⁠From 40 to 100 Million: How will immigration impact Canadian wages?

Canada is simultaneously trying to be a pro growth and an anti-growth country. It needs to pick a lane.

Jun 11, 2025

In this episode of the Missing Middle podcast, conservative pundit Sabrina Maddeaux and economist Mike Moffatt discuss the current state of immigration in Canada.

Together, they examine a Bank of Canada report that focuses on the implications of temporary foreign workers on wages. Mike and Sabrina talk about the challenges new permanent residents face and the ambitious goals set by the Century Initiative for population growth. They explore how these factors intertwine with the housing crisis and the overall economic landscape, emphasizing the need for coherent immigration policies that align with infrastructure and social cohesion.

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Below is an AI-generated transcript of the Missing Middle podcast, which has been lightly edited.

Sabrina Maddeaux: All right, Mike, so here's the thing. We all know Canada's birth rate has tanked below replacement levels. Our population basically grows because people move here, not because we're having more babies. And for the longest time, Canada had this whole nice welcoming country vibe going for us, and maybe we still do. But honestly, that reputation is taking a bit of a beating lately. And why is that?

Well, we had this massive post-pandemic spike in non-permanent residents, and we didn't build enough homes or beef up our services like healthcare to match. (We've talked about this before on the show.) But then the Bank of Canada dropped this report in May. And it was really interesting. It had the absolutely thrilling title, and I quote, “The shift in Canadian immigration composition and its effects on wages.” I know it sounds like a real page-turner here, but it actually is very important because wages, housing, and immigration - they're all connected. And it's the stuff that's really impacting Canadians and especially younger Canadians right now. There's one line in that report that especially made me go, what it says, again, a direct quote, “Our results suggest that aggregate nominal wages would have been on average 0.7% higher in 2023 to 24 had the characteristics of temporary foreign workers remain unchanged over the past decade.” Now, that's a bit of a mouthful. But can you break that all down for us?

Mike Moffatt : Yeah, absolutely. When they talk about temporary foreign workers or temporary workers, they're talking about what we call non-permanent residents. So that's the people coming in through the temporary foreign worker program, international students, and so on. And the paper breaks down how much of each since 2015 - not only have we seen an increase in the number of temporary workers, but they're just fundamentally different than the cohort that came before 2015.

So in the report, I'll just directly quote the report, it says, between 2015 and 2024, temporary workers have become younger, less experienced and more likely to migrate from lower-income countries, as well, the shares of temporary workers in skilled occupations have declined moderately.

So what that means is basically it’s a different mix of newcomers or temporary foreign workers and international students, and so on. So prior to 2015, it was a lot more skilled workers. So you think of, maybe somebody coming over for six months to work in a nuclear power plant, or work at a tech firm. Now, it's a lot of, like, international students, temporary foreign workers coming in to do fast food jobs. And we talked about that in a previous episode, and we'll link to that.

So that has a really big impact in the economy that overall average wages are lower, because you're bringing in a lot of lower-income workers. But it has real composition effects that the people that Canada is inviting over, they're not competing with people like me for work, right? And people like me benefit because a lot of the newcomers who are coming over are working at Timmy's or delivering my pizza on Uber Eats or Skip the Dishes or what have you.

So folks like me, Gen X and Boomers, and so on, are really benefiting from this. But in the kind of entry-level jobs, this is a big problem, where there's just not enough work to go around for people of this skill set. So it's keeping wages, particularly at the lower end of the job market, lower than it otherwise would be. And it's creating competition. And interestingly, it's not just temporary foreign workers competing with Canadians, but it's actually temporary foreign workers competing with new immigrants, new permanent residents.

So , you come over, you're [been] accepted into Canada as a new permanent resident, somebody who's going to be here permanently for the next 60, 70, 80 years coming to raise a family. And then finding it is hard to get that first job, because there are so many people competing to work in a coffee shop, to work at the Dairy Queen next to Fanshawe College, and so on.

So it really is changing the composition of the labour market, and creating a lot of competition at the lower end of the labour market… which then benefits people like me. But it is not necessarily healthy for the country.

Sabrina Maddeaux: And so the report also dropped this stat that between 2006 and 2014, non-permanent residents were earning about 9.5% less than Canadian-born workers on average. And also, where non-permanent residents came from was basically the biggest factor in that wage gap, which seems significant to me. So what's going on there?

Mike Moffatt: This was prior to 2015. So this is before all the kinds of big increases in international students and temporary foreign workers and so on. And those workers, on average, earned about 10% less than people who were born in Canada. So this paper was saying, okay, well, what causes that? And interestingly enough, it wasn't education levels. If you control for formal education, in fact, non-permanent residents often had more years of formal education than Canadian-born people. They tended to be roughly the same age as the Canadian population, roughly the same amount of job experience, though that job experience was often not in Canada.

So when you try to sort of explain this 9.5% difference and explain this in a statistical sense, the one variable that really seems to stand out is the country of origin. That in particular, Southern Asia and India have lower wages or their non-permanent residents have lower wages than folks from, say, South America or Europe or so on. And it's not actually clear from the report why this is the case, but it just kind of indicates that there's always been this kind of difference where you come from as a temporary foreign worker does impact the wages you receive here in Canada.

Sabrina Maddeaux: But the report only seems to get more worrying from there. Another line that made my jaw drop. We also show that this negative wage gap more than doubled between 2006 and 14 in 2023 to 24 to 22.6%. That seems pretty bad, right?

Mike Moffatt: Yeah, that is absolutely bad. And here's where things change. And here's where that composition effect comes in. Since 2015, those workers have been younger. They have less formal education. And in the words of the report, they are more likely to migrate from lower-income countries. So that's impacting the average.

The composition of these programs matters. It used to be that our temporary foreign worker programs and international student programs, and all non-permanent resident programs had a diversity of countries they were drawing from, a diversity of skill levels and so on. But over the last decade, these programs had transformed, where they were disproportionately bringing in lower-income workers and disproportionately bringing in workers from a handful of countries, particularly India, but not just India.

So it really had large effects on the labour market. Where it used to be that all of us at some level might have had a co-worker who was a temporary foreign worker, but now these programs have morphed where they're hyper concentrated in a few industries and workers from a few countries to the benefit of some and the expense of others.

Sabrina Maddeaux: So far , we've only discussed non-permanent residents. What does the report have to say about new permanent residents, or what most people would traditionally consider to be new immigrants to Canada?

Mike Moffatt: Yeah and this, on the surface, looks like a good news story. So there, the wage gap actually got lower.

So there's always been a wage gap between people who were born in Canada and people who immigrated here. They could have immigrated here yesterday or they could have immigrated here five or ten years ago. There's always been a bit of a wage gap for a variety of reasons. That wage gap is closing, which on the surface would be good news, like hey, this group is doing better than before. But a lot of that closing of the wage gap has to do with the fact that immigrants, both new and those who have been here for a bit, are increasingly going into higher-skilled jobs, a higher proportion of them. Again, that sounds like a good thing, but it actually might be misleading because it's possible that lower-skilled new immigrants are having more trouble finding entry-level jobs due to that increased competition. So it's like, although the average is going up, the average only considers people who are employed.

So if you've got increased unemployment rates or decreased employment from lower-skilled individuals, the average is going up, but it's leaving a bunch of people behind. So this is one of those cases where you look at the headline number, it looks like good news, but when you dig into the surface, cracks start to appear.

Sabrina Maddeaux: Yeah, that's a really interesting point. And here's another thing that's really bugging me. Now we spent a lot of time on the show talking about immigration as it relates to the housing crisis, but housing prices have been completely outpacing wages for years now. And now here's this report basically saying, "Hey, if we hadn't brought in so many low-wage workers from abroad, incomes would be higher.”

And I feel like this is just one of those inconvenient truths that people either deliberately ignore or just don't want to see.

Like, isn't it true that Canadian companies have been lobbying hard to bring in temporary foreign workers specifically to keep wages down? And how is that supposed to be good politics or policy for anyone except those companies?

Mike Moffatt: Well, you're right. And these companies argue this is what we need for a skill shortage, or we need it for labour shortages. But the fastest way to close up a labour shortage is higher wages. These programs are designed to suppress wages, or at least most of them.

There are occasional cases to repair a nuclear power plant, and there are only, like, five specialists in the world who know how to do it. Yeah, okay, that makes sense. But for the most part, these are designed so firms don't have to increase wages. Instead, they can bring in people from overseas to work the positions.

So it's not great policy, and it's not great politics. And yes, these companies have been lobbying for it, but there's no reason why the government has to listen to them.

Yes, it might be the case that your local coffee shop has to raise its wages, and people like me have to pay an extra five or 10 cents for a cup of coffee. I suppose that is a risk. But when you kind of balance things out.

We should also note that a lot of this comes from international students. So it's not just corporate Canada, but it's also, particularly the colleges, a little bit less of the universities saying, ‘Hey, we're not getting enough money from government. Let's bring in a lot of international students.’ And international students can absolutely enrich an institution. But if those institutions are not creating enough housing for them, it's going to cause problems in the community. And we've seen that. And obviously, we've seen the federal government start to dial that back.

But absolutely, none of this was an accident. It was the result of public policy and the result of various groups, whether it be corporate groups or the higher education sector, asking for these things. And I guess at some level, you always have to be careful what you wish for.

Sabrina Maddeaux: You touched on problems in the community. And I was going to say this all feels pretty problematic for social cohesion. I mean, on the one hand, well-off Boomers and Gen Xers like you get your pizza delivered faster, or you have a shorter line at Timmy's. But on the other hand, entry-level workers have to compete harder for a job, including relatively new permanent residents.

So if new immigrants and younger, less educated Canadians are starting to fall way behind financially, social mobility becomes even more of an uphill battle. And that sounds like a recipe for an even more divided society with many new immigrants and young Canadians on one side and, quite frankly, folks like you on the other.

Mike Moffatt: Yeah, you're absolutely right. I don't mind being called out on this. It does create this kind of two-tier society where upper-income folks who are older are kind of insulated from competition. But those entry-level jobs are having to compete vigorously for work. And I mentioned it before, one of the biggest groups that get affected by this are new permanent residents who again, are going to be here the rest of their lives, but are finding themselves competing with temporary foreign workers.

So I don't think it's a good thing for society. And as somebody who wants to have a relatively robust immigration system, this doesn't help things. This creates a natural backlash to immigration. So it's not helpful.

And we've seen that and we've talked to David Coleto and others who've shown us polling. So the Canadians have lost faith in the system, and they're not wrong. They see the fact that, particularly lower-income workers, are having to compete harder with each other for jobs and housing, healthcare, you name it, is not keeping up with population growth. So, this whole system has kind of undermined the confidence in our immigration system. And it is very problematic, particularly when it's creating winners and losers.

Sabrina Maddeaux: Now, this brings me to something called the Century Initiative, which is this registered charity that wants Canada to hit 100 million people by 2100. And they've had quite a bit of influence lately over immigration policy under the Liberals, which I think has resulted in some of the mistakes we've seen. Now, we're sitting at just over 40 million people in Canada. So we're talking about more than doubling our population when we already seem to be at a breaking point. Now, does this seem reasonable to you? And honestly, what should our goal even be when it comes to growing our population?

Mike Moffatt: Yeah, so defenders of the Century Initiative, or defenders of the general idea of hitting 100 million, point out - look, in the 21st century, if our population grows as fast as it did in the 20th century, we would hit 100 million. So it's really not that much different than traditional growth levels.

And that is absolutely true. The challenge is that we don't have 20th-century policy anymore, right? We don't have the institutions, the political institutions that are growing our infrastructure, like we did 60 or 70 years ago. Back when we had a population boom in the 50s and 60s and 70s, we didn't have a Green Belt, we didn't have sky high development charges, , we didn't have all these systems in place where if you're putting up a house and it creates like a shadow three days of the year, then all your neighbors got to oppose it in a large hearing.

So I think that's the issue that we have, institutions that are designed to slow growth; our housing, our infrastructure plans. Everything is all based on this idea, ‘Hey, we've got to be really cautious. We've got to slow things down, things can't change.

And that is fundamentally incompatible with an agenda that's increasing population growth or having robust population growth.

So we have to pick a lane! We can pick the lane that's ‘Hey, yeah, we want more population growth. And we're going to have the institutions that allow for that population growth. And we're going to have to make some difficult decisions when it comes to urban growth boundaries and the Green Belt and other things.’ Or we can have institutions that say ‘No. We want really slow growth, we want to be cautious, we want to be careful. And as such. We'll allow our population to grow. But, only a little bit.’

But you can't simultaneously be pro-growth and anti-growth and that's essentially what we are in Canada.

So that tends to be my issue more than, ‘Okay, is 100 million the right number, wrong number?’ The question is are all of our visions and plans aligned?

If we want to be a high-growth, high-population-growth country, great, let's have the institutions for that. If we want to be a country that's all about preserving the status quo, great, but that's fundamentally incompatible with robust immigration. So in my view, we've got to pick a lane here, and Canadians and Canadian governments are really bad at doing that. They want to have it all. And they don't want to acknowledge the existence of tradeoffs.

Sabrina Maddeaux Yeah, you absolutely can't have it every which way, which is what I think we've tried to do with our immigration policy, especially over the last decade or so. And that's why we're experiencing so many crises, whether it's youth unemployment or housing. And unfortunately, we're at a place now where I just think it's going to take a while for those systems to catch up.

I mean, it takes time to build housing, to build health care. So, to still be promoting this 100 million Canadian school and hyper population growth in this time period isn't responsible, in my opinion. Maybe if things do catch up, have that conversation 10-20 years from now. But to me at this moment, it's just completely out of touch with the realities on the ground.

Thank you, everyone, for watching and listening and to our producer, Meredith Martin.

Mike Moffatt: And if you have any thoughts or questions about how to get your pizza delivered faster, please send us an email to [email protected].

Sabrina Maddeaux: And we'll see you all next time.