In each EconMinute, Business Council of Alberta economist Alicia Planincic seeks to better understand the economic issues that matter to Canadians: from business competitiveness to housing affordability to living standards and our country’s lack of productivity growth. She strives to answer burning questions, tackle misconceptions, and uncover what’s really going on in the Canadian economy.
A couple of months ago, the federal government made a big announcement that they were decreasing targets for immigration pretty substantially. Though there was a lot of talk about the topline numbers and what it means for the economy, what was overlooked at that time was that cuts to immigration came primarily at the expense of a single program: the Provincial Nominee Program (the “PNP”)—what represents the provinces’ role in selecting economic immigrants.
What’s important about the PNP is that it’s designed to distribute immigrants more widely across Canada (especially beyond the country’s biggest cities) and give the provinces the ability to meet local labour market needs. And, though it’s not perfect, it’s pretty effective at both.
Just how big of a hit did the program take? Pretty big.
Graphic credit: Janice Nelson.
While total immigration was reduced by around 100,000 new permanent residents (annually), the PNP was reduced by 65,000. To put this into perspective, the PNP is just a single program within the broader “class” of economic immigration but cuts to the PNP dwarfed cuts made to the other two main classes of immigration combined (i.e., family-related immigration and refugees).
At the same time, federally-focused economic programs did not see any major cuts. In fact, their numbers grew slightly. The result of all this is that the province’s role in economic immigration, which had been steadily growing for years, is set to collapse from over 40 percent of total economic immigration down to just 24 percent.
It’s worth noting that the PNP is also losing ground to another federal priority: French-speaking immigration outside of Quebec. In fact, French language proficiency has become a key factor in selecting economic immigrants federally. Though the target for French-speaking immigration was cut marginally this year, numbers have nearly doubled over the last couple of years, with the latest target at 30,000 (compared to 55,000 for the PNP).
In other words, the current plan to decrease immigration is not just an across-the-board cut that will hit all parts of Canada equally. It comes with regional consequences, as provincial priorities lose out to federal ones.
A version of this post was originally published by the Business Council of Alberta at businesscouncilab.com.
Alicia Planincic is the Director of Policy & Economics at the Business Council of Alberta. She regularly provides insight and analysis on the Canadian economy, public finances, labour markets, equity and social mobility, and public policy.
