The pace of immigration picked up significantly in the first two months of 2021, suggesting Canada is on track to exceed RBC Economics’ February forecast for 275,000 new permanent residents this year. Canada admitted around 48,000 new permanent residents in January and February, signaling that policy changes put in place in late 2020 to boost pandemic-era immigration are gaining traction. The federal government’s announcement this week that it will invite 90,000 temporary foreign workers and international students already in Canada to apply for permanent residency only adds to our confidence that Canada will exceed our February forecast. However, the jury is still out over whether the recent measures will enable Canada to meet its ambitious target of 401,000 new permanent residents this year.

Immigration is rebounding to pre-pandemic levels. Canada admitted 25,000 new permanent residents in January and another 23,000 in February—nearly matching levels seen in the first two months of 2020. The pace reflects a healthy recovery from the March-December 2020 period, when monthly new permanent residents averaged 13,000.



Changes in federal policy are behind the rebound. There are signs the significant immigration-processing delays seen during 2020 have eased somewhat. However, a more likely explanation for the early-2021 rebound is the federal government’s decision to boost the number of applicants it’s accepting under its Express Entry program for skilled workers. The government began inviting more skilled workers in the Express Entry pool to apply late last year after it unveiled plans to accept up to 1.2 million immigrants in the 2021-2023 period.

Canada’s invitation to 90,000 temporary residents could be a game-changer—but it’s not clear how much. The government will make it easier for temporary foreign workers and international students already in the country to stay permanently. It’s prioritizing people with healthcare-related skills as well as those who can meet current high demand in essential-occupation categories like delivery drivers, construction workers and food harvesters. Some of these workers may have already planned to seek permanent residency under other immigration categories, so the net increase in new permanent workers resulting from this week’s announcement is hard to quantify. (Consider that about a third of the new permanent residents admitted in January and February held a temporary worker or student visa in the past.) That’s not to say the government’s move won’t have a positive impact on the current immigration shortfall.

The government will continue to lean on people already in Canada to beef up immigration numbers in the near future. Canadian policymakers have expanded permanent residency eligibility to try to capture more of the 1.2 million temporary workers and post-secondary students already here. With borders closed indefinitely and the pandemic raging in many countries, that’s not likely to change in the coming months.

The focus on those already in Canada is positive for immigration targets, but not for near-term growth. Since Ottawa is drawing from a pool of potential new permanent residents already living and working here, converting their status to permanent residency won’t provide much of a near-term lift for housing or consumer spending. Indeed, with the number of post-secondary international students in Canada down 65,000 from 2019, Canada is facing the risk of slow or possibly negative population growth in the short term. As we’ve stated previously, in the long run Canada does have the capacity to hit the ambitious targets set out last fall, with immigration once again turning into an important driver of long-term population and economic growth.


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Andrew Agopsowicz is a Senior Economist working in both the Economics and Thought Leadership groups. He studies the labour market – largely focusing on the future of work, demographic change, diversity, and human capital. Before joining RBC, Andrew was a Senior Economist at the Bank of Canada.

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