Canada’s population has been growing dramatically over the last few years as a result of boosting immigration targets designed in part to address an aging population and labour shortages. A larger Canadian population in the long run has benefits and costs and there has been debate over how quickly and by how much Canadian population should be growing. For example, the non-profit group Century Initiative, wants to see Canada’s population reach 100 million by the year 2100 and sees benefits to a larger economy and market size as well as more clout when it comes to a global world. A book by Doug Saunders called Maximum Canada sees a larger Canada as a way to avoid global obscurity.
Of course, as all economic historians know, while more population can be a source of economic growth, there is a distinction between extensive and intensive growth. That is, if population rises faster than output then per capita income will actually decline. Then there are the adjustment costs of such a large population influx and Canada at the moment seems particularly hard pressed to increase its social and physical infrastructure – particularly housing and health – in the wake of large population increases. The result has been a rising cost of living when it comes to housing costs.
Economists Mikal Skuterud, Chris Worswick and Matthew Doyle make the point in that increasing Canada’s population while increasing its economic size can also reduce the average person’s standard of living if economic output does not increase faster than population. Rising population without accompanying business investment to raise productivity is a recipe for a lower standard of living and Canada has had a productivity problem for some time now.
Moreover, while a larger population may be correlated with increased global clout, in Canada’s case it would also help in today’s turbulent world if the increased size came with a larger share of GDP spent on defense and a couple of aircraft carrier task forces with at least one with Arctic capability. After all, the Philippines and Ethiopia both have just over 100 million people and they are not exactly throwing their weight around globally. As in the case of housing and infrastructure investment, Canada has also lagged in its security investment and more people alone will not create the international respect some people think it will.
Since 2013, Canada’s population has grown by nearly 5 million people – a 14 percent increase - and is basically now at the 40-million-person mark. Figure 1 presents the percent growth ranked by economic region – with some artistic license for the regional groupings – and shows that Alberta, British Columbia and Ontario have grown the fastest. The Territories and Saskatchewan-Manitoba have been next, and the Atlantic Provinces and Quebec have grown the least.
What this means is that over time, as Figures 2 and 3 illustrate for the period 1991 to 2023, the relative share of the Canadian population living in Alberta, BC and Ontario is growing while the rest is shrinking. In the case of Quebec, in 1951 it had 29 percent of Canada’s population and by 1991 it was 25 percent and 2023 sees it down to 22 percent which has no doubt raised the hackles of Quebec’s premier. If one accepts that a growing Canadian population will increase our economic mass and clout in the world, then one also needs to accept that Quebec, the Territories, the Atlantic Region and Saskatoba – will see diminished clout within Canada.
And within provinces, it is likely that some regions will do better than others. In the case of Ontario – the Greater Toronto-Hamilton Area is where most of the population will concentrate while it is likely given current trends that cities like Thunder Bay or Sudbury will not be that much bigger than at present by 2100. True, climate change and other shocks make such forecasts subject to considerable uncertainty, but it would take some pretty incredible economic, political, and social forces to put Thunder Bay over one million people by 2100.
Needless to say, while a much larger population may assist in growing Canada’s economy and may increase our global weight, the outcome is not assured given our productivity lag. This is really the crux of the issue. It is not that Canada would not benefit from being larger and cannot accommodate more people, but it needs to be accompanied by the investment spending needed to expand our infrastructure. Moreover, increasing our population will also require an effort to deal with the regional anxieties and tensions it will produce within Canada. There is a role for government here in either helping facilitate and coordinate the necessary investments or get out of the way to let those that can get things done do their thing. Still, we would not want a future without challenges and opportunities for our descendants. Happy Canada Day.