor, declared Laurent Ferreira, at Economy Zone, May 11. Economic growth will come from population growth and innovation. It takes both at the same time. For Quebec, more specifically, I think we have a demographic issue that is more pronounced than in the rest of Canada”}}”>It is clear that it is a factor of growth, declared Laurent Ferreira, to Economy zone, May 11. Economic growth will come from population growth and innovation. It takes both at the same time. For Quebec, more specifically, I think we have a demographic issue that is more pronounced than in the rest of Canada.
For two or three people who leave the labor market, explained the big boss of the financial institution, there is only one person to take the place. This demographic issue can be resolved through immigration. And if we don’t, I think it could be a competitiveness issue for Quebec in the longer term.
The other provinces rely on immigration
Canada received a total of 437,180 immigrants in 2022. Of this number, 68,687 went to Quebec, or 15.7% of the Canadian total, while Quebeckers represent 22.2% of the entire population of Canada. The reception rate in Quebec will be even lower in the future, since the province is aiming for a threshold of 50,000 to 55,000, while Canada will soon reach the bar of 500,000 immigrants per year.
Ontario welcomed 184,771 immigrants last year, or 42.3% of the Canadian total, while the province represents 38.9% of the country’s population. British Columbia received 61,213 immigrants in 2022, or 14% of the grand Canadian total, in line with its demographic weight in the country, which is 13.6%.
Quebec says it cannot do more, affirming that it must respect its capacity for integration, which corresponds, according to François Legault, to approximately 50,000 immigrants per year. Former Finance Minister Carlos Leitao says he totally disagrees with this analysis by the Prime Minister. I would like to know where this figure comes from. He comes out of a hat! In Quebec, we have adopted a system that is very good, which is that of holding a parliamentary committee every year to discuss these issues.
He adds :000, maybe it will be 60000, I don’t know. But let’s give the commission a chance to study the issue. […] We are in the midst of a labor shortage. Maybe this year, next year, for two, three or fouryears, it should be more than 50000. Let’s look at this in a constructive way, with an open mind.”,”text”:”you have to start the discussion without preconceived ideas. Maybe it’s 50000, maybe it’ll be 60000, I don’t know. But let’s give the commission a chance to study the issue. […] We are in the midst of a labor shortage. Maybe this year, next year, for two, three or four years, it should be more than 50,000. Let’s look at it constructively, with an open mind.”}}”>you have to start the discussion without preconceived ideas. Maybe it’s 50,000, maybe it’ll be 60,000, I don’t know. But let’s give the commission a chance to study the issue. […] We are in the midst of a labor shortage. Maybe this year, next year, for two, three or four years, it should be more than 50,000. Let’s look at it constructively, with an open mind.
More immigrants, but not more wealth
The issue of labor shortages is not about to evaporate. From 2016 to 2021, there were 1.4 million people in the 55 and over age group. And 21.8% of the population is between 55 and 64 years old. That’s a significant number of people who will soon be retiring.
Many of these workers are replaced by immigrants arriving in the country. These newcomers are driving up the level of wealth, since 62% of recent immigrants, according to 2021 data, earn earnings that equal or exceed the average income.
That said, there is not really any evidence that shows that it is necessary to have so many immigrants
according to Gilles Grenier, professor in the Department of Economics at the University of Ottawa.
« The argument that is often given, that of the labor shortage, does not entirely work. There are also needs to be met by immigrants in the labor market, in hospitals, in education. Finally, immigration is not the solution to the labor shortage. I think productivity efforts, encouraging people to work longer, are efforts that are better than immigration. »
No effect on GDP per capita
The professor explains that adding more newcomers to the economy increases the GDPbut has no effect on the GDP per inhabitant. It makes a bigger economy, says Gilles Grenier, but it does not increase the well-being of the population. Per capita income will not be higher because there are more people.
Gilles Grenier adds: there are several other countries in the world that are small, that function quite well with a relatively small population. So it’s not an argument from an economic point of view.
The question of French remains crucial in the case of Quebec. Premier Legault has repeatedly hinted that he wants 100% Francophone immigration. This is an ambitious goal, but certainly difficult to achieve. And Carlos Leitao told us, in an interview, that with such a policy, his parents would never have been able to come and live in Quebec… and he would never have become Minister of Finance!
One thing is certain, this issue remains sensitive. It is political, social, but also economic. While it is correct to say that adding immigrants to society will not automatically lead to an increase in GDP per capita, it is important to remember that economic growth depends in particular on the growth of its population. Quebec has chosen to grow more slowly than Ontario or the country as a whole in terms of population. It could also mean that Quebec is opting for slower economic growth.
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