Immigration Drops Sharply in Another Virus Hit to Canada

(Bloomberg) -- Covid-19 has derailed the Canadian government’s plan to increase international migration levels this year.

In the first release of data that covers the pandemic’s spread into Canada, the number of permanent residents who came to the country in March dropped by 29% from the same period last year, falling to 19,115 during the month. Temporary foreign workers were down 35% to 5,635, while international student visas plunged 45% to 11,130, according to the immigration department.

Canada has been relying on high levels of immigration to boost its population growth and offset aging demographics. The immigration-driven population boom has been one of the bright spots in the Canadian economy, credited with propping up housing demand and the labor force. But the latest government data shows the pandemic is threatening to upend that.

“The disruption will reverberate across the economy, given our reliance on immigration for labor force growth,” Andrew Agopsowicz, an economist at Royal Bank of Canada, said in a report on the numbers. “Among the potential casualties: industries with labor shortages, urban rental and housing markets, and university budgets.”

Earlier this year, the Canadian government unveiled ambitious targets for immigration. On March 12, just before the country went into lockdown to curb the Covid-19 outbreak, Ottawa released plans to increase the number of permanent residents to as many as 370,000 for 2020, which would have been the highest on record. That now looks like a lofty goal.

Agopsowicz said he expects to see an overall drop of 170,000 permanent residents in 2020 if travel restrictions and border closures last all summer. Only permanent residents or temporary residents whose documentation was issued before March 18 are allowed to enter Canada.

Fewer Farmers

The sharp decline in temporary foreign workers aopears to be having the most immediate impact. Many essential services such as farms, long-term care facilities and other health care services rely on temporary migrant labor for staffing.

Among the industries which rely on temporary foreign workers, agriculture was particularly hard hit, with 45% fewer arrivals in March from a year earlier. Workers from countries like Mexico, Jamaica and Guatemala are preferring to stay home this year over health concerns related to the pandemic.

The data is also hitting the academic sector, which relies heavily in higher tuition fees paid by foreign students at Canadian universities and colleges. The number of student permits issued in March was the lowest since February 2017.

©2020 Bloomberg L.P.