Immigration’s Effect on The Canadian Economy


Canada’s current and future prosperity depends on recruiting immigrants as the newcomers fill gaps in the Canadian workforce, build or start businesses and invest in the Canadian economy.

Therefore, when the Canadian immigration rate increases or decreases, many factors are affected.

Pandemic’s effect on Canadian Immigration

During the first six months of the COVID-19 pandemic, processing of immigration applications decreased. According to a report by the Conference Board of Canada, permanent residence admissions dropped by 56 percent from March to December of 2020. Refugee and family class admissions were hit hard with 72 and 63 per cent reductions. The Conference Board suggests that, based on the most recent trends in Express Entry draws, the share of immigrants with Canadian work experience will increase during 2021.

Since the start of 2021, Immigration, Refugees and Citizenship Canada (IRCC) started to prioritise transitioning those already in Canada to permanent residence and focusing on CEC and PNP candidates as they are less likely to be affected by the various disruptions related to COVID-19. In 2020, the immigration rate disproportionally felt outside Ontario, British Columbia, and Quebec. There may be some explanation for this, including policies that favour CEC admission since these candidates are typically concentrated in Ontario and British Columbia.

Canada’s decisions to fight the pandemic’s effect on immigration

The Canadian government decided to take steps towards making immigration easier in an attempt to restore the normal flow of immigration processes.

The government facilitated on-arrival testing, fully-vaccinated travellers are no longer required to quarantine while awaiting their test results.

Canada allowed travellers the option of using a COVID-19 rapid antigen test result (taken the day prior to their scheduled flight or arrival at the land border or marine port of entry) or a molecular test result (taken no more than 72 hours before their scheduled flight or arrival at the land border or marine port of entry) to meet pre-entry requirements.

On April 1st, 2022, the government announced that fully vaccinated travellers will no longer need to provide a pre-entry COVID-19 test result to enter Canada by air, land or water.

The pandemic’s effect on the Canadian economy

As a result of COVID-19, the Canadian economy went into a recession as economic activity in the country was limited by the government’s social distancing rules. In May 2020, the unemployment rate in Canada was the highest it had been since 1976, as companies began mass layoffs of workers. Several large-scale events planned for Canada in 2020 were cancelled or postponed, these events included all major sporting and cultural events. The travel restrictions hit Canada’s tourism and air travel sectors particularly hard.

Immigration had been stopped which affected the economy whereas immigrants contribute to the Canadian economy, not only by filling gaps in the labour force and paying taxes but also by spending money on goods, housing and transportation.

Decisions are taken by the government to solve immigration issues

During the height of the COVID-19 pandemic, a majority of IRCC staff were on leave. IRCC was also unable to finalize many permanent residence applications due to the travel restrictions in place. These effects of the pandemic resulted in a massive application backlog. As of October 2021, IRCC had a backlog of about 1.8 million applications. By September 2021, Canada began holding smaller PNP-only Express Entry draws. These smaller draws will allow IRCC to tackle the significant backlog leftover from COVID-19. Despite the challenges posed by the pandemic, it also paved the way for a more efficient immigration system. As the backlog clears, we should expect to see an all-program draw in 2022.


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