A new Bank of Canada report published earlier this month warns that the country’s economy has become increasingly reliant on low-wage, mass migration of temporary workers from India and the Middle East.
The paper, published by the Bank’s Economic Analysis Department, found that the share of Canadian-born workers in the labour force has fallen from 77.6 per cent in 2006 to just 68.1 per cent in 2024, a nearly 10 percentage point drop.
The study highlights the extent to which mass migration from various streams, primarily non-permanent residents, has transformed the country’s demographics significantly and brought wages down.
The report shows a steep increase in temporary residents since 2022, including international students and foreign temporary workers, contributing to population growth that far outpaces any other developed country.
Two-thirds of that growth now comes from non-permanent migrants, a trend the Bank calls a “sharp divergence” from Canada’s historical norm.
The majority of these newcomers now originate from lower-income and war-torn regions such as sub-Saharan Africa, the Middle East and India.
Between 2006 and 2014, most temporary immigrants came from Europe.
That is no longer the case.
The Bank found that newcomers are also younger, lower-skilled, and increasingly paid significantly less than Canadian-born workers.
The wage gap between temporary migrants and native-born workers has more than doubled since 2015, with migrant workers now earning an average of 22.6 per cent less than Canadians.
Before 2014, that gap was just 9.5 per cent.
Critics of the Trudeau government’s open-door immigration policies say the findings validate concerns that mass migration is undermining both wages and cultural cohesion in Canada.
The report does not directly address rising unemployment rates (6.9 per cent in April) or the cultural impact of mass immigration.
The report does show a strong correlation between surging temporary migration and increased youth unemployment, particularly in the retail and food service sectors, which have traditionally employed young Canadians in entry-level jobs.
A November 2024 report by King’s Trust Canada found that the number of temporary foreign workers in Canadian restaurants increased by 634 per cent between 2016 and 2023.The Bank’s findings come as the new Carney-led Liberal government committed to capping the temporary workers and international student population in Canada to 5 per cent of the country’s population, the same target that Trudeau’s immigration minister Marc Miller had previously set.