Ottawa will need to raise its annual immigration level by one-third to 407,000 by 2030 to sustain its economic growth amid an aging population, says a new report on Canada’s demographic trends.

Currently, Canadians 65 and over account for 16 per cent of the total population, but the ratio is expected to rise to 24 per cent in the next two decades, according to the report by the Conference Board of Canada, released Thursday.

With a birth rate hovering around 1.55 children per woman and a longer life expectancy, researchers examined five scenarios of population targets between now and the year 2100, and their impact on labour force growth and government expenditures for health care and old age security benefits.

“The aging of Canada’s population will have a significant impact on Canada’s potential economic growth. Weaker labour force growth will have a negative impact on household spending, while a more slowly expanding economy will engender less investment spending,” warns the 54-page report.

“Weaker economic growth over the long term will limit the amount of revenue that governments in Canada collect over the forecast period at a time when the aging of Canada’s population will require significantly more expenditures. . . Higher immigration can increase the growth of Canada’s labour force over the long term and generate higher economic growth.”

The call for a higher immigration level came just as a new Angus Reid Institute poll this week found 68 per cent of Canadians said they prefer minorities to “do more to fit in” with mainstream Canada — and a drop in public support for multiculturalism.

While Immigration Minister John McCallum has hinted the Liberal government’s intent to increase the number of immigrants “substantially,” the Conservative party’s leadership race has sparked a debate over the needs to test would-be immigrants on “Canadian values.”

According to the conference board report, Canada’s natural rate of increase currently adds about 120,000 people to the population each year, but will drop progressively in the coming years as the number of deaths rises steadily and births decrease.

With the current annual immigration level at 260,000 (or less than 1 per cent of the 35 million population) and birth rate, Canada’s economic growth would slow from the current 2 per cent to around 1.6 per cent by 2050.

By reaching the 100 million population target in 2100, the report said Canada would need to increase its annual immigration levels to 407,000 a year by 2030.

From 2030 to 2050, it said, the immigration growth must be raised annually to 2.1 per cent of the population in order to improve Canada’s economic growth to 2.3 per cent by the middle of the century from the current projection of 2 per cent.

The impact of growing to 100 million people in 2100 can reduce old age security spending from 12 per cent to below 10 per cent of government revenues, as well as cutting the provincial health costs from 34.5 per cent to 29.2 per cent of provincial spending.

Loading... Loading... Loading... Loading... Loading... Loading...

At that population growth rate, the number of new houses built would rise to 432,000 rather than 268,000 under the status-quo projection of 53.7 million population in 2100. Spending growth will also spread to durable goods and in investment, said the study.

“Higher immigration and fertility rates soften the significant cost strains on the Canadian system in the long term,” the report noted. “However, over the next 25 years, Canada must also look to other solutions to address the impact of an aging population . . . Growth in the population is one level that can be part of the mix.”