Onmanorama Explains | What's causing the drastic drop in permanent residence intake in Canada?

Representational Image. Photo: iStock/ mirsad sarajlic

Canada has emerged as Indian students' preferred destination, with hundreds of them leaving the country to pursue higher education there.

The North American country attracts a large number of international students due to its better living standards, acceptance of a varied population, top-notch healthcare facilities, and safety. Having a simpler migration process compared to the US, UK and Australia, Canada also invites skilled workers under various programmes for Permanent Residence (PR) every year.

However, there has been a substantial drop in the number of invitations to apply (ITAs—electronic applications for permanent residence that are valid for Canada's Express Entry programme for PR) issued by the country since April, 2023. While it issued 5,500 ITAs in January and 7,000 in March, Canada brought that number down to 4,300 in the latest draw on August 15.

Canada's present economic, unemployment, and housing crises are the main reasons for the reduction in PR invites, experts say.

A recent report by Canada's national statistical office indicated a decline in employment rate by 77,000 for people aged between 15 and 25 years in May.

"After holding steady at 5% for five consecutive months from December 2022 to April 2023, the unemployment rate rose 0.2 percentage points to 5.2% in May. This was the first monthly increase since August 2022," it reported. It also stated that some 8,100 part-time jobs were shed, offsetting a marginal gain in full-time employment'.

“The labor shortage caused by its aging population was the main reason why Canada eased its immigration policies. But now people have taken advantage of this and are in a mad rush to settle down in this country," said S Irudaya Rajan, Chair of the International Institute of Migration and Development, Thiruvananthapuram.

Since so many people are moving there for higher education and eventual permanent residence, the surplus population is left without a job, he said.

According to Statistics Canada, the country's population grew by 1,050,110 in 2022.

Samson Joseph, who is a resident of Calgary, Alberta, said the welcoming nature of the country and its government lures in a huge number of immigrants. "Canada is the best of both worlds. It's not just from India; a lot of people from other countries too migrate under various programmes — refugees, spouse visas, etc. Now, there are very few jobs to accommodate everyone. I have seen almost 150–200 people standing in long queue for hours for a job interview in a cafe here." Samson, who is from Mangalore, migrated to the country as PR in 2019.

"The competition for menial jobs has gone up with the increasing number of international students and migrants. A demand and supply gap is now prevailing in the country," said Vishal, another resident of Canada.

With a significant rise in grocery and housing costs, it is no longer the most affordable places for new Indian immigrants and students.

"While inflation has fallen in Canada for eight straight months, it remains high. The rapid rise in interest rates has also led to turmoil in some parts of the global banking system and volatility in global financial markets, highlighting the considerable uncertainty about how economic conditions will evolve going forward," stated a Statistics Canada report in March.

Recently, Prime Minister Justin Trudeau and Opposition Leader Pierre Poilievre were engaged in a verbal spat over the housing crisis in the country. While the former claimed that the Opposition was “trying to scare people for votes”, the latter reminded the PM about his promise to 'lower housing costs' eight years ago.

According to the Canadian Real Estate Association (CREA), there has been a 0.7% decline in the sale of houses between June and July. "We’re probably looking at another round of ʻback to the sidelines’ for some buyers until there’s a higher level of certainty around interest rates going forward," said Shaun Cathcart, CREA’s Senior Economist, in a report published in August.

"Everybody is struggling in one way or another due to high rents and lease rates, along with a lack of housing properties. Most of the students are moving into substandard properties with more than three roommates. Now, these students will also have to depend on their families for their expenses or use their deposits to survive," said Samson.

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