Population Growth In Canada Hits 3.2%, Among World’s Fastest

(Bloomberg) -- Canada’s population growth accelerated to 3.2% over the past year, one of the fastest rates in the world, largely due to a sharp rise in temporary foreign workers and international students. 

The country’s population rose by 1.25 million in the year to Oct. 1 — the largest number in any 12-month period since its creation in 1867, according to new data from Statistics Canada. 

Almost all of the increase was driven by a surge in international migration. Canada accepted 454,590 new permanent residents over the past year, while bringing in 804,690 non-permanent residents, a category that includes temporary workers, foreign students and, to a lesser extent, refugees.

The surge of newcomers brought Canada’s population to an estimated 40.5 million, slightly more than California. 

The last time Canada’s population grew at a faster rate was in the late 1950s, during the postwar baby boom and a period when the country was accepting Hungarian refugees fleeing Soviet repression. It is expanding much faster than any Group of Seven nation, China or India — in fact, most countries growing at a similar pace are in Africa, according to 2021 data. 

While boosting economic growth, the rapid influx of people is worsening housing affordability, keeping a floor under home prices even with borrowing costs at two-decade highs. 

Population pressure is also evident in rental prices, which rose at a 7.4% yearly pace in November. Shelter costs are the largest contributor to the inflation rate of 3.1%, according to a separate release from the agency on Tuesday.

The Canadian government sets annual targets for permanent residents — for 2023 it’s 465,000 people — but does not currently cap the number of visas granted to international students. Foreign students are charged much higher tuition than Canadians and have become a key source of revenue for colleges and universities.

Read More: Housing Woes Prompt Canada to Cap Immigration Targets

Facing a public backlash over the soaring cost of housing, Prime Minister Justin Trudeau’s government has taken limited steps toward slowing the rise in temporary residents. 

Immigration Minister Marc Miller announced a framework that will alter the visa process for foreign students. Still, he has resisted imposing an overall cap on visas — though he recently threatened that if provinces don’t crack down on “diploma mills” that are churning out dubious degrees to foreign students, the government will begin to limit them. 

Some economists have said Canada’s population growth is masking an underlying deterioration in living standards. On a per-capita basis, gross domestic product is declining. 

Earlier this month, Bank of Canada Deputy Governor Toni Gravelle said population growth and a chronic undersupply of housing are major reasons why rent price inflation isn’t slowing, as in the US.

“Today’s data raise even more questions about Canada’s longer-run economic prospects,” Marc Desormeaux, an economist with Desjardins Securities, said in a report to investors Tuesday. “The population numbers once again reinforce the need to boost the housing supply and bolster infrastructure spending.”

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