As Ottawa overhauls its temporary immigration programs, a new analysis by Bank of Nova Scotia warns that the unchecked population surge of the past two years is behind two-thirds of the “massive” decline in productivity over the same time period.
The drop stems from a combination of two factors: chronically-low business investment in Canada and the sudden explosion in population, which grew by 1.25 million last year alone.
Given weak investment levels, that’s far more than the 350,000 permanent and temporary immigrants Canada’s economy can absorb without having a negative impact on productivity, according to Scotiabank economists Rebekah Young and René Lalonde.