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Quebec’s Immigration Policies Result in Economic Growth Below National Average for Canada

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Quebec’s Economic Growth Trails National Average, Predicts Desjardins Report

Quebec’s economic growth is expected to lag behind the national average for the second consecutive year in 2023, according to economists at Mouvement Desjardins. This prediction is derived from the province’s entry into a moderate recession in the latter half of this year, as the provincial economy faces a decline in momentum following a series of eight consecutive Bank of Canada interest rate hikes from March 2022 to January 2023.

“Economic progress is sluggish,” stated Hélène Bégin, a senior economist at Desjardins in Lévis. She highlighted that economic indicators in Quebec are relatively feeble, with many indicators showing weaker performance compared to other regions.

For instance, Quebec’s provincial GDP rose by a mere 0.9 percent in the first four months of 2023, a stark contrast to the national average of 2.3 percent. The residential construction sector in Quebec has been on a gradual decline, with only a minor recovery in the resale market. This is combined with a decrease in provincial business investments and international exports, whereas these indicators remain stable at the national level.

Bégin noted that the 0.4 percent GDP decline in April foreshadows negative growth for the entire second quarter, partly due to forest fires causing unprecedented disruptions to the paper and wood industries, among others.

This trend of lower GDP growth compared to the national average is reminiscent of the previous year when Quebec’s real GDP growth of 2.8 percent trailed the Canada-wide level of 3.4 percent. Moreover, this pattern is anticipated to extend into early next year.

Desjardins economists attribute the negative impact on Quebec’s economy to its slower population growth relative to the rest of Canada. Quebec’s population only grew by 2.1 percent in the year ending April 2023, falling short of the national average of 3.1 percent. In contrast, Ontario witnessed a population expansion of 3.4 percent during the same period.

Bégin further explained that interprovincial migrations contribute minimally to the workforce, and Quebec’s population also skews older compared to the rest of Canada. Additionally, weak rates of international immigration and immigrant integration in Quebec exacerbate the labor market’s excessive demand, which isn’t adequately met by current immigration levels. Consequently, this contributes to a lack of demographic support for the economy.

According to a recent study by the Canadian Federation of Independent Business (CFIB), several regions in Quebec should anticipate significant labor shortages in the years ahead unless the government takes steps to enhance provincial immigration targets, particularly outside of Montreal.

In March 2023, there was a projected annual deficit of 18,000 immigrants in Quebec, with Montreal and Laval being the sole exceptions.

However, on June 7th, the Quebec government’s Coalition Avenir outlined a series of proposed changes in its Official Gazette, intending to enforce stricter French language requirements across most permanent and temporary immigration programs.

Once these changes are implemented, it may become more challenging for Quebec employers to attract top international talent. This could also make Quebec a less appealing option for foreign nationals seeking temporary or permanent settlement.

The CFIB suggests that luring immigrants away from the traditional immigration hubs could be accomplished by streamlining paperwork, making housing more affordable, enhancing family-oriented services like childcare, and providing financial incentives for newcomers. Implementing a faster Canadian citizenship process for foreign workers wanting to settle in Quebec is also proposed.

However, these suggestions are unlikely to address the more immediate challenge posed by the proposed new immigration rules expected to take effect later this year.

Discover the tailored support and expert guidance of New Beginnings Immigration, dedicated to helping you navigate the intricacies of Quebec’s evolving immigration landscape. Contact us today to embark on your journey towards a successful new beginning abroad.

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