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At the beginning of the year, the Economic Club of Toronto organized a conference gathering six renowned economists in front of a group of business leaders in the city's prestigious business district. The goal: to discuss the economic outlook for the coming year. The message they delivered to the federal government surprised the audience, accustomed to such events: Canada's record demographic growth, primarily due to immigration, is deemed unsustainable and could be unjustifiable. These economists questioned the feasibility of maintaining this pace in 2024.

Traditionally, the financial sector is perceived as being in favor of immigration for several reasons. On one hand, it generates a large pool of workers, potentially influencing wages downward. On the other hand, each new arrival represents a potential consumer, especially for the major Canadian banks, as demonstrated by their advertising strategies targeting this clientele.

A study conducted by the economic team of the National Bank, under the direction of Stéphane Marion, proposes an intriguing thesis. According to this study, Canada might be caught in a "demographic trap," limiting its ability to improve its standard of living. In 2023, the Canadian population experienced an unprecedented increase of 1,250,000 people, following an increase of 825,000 in 2022. For context, such growth had only been observed during the annexation of Newfoundland. This rate of increase is five times higher than the average of the Organisation for Economic Co-operation and Development (OECD). Contrary to what is observed in the United States, in Canada, the GDP per capita is stagnating, partly due to inflationary pressure on housing. The authors of the study point out that Canada lacks the necessary infrastructure and capital to manage this demographic growth.

Public Opinion and Immigration
The graph above, which illustrates the opinion of Canadians about immigration, reveals that about a quarter of them believed the country was welcoming too many immigrants with a quota of 250,000 permanent residents. This proportion doubled when the quota of permanent residents approached 500,000.

The vast majority of Canadians continue to view immigration in a positive light, recognizing its benefits in terms of cultural diversity, demographic growth, and workforce strengthening. However, there is a growing concern about its impact on the housing crisis and the pressure on healthcare and education systems. If the federal government maintains its immigration targets in general and the number of permanent residents for the coming years, which are close to half a million, it is possible that the perception of Canadians towards immigration will become more negative. If we reach this tipping point, it will be very difficult to revert. Canadians are open and generous, but they appreciate order and measure. The federal government would benefit from demonstrating that it has a measured and orderly approach to immigration.

The world's population reached a historic milestone with 8 billion individuals on November 15, 2022, according to the United Nations (UN). This remarkable milestone underscores a dramatic acceleration of demographic growth, especially since the mid-20th century. To put these figures in perspective, consider that Homo sapiens are about 300,000 years old, and the transition from hunter-gatherers to farmers and herders, a process known as the Neolithic Revolution, began approximately 10,000 to 12,000 years ago. This revolution, marked by the adoption of agriculture, led to a significant increase in birth rates due to better food availability, allowing human communities to settle down and support larger populations. Thus, humanity took almost 12,000 years to reach the first billion in 1804, but only 123 years for the second in 1927, and 33 years for the third in 1960. Finally, it took only 11 years to go from the seventh to the eighth billion in 2022.

Today, we are witnessing a dizzying acceleration of demographic growth, raising crucial questions about resources, sustainability, and social and environmental impacts. Analyzing historical trends, one might expect a population explosion in the coming decades. However, this growth depends on two factors: mortality and fertility.
Between 1960 and 2021, global life expectancy increased significantly, from 50.7 years to 68.9 years for men, and from 54.6 to 73.9 years for women. This increase contributes to the aging and growth of the population.

The Total Fertility Rate (TFR) is the number of children a woman of childbearing age would have. Here are the rates since 1960:

A fertility rate of 2.1 allows for the natural replacement of the population. It is observed that the global rate is declining and approaching the threshold beyond which the population will decline. The global fertility rate, declining everywhere, varies considerably from one region to another. In Africa, it remains above 4 in some countries, while all G20 members (except Indonesia) show rates below the replacement threshold of 2.1.

Projections: Between Growth and Decline According to the United Nations, the world population could reach 8.5 billion in 2030, 9.7 billion in 2050, and 10.4 billion in 2100. However, experts like HSBC economist James Pomeroy suggest that the peak could be reached in 2043, followed by a decline to 5 billion by 2100. The decline in China's population for the second consecutive year (2 million less in 2023, double the decline of 2022) supports this latter hypothesis. Moreover, the downward trend in the TFR has been universal, significant, and sustained for the last 50 years. The underlying reasons, such as urbanization (rural exodus), greater access to education and the job market for women, access to and education on reproductive health, and changes in social norms, are structural changes that are sustainable. Moreover, reversing a declining birth trend in a society poorly structured to welcome children represents a significant challenge. In other words, a low TFR contributes to a low TFR.

Historically, the debate on demography has focused on overpopulation. However, it is essential to consider the implications of demographic decline on the economy, infrastructure, national debts, real estate market, and businesses.

For more on the subject
We recommend "Empty Planet" by Darryl Bricker and John Ibbitson for a more in-depth exploration of these vital issues as well as the account on X "@birthgauge" which lists global statistics on the subject.