The economic impact of immigration is an important topic in Canada. Two conflicting narratives exist: 1) higher immigration levels help to increase economy (GDP) and 2) higher immigration levels decreases GDP per capita or living standards for the resident population and leads to diseconomies of scale in terms of overcrowding of hospitals, schools and recreational facilities, deteriorating environment, increase in cost of services, increase in cost of housing, etc. A commonly supported argument is that impact on GDP is not an effective metric for immigration. Another narrative for immigration is replacement of the ageing workforce. However, economists note that increasing immigration rates is not an effective strategy to counter this entirely. Policy Options found that mass immigration has a null effect on GDP. Increased immigration numbers and the associated soaring housing prices has significantly contributed to the rise of inflation in 2021 to the highest in 18 years.
Canada is one of the top Western countries that accepts most immigrants per capita and was ranking 9th in 2015 in terms of immigrants as a percent of the population among western countries while Liechtenstein ranked first. The per capita immigration rate to Canada has been relatively constant since the 1950s, and in the first and second decades of 21st century there was a steady increase in the education and skill level of immigrants to Canada due to the focus on higher average productivity based applicants and thus immigrants to Canada on average were better educated than Canadians. This trend was enhanced for income redistribution in the third decade of the 21st century by opening low-skilled immigrant pathways that only required minimal scores for immigration to achieve target of 400,000 immigrants per year and have cemented a new narrative on immigration; immigration is to fill low-skilled jobs and alleviate competitive labour market pressures faced by businesses that use cheap labour. From 2022 onward, Trudeau government has set aggressive immigration targets per Century Initiative's lobbying, in 2023 it was 465,000, 485,000 in 2024, and it is 500,000 in 2025. Across Canada, people have been asking the government to match affordable housing to the set immigration levels, while the government annually welcomes 500,000 new permanent residents, and more than 800,000 foreign nationals into the country on study visas, as asylum seekers, and on temporary work visas. An award-winning Canadian journalist revealed the poor preparedness for receiving immigrants in swathes, aligning with Canada's historic need for a "servant class" and "cheap labour" for the bourgeoisie and owning class. Furthermore, the journalist observed that the policy of inaction in neutralizing social and professional barriers for immigrants signals that Canada is not as welcoming as it purports to be, and that the government intends to force a majority of immigrants into vulnerable positions and economic disenfranchisement.
An article by an ex-policy maker states that Canada is rooting for the low-wage-low-productivity model of competitiveness that it has been locked in from the mid-1980s with this aggressive immigration targets. A problematic approach per Paul Krugman in long term, he considers throwing more cheap labour at problems without a significant increase in productivity will affect a country's ability to improve its standard of living over time. The article further observes that it is imperative that Canada and the "government for the people" require a fundamental re-commitment to pre-1970s dominating national objective and efforts for a steady improvement in raising the living standard of Canadians by embracing the supply and demand concept of labour economics, and improving the economic efficiency of the system. A former director from Quebec's Ministry of Immigration observed that the government needs to treat people better.