Canada’s big demographic problem
Can immigration be too high? Not in terms of capacity to integrate newcomers into a society or public order, but in terms of its impact on the age structure of a population? Why is immigration not, in the long term, a panacea for low fertility rate? Why Canada can face a demographic collapse despite rapid, for a developed country, population growth?
I will start with my diagnosis of the demographic problem that Canada is facing. Well, Canada started in the past to receive too many immigrants too soon. Too soon in the sense that from a demographic point of view there was no such need, due to the high fertility rate and natural growth. Too many in the sense that relatively much more than other ‘immigration countries’, such as the USA or Germany. Together with a faster and deeper decline of the fertility rate, it has made the country rapidly ageing despite receiving the relatively the largest number of immigrants in its ‘reference group’ (e.g. G7 or the ‘core Anglosphere’ countries). Obviously, this process applies more or less to all immigrant countries with fertility rates below the replacement level, but due to the above-mentioned factors, it is probably Canada that is affected by it the most.
How that happened? Canada is one of the countries that had the largest net migration (the difference between immigration and emigration) in the years 1950–2020. According to UN data, it amounted to 10.6 million in this period. Only the USA (53.6 million), Germany (13 million) and Russia (10.9 million — nearly all after 1990) had more net migration. The proportions are already noticeable here. Canada had net migration 5 times smaller than the USA, although it is 9 times smaller in terms of population, and in 1950 it was even 11.5 times smaller. With regard to Germany, it is 2 times smaller and 5 in 1950. But Canada’s immigration history has not begin, like that of Germany, after World War II. This country is bracketed together with countries like Australia or the USA as built by immigrants.
At the peak of the 20th century (before World War I), the influx of immigrants to Canada accounted for almost 5% of the population yearly, compared to 2.5% in the US.
Chart from the text Here’s Everyone Who’s Immigrated to the US Since 1820 (by Max Galka), http://metrocosm.com/animated-immigration-map/ (07/01/2022).
Due to such big inflow the share of immigrants in the country’s population reached at the beginning of the 1920s its historic peak of over 22%, compared to approx. 13% in the USA.
Everything would be fine if the fertility rate (Total Fertility Rate, TFR) did not fall below the replacement level. In Canada it is the case since 1972. Moreover, the fall was deeper than in most of the other reference countries. Currently Canada has the lowest TFR among the countries of the core Anglosphere (Australia, Canada, New Zealand, UK, USA). In G7 only Japan and Italy have lower (both are, respectively, the 1st and 2nd oldest in the World). Low TFR, combined with relatively high immigration, has caused Canada to begin ageing quickly, what can be clearly seen in the chart below. While until 1965 its population was the youngest, in 2020 it was already third oldest. Canadians seemed to notice that and responded with… an increase of immigration, what can be seen in the chart as a slowdown in the growth of the median age since the period 2005–10. It might be possible that if they had increased immigration even more, the growth of the median age would have stopped. Of course, only for some time without TFR increase. Currently, the median age of Canada’s population is 41.7 (as of July 1, 2021) and, apart from European countries, it ranks fifth in the world in that regard (after Japan, South Korea, Taiwan and Cuba).
Ageing of Canada is clearly visible in the change of population by age groups. In 2001–21, the country’s population grew by 23% (7.2 million) — twice as much as in China (11%) and slightly less than in Morocco (25%), where the median age of the population is lower by 12 years. Net migration was responsible for approx. 2/3 of that growth while the natural increase added the remaining 1/3 (although its share is regularly decreasing and in 2019 it was less than 1/5). Looking at the level of age groups, however, we can see that the growth of the population, both in percentage and absolute terms, was mainly due to the growth of the 50+ population.
But the question that immediately arises is why the immigration should be blamed for that? We already know the first reason — the scale of immigration, which was relatively higher in Canada than in most other reference countries. Immigration initially rejuvenates population as immigrants are predominantly young. If, for example, 100,000 people were born in 1980, and, over the next 30 years, 30,000 immigrants born in the same year came, in 2020 there were already 130,000 people. Immigrants, however, eventually as everyone get old and sooner or later this group of 30,000 reach and then exceed median age, retirement age and make ageing of total population accelerated. This is of course simplified example. The idea is to understand how immigration affects age structure and process of ageing of population.
That is especially valid if their fertility rate is below the replacement level (2.1). The low fertility rate in Canada is the second, but the most important reason behind country’s ageing. In 2020 TFR in Canada was 1.4 and has been regularly falling since its peak in 2008 (1.69). The number of births, on the other hand, has fluctuated since 2007 in the range of 360–390,000 per year.
Anyone familiar with interdependencies in demography is well aware that the decline in the fertility rate with births remaining at the same level means that the number of women in childbearing age is rising. Indeed, the population of women aged 15–49 in Canada grew by 6.9% in 2001–2020, and in the age of 25–39 (the period of the highest fertility) even more — 13.7%. So why is Canada’s fertility rate so low and keep falling despite an influx of immigrants? Here, too, there are, most likely, two reasons.
The first one may be the specificity of Canada’s migration policy, which strongly facilitates the immigration of whole families. The table below shows its characteristics. Most recent immigrants in 2011 (those who came to the country over the course of the previous five years) were married (or in other legally recognized unions) and 21% were aged 0–14. I have not been able to find information on the fertility rate of immigrants in Canada, but it is probably low, most likely lower than that of non-immigrants, as most of their fertility may be fulfilled in their countries of origin.
The table from the article entitled Canada’s immigration trends and patterns (by Barry Edmonston), https://journals.library.ualberta.ca/csp/index.php/csp/article/view/25395/20365 (07/01/2022).
The chart below shows the age structure of immigrants who came to Canada between July 1, 2020 and July 1, 2021.
It is also worth to realize how family immigration with fertility rate nearly fulfilled in the country of origin affects the aging of population. In theory, it shouldn’t matter. Children are children. However, in order to slow down the aging of population as effectively as possible through immigration, it is necessary to ensure that its median age is as low as possible. So it is better, regardless of all other criteria like politics, economy and humanitarian issues, to receive, for example, 320,000 immigrants aged 18–25, who will later give birth to, let say, 80,000 children, than 320,000 immigrants aged 25–35 with 80,000 children whose average age on arrival is, for example, 9–10 years.
The second reason behind Canada’s low TFR may be real estate prices, which are rising much faster than in most reference countries (e.g. in the G7 group).
There is a strong correlation between the decline in the fertility rate and the rise in real estate prices. China is a very good and recent example here.
During the period of strong price growth that started somewhere in the second half of the 2015 (around that time the end of the ‘one-child’ policy was announced), China’s official fertility rate fell from 1.7 in 2016 to 1.15 in 2021. The number of births fell in the same period by more than 40%.
To some extent this is certainly caused by the tendency of immigrants (internal in China’s, external and internal in Canada) to settle in the largest metropolitan areas. Among the 6 largest in Canada, inhabited by almost half (46%) of the country’s population, only Montreal recorded the lower population growth than the country’s average in 2001–21.
In absolute terms, combined population of the agglomerations showed on the graph grew in that time by 4.3 million making them responsible for almost 60% of the country’s total population growth (7.2 million).
Summary
The intention of this text is not to criticize Canada’s immigration policy or the scale of immigration flowing into this country. It is the result of the past decisions that have made Canada a kind of “immigrant drug addict” who will need ever greater doses of immigrants only just to slow down the process of population ageing. The current one is 400,000 people per year, more than 1% of the population, in the average age of approx. 30 years. Soon, however, it may not be enough not only to ensure a slower pace of aging, but also, for example, to make the working age population growing. It will have to be increased to 500, then 600, 700, 800 thousands, and so on.
It is therefore not an option to limit immigration in the foreseeable future. However, Canada should change the paradigm of its demographic policy as soon as possible and focus more on activities that may have a positive impact on the very base of its demographic pyramid, that is, first and foremost, the growth of the fertility rate (of both immigrant and the Canadian-born population). After all, in demography you cannot fool destiny and ultimately all comes down to fertility. It should also work towards the geographical diversification of the places of immigrants’ settlement, so that more and more of them would move to areas other than largest agglomerations. That should also be accompanied by other actions, creating downward pressure on the real estate prices, such as limiting their role as an investment asset and development of public transport, in order to improve the time and comfort of access to city centers from as large areas as possible.
The current direction will only cause an increasing dependence on immigration, which will also be more and more affected by demographic processes such as aging and fertility decline, as these phenomena impact literally all countries in the world. In addition, the demand for immigrants will also grow in other developed countries, which will lead to increasing competition in that regard. Ultimately, maintaining the current direction of demographic policy may not only ruin the chances of meeting the ‘100 million Canadians’ target set by Canada’s former prime minister Brian Mulroney (through… immigration, of course), but lead to a rapid, uncontrolled aging and shrinking of its population. The forerunner of this may be a gradual increase of the number of deaths. In the years 2011–19 they grew by an average of 2% per year, twice as much as in the previous, analogous period (2002–10) and twice as much as the country’s total population.
