Yesterday, Canada’s Parliamentary Budget Officer (PBO) released an impact assessment of the 2025-2027 Immigration Level Plan, which slashes permanent residency admissions by 21% and imposes caps on international students and foreign workers. A dire Global News headline summarized the findings: “Ottawa’s immigration cuts will chop 1.7% off GDP in 3 years: PBO”. That’s not the full picture.
While the PBO does project that the Liberal government’s immigration U-turn will lower Canada’s GDP by 1.7%, it goes on to project that “real GDP per capita” will be “1.4 per cent higher by 2027”. The GDP will decline, but GDP per capita will go up – exactly what immigration restrictionists have been arguing.
The reason behind this is simple. GDP is a measure of the market value of the goods and services produced and rendered in a particular time frame. This is why immigration raises the GDP – if you add more people to your country, more goods and services are produced and consumed. GDP was never intended to measure anything other than the total economic activity of a country – not the living standard of citizens, and certainly not their wellbeing.
Nobel laureate American economist Simon Kuznets pioneered the concept of GDP in the 1930s to help determine the effect of the Great Depression on the economy. He warned policymakers about the limits of this economic indicator, explaining that “the welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP”. His warnings went unheeded, and GDP came to be seen as the gold standard measurement by which all policies should be compared. Today, politicians and business leaders regularly cite GDP growth as a self-evident justification for policies like mass immigration.
The effects of the Liberal government’s immigration cut illustrates the flaw in this argument. While the cut will cause the abstract measure of GDP to decline, GDP per capita – or GDP per person – will increase. For quarter after quarter, GDP per capita has been falling, with the federal government paying little heed to those who have argued that massive population growth, especially growth driven by low-skill cheap labour, plays a major role in this trend.
According to Statistics Canada, GDP per capita is “widely used to gauge differences in living standards across countries”, with higher levels “generally found in more developed economies” – workers in those high GDP per capita countries “tend to be more productive and earn higher wages”. Of course, GDP per capita is not a perfect indicator of the standard of living, but at least it actually is an indicator – whereas GDP is an abstract measurement of economic activity.
Ultimately, we should seek to go beyond GDP per capita, and supplement this measure with an increased focus on metrics of real well-being such as happiness, road congestion, natural environment, green space, physical and mental health, social connection, strength of families, and sense of community – mass immigration is extremely damaging by all of these metrics as well.
To sum up, the PBO has confirmed what immigration restrictionists have been arguing for years. Mass immigration is good for particular sectors like banks and real estate developers that depend on astronomic population growth for their current business model, but it’s bad for the real economy, in particular the living standard of Canadians as measured by such metrics as GDP per capita.
I will leave off with one more quote from Simon Kuznets, particularly relevant to current debates in Canada: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what”.
All content on this website is copyrighted, and cannot be republished or reproduced without permission.
Share this article!
The truth does not fear investigation.
You can help support Dominion Review!
Dominion Review is entirely funded by readers. I am proud to publish hard-hitting columns and in-depth journalism with no paywall, no government grants, and no deference to political correctness and prevailing orthodoxies. If you appreciate this publication and want to help it grow and provide novel and dissenting perspectives to more Canadians, consider subscribing on Patreon for $5/month.
- Riley Donovan, editor