Why Newcomers are Important to

1SCOTIABANK ECONOMICS

Why Newcomers are Important to

Canada’s Economic Success

Marc Desormeaux, Senior Economist

@ScotiaEconomics

@marcdesormeaux

Scotiabank-CanadaVisa Webinar

July 14, 2021


Summary

• Canadian economy recovering strongly

• Recovery to be felt across provinces

• Industry: remote-capable services did best during pandemic,

“high-contact” sectors struggled

• Immigrants essential to recovery from COVID-19 and

Canada’s long-run prosperity


1. Canadian Economic Backdrop


Big Picture: Canada Set for Very Strong Recovery in 2021

Sources: Scotiabank Economics, Statistics Canada.

-6

-4

-2

0

2

4

6

06 09 12 15 18 21

Total Employment

Real GDP

Forecast


Two Reasons Canada is Set Up for Strong Growth

Sources: Scotiabank Economics, Our World in Data, OECD.

0 2 4

China

Euro area

Japan

United

Kingdom

Brazil

Mexico

World

Canada

United

States

real GDP impact of

American Rescue Plan, % over first four quarters

0 20 40 60 80

South Africa

Indonesia

Russia

India

Australia

Mexico

Japan

South Korea

Brazil

Argentina

China

Turkey

Saudi Arabia

France

United States

Germany

Italy

United Kingdom

Canada

One-Dose

Fully Vaccinated

G-20 Vaccination Rates

%


All Provincial Economies Expected to Bounce Back in 2021


-9 -6 -3 0 3 6

NL

PE

NS

NB

SK

MB

ON

AB

BC

QC

2021F 2020

real

GDP, % change

0 3 6 9 12 15

SK

QC

MB

BC

NS

ON

NB

PE

AB

NL

2021F 2020

unemployment

rate, %


Tracking Canada’s Labour Market Recovery

Sources: Scotiabank Economics, Statistics Canada, BLS, ISTAT, ABS, Bbk, MHLW.

75

80

85

90

95

100

105

01/20 04/20 07/20 10/20 01/21 04/21Total PopulationImmigrants, landed <6 years agoImmigrants, landed 6+ years agoBorn in Canada

total employment, 3-mo. moving avg., index, Feb. 2020 = 100

84

86

88

90

92

94

96

98

100

01/20 04/20 07/20 10/20 01/21 04/21

CanadaItalyAustraliaGermanyJapanUS

International Employment

index, Feb 2020 = 100


2. Industry Trends


K-Shaped Recovery

* Professional, Scientific, and Technical Services; Finance; Technology.

** Education, Health, Public Administration.

*** Accommodation and Food Services; Arts, Entertainment and Recreation; Information and Culture.


60

70

80

90

100

01/20 04/20 07/20 10/20 01/21 04/21

High-Wage Services*Mining, Oil & GasManufacturing + ConstructionPublic Sector**"High Contact"***

real Canadian GDP, index, Feb. 2020 = 100


Immigrant Presence in High-Contact and High-Wage Sectors


0

5

10

15

20

25

30

35

40immigrants' share of total employment, 2017


K-Shaped Recovery

** Information & Communications Technology

*** Accommodation & Food Services + Arts, Entertainment & Recreation + Information & Culture.


0 2 4 6 8 10

SK

AB

MB

NL

PE

NB

NS

BC

QC

ON

ICT**

Finance &

Insurance

Prof., Sci.,

Tech.

Services

Lockdown-Resilient SectorShare by Province

% of GDP, 2020

0 2 4 6 8

SK

NL

AB

MB

NB

QC

ON

NS

PE

BC

"High Contact" Industry***Exposure by Province

% of GDP, 2020

10-

Prov.Avg.


3. Immigration’s Economic Contribution


Newcomers Needed to Offset Low Birth Rate

Sources: Scotiabank Economics, IMF, Statistics Canada, IRCC.

1.2

1.7

2.2

00 03 06 09 12 15 18Canada EUUS FranceUK

fertility rate, %

0

100

200

300

400

70s 80s 90s 00s 17 18 20 20 21 22 23

immigration to Canada, 000s

Annual Average Immigration

ProposedImmigration


Immigration Drove Canadian Population Gains from Coast to Coast

* Includes international students, temporary foreign workers. Sources: Scotiabank Economics, IMF, Statistics Canada.

-0.5

0.0

0.5

1.0

1.5

10 12 14 16 18Canada‒Total PopulationCanada‒Immigration ContributionJapanUKUSFranceGermany

International Comparison

annual % change

-3 0 3 6 9

NL

NB

NS

QC

SK

AB

MB

ON

BC

PE

Net Immigration

Temp., Net Non-

Perm. ResidentsOther

contribution to % change

Provincial Comparison


Immigrants’ Labour Market Contributions


60

70

80

90

06 08 10 12 14 16 18 20

Born in CanadaLanded <6 Years Ago

Landed 6–10 Years AgoLanded >10 Years Ago

employment rate, 25–54 year-olds

Labour Market Integration Had Been Improving Before COVID-19

-10 0 10 20 30 40 50 60

Canada

ON

AB

NL

MB

SK

BC

QC

NS

NB

PE

Landed Immigrants

Born in Canada

% change, 2015–19

Immigrants Anchored Pre-Pandemic Full-Time Job Gains


Labour Shortages Emerging in Some Sectors


0

2

4

6 2019

Q4-2019

Q1-2021

job vacancy rate, %


4. Housing Market Considerations


Housing Affordability: Prices and Vary by City

Sources: Scotiabank Economics, CREA.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

00 02 04 06 08 10 12 14 16 18 20

Vancouver, BC

Calgary, AB

Toronto, ON

Halifax, NS

Montreal, QC

avg. sale price, CAD mn


Wages Also Vary by Region


700

900

1100

1300

10 12 14 16 18 20

AtlanticQuebecOntarioAlbertaBCCanada

avg. weekly wages, CAD


Sources: Scotiabank Economics, OECD.

0102030405060

Italy

Germany

U.K.

France

OECD

U.S.

N.Z.

Australia

Canada

Immigrant Homeownership Rate

% of foreign-born population

Source: Scotiabank Economics, OECD.0 10 20 30 40 50 60

Italy

Germany

France

OECD

U.S.

N.Z.

U.K.

Australia

Canada

Highly Educated Immigrant Population

% of foreign-born population

Source: Scotiabank Economics, OECD.

Strong Immigrant Achievement vs. Other Major Economies


Summary

• Canadian economy recovering strongly

• Recovery to be felt across provinces

• Industry: remote-capable services did best during pandemic,

“high-contact” sectors struggled

• Immigrants essential to recovery from COVID-19 and

Canada’s long-run prosperity


Our Twitter Handle: @ScotiaEconomics


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Scotiabank Economics:

www.scotiabank.com/economics

[email protected]

@ScotiaEconomics

Marc Desormeaux

Senior Economist

+1.416.866.4733

[email protected]

@marcdesormeaux

http://www.scotiabank.com/economics

mailto:[email protected]

mailto:[email protected]


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