The recent report from Desjardins discovers the topic of “What’s the Right Number of Newcomers to Welcome to Canada?”. This report shows that Canada continues to rely on immigration to drive population and labor force growth. Most newcomers are now non-permanent residents, like international students and temporary foreign workers. This influx helps meet acute labor shortages, with unemployment still low.
Immigration is vital for Canada’s long-term economic success. Desjardins’ modeling shows substantially higher potential GDP growth under scenarios with more increased immigration compared to low immigration, mainly due to the productivity of economic immigrants.
Economic immigrants also raise potential GDP growth by being highly productive and engaged in the labor force. It also affirms Canada’s Start-Up Visa program’s substantial benefits, which align with the advantages of skilled immigration overall. A 2022 Conference Board of Canada study found that over 680 Start-Up Visa companies created 6,200 jobs and generated $518 million in GDP. The average firm had nine employees and a revenue of $735,000. 60% held intellectual property, and 93% engaged in global trade.
Around 95,000 businesses open in Canada each year. According to start-up statistics in Canada, small and medium-sized businesses employ over half of the population. In fact, 12.9 million people work for these businesses, around 85% of the Canadian workforce.
Start-Up Visa holders tend to be young and highly educated, offsetting Canada’s aging workforce. Their human capital and talent fuel economic growth. They also have a greater propensity for entrepreneurship than native-born citizens. Desjardins Economic Studies notes immigrants have a higher entrepreneurship rate than native-born citizens – 17% versus 12% in 2019. Immigrants also start more employer businesses (7% versus 5%).
Immigrant entrepreneurs admitted through the Start-Up Visa exhibit this high productivity. A 2021 government review found that 84% of owners had a bachelor’s degree or higher, and 43% had a master’s or PhD. Their skills in technology, engineering, and science are in high demand. These founders provide valuable global connections and diversity. The government study showed that 54% originally hailed from India and 14% from China – two key innovation and business hubs.
Their analysis shows that potential GDP growth could be one percentage point higher under a scenario where immigration keeps the old-age dependency ratio stable versus low immigration. Higher immigration significantly increases GDP per capita as well. Start-Up Visa ventures attract significant investment to scale their growth. Companies had raised over $177 million in 2021, including $71 million in 2020 amidst the pandemic.
This research confirms that the Start-Up Visa enables Canada to capture the economic benefits of skilled immigrant entrepreneurs. Their human capital, innovation, job creation, and global ties are significant assets for Canada’s productivity and competitiveness. Sustaining and expanding the program will be vital for a thriving business ecosystem.