While many Canadians would welcome lower inflation, negative effects on GDP, government coffers, and unemployment are part of the 'adverse consequences...
Immigration Minister Marc Miller announced cuts to the number of non-permanent residents in Canada over the next three years on March 21. The Canadian government’s recently announced plans to soft-cap temporary resident numbers should pave the way for interest rate cuts to happen sooner and more frequently, but could have “adverse consequences” for the overall economy, according to Desjardins., the proportion of non-permanent residents would be reduced from the current level of 6.
Canada’s rapid population growth has been a focus of recent political and economic conversation, particularly its impact on housing. Miller’s announcement last week came two months after heto be “stronger than previously projected” because of higher productivity growth. But, Bartlett wrote, the significantly lower projected population growth would have a larger effect on aggregate real GDP growth, causing it to drop.Desjardins’ outlook on employment is mixed.
For the federal government, the changes would likely lead to lower revenue, Desjardins noted. This could mean larger deficits and more federal government debt, Bartlett wrote. At a provincial level, there could be some wins in the form of lower healthcare costs, Bartlett said, but “aging will be an inescapable drag on provincial finances and reducing the number of NPRs will only exacerbate pressures on public finances, absent a material boost in productivity.
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