Ottawa’s immigration cuts threaten provincial economy, experts say

Ottawa’s recent changes to immigration will strain Newfoundland and Labrador’s social security programs, according to a Memorial University professor who researches immigration in the province.

Tony Fang, a professor of economics at MUNL, says the federal government’s decision earlier this month to cut provinces’ economic immigration allotments by 50 per cent will have far-reaching impacts, including additional strain on programs and services.

Last year the Liberal government began decreasing the number of study visas for international students, tightened post-graduate work regulations, and scaled back temporary foreign worker programs as anti-immigrant sentiment rose in Canada due in part to increased unemployment rates and lack of affordable housing.

Amidst the changes, Newfoundland-based immigration lawyer Meghan Felt says the province at least had other economic immigrant programs to fall back on. The Newfoundland and Labrador Provincial Nominee Program and the Atlantic Immigration Program are two residency pathways for skilled workers coming into Canada. In 2024, Ottawa allocated the province 3,050 economic immigration spaces between the two programs.

On Jan. 16, provincial Immigration Minister Sarah Stoodley said had requested an increased allotment from Immigration, Refugee, and Citizenship Canada (IRCC) and that while she hadn’t expected Ottawa to approve extra allotments she hoped the numbers would at least remain the same as 2024. Stoodley said she was “shocked” to receive a letter from federal Immigration Minister Marc Miller on Jan. 15 informing her Newfoundland and Labrador’s spaces were instead being cut in half to 1,525.

Stoodley said she was under the impression that if the province accepted asylum seekers and humanitarian migrants, Newfoundland and Labrador would still maintain its allotment for the economic immigration programs. Allison King, a media contact for the province’s immigration department, told The Independent the government is in the process of taking in 190 asylum seekers over the next two years.

Fang says Ottawa should have consulted provincial leaders, experts, and the settlement and business sectors before slashing the province’s immigration allotments. While more populated provinces may benefit from immigration cuts, he says Newfoundland and Labrador will be at a greater risk of economic decline. 

Yolande Pottie-Sherman, an associate professor of geography at MUNL who specializes in immigration, says the cuts will hurt the province’s “immigration momentum.” Following decades of population decline, in 2022 the province reached its immigrant allocation targets. “We actually started to generate momentum in terms of recruiting, attracting and retaining people,” she says. 

Newfoundland and Labrador’s low birth rate and an aging population mean a growing number of residents require programs and services like pensions and healthcare while contributing less to the province’s economy, says Fang, who notes the declining number of young people simultaneously leads to decreased tax revenues. A shrinking workforce, he says, would result in constrained public services.

Fang says the average foreign worker is young and highly skilled since immigration programs have age restrictions. “If we don’t have immigration, our population will be stagnant at best and probably decline,” he says. According to Statistics Canada, 69 per cent of immigrants who entered the province between 2016 and 2021 were below the province’s retirement age of 65.

Province a low immigration region

Felt is “extremely disappointed” by the Liberals’ cuts to the two programs and says Ottawa’s blanket approach does not work for a province like Newfoundland and Labrador, which faces significant labour shortages — particularly in healthcare, construction, and child care. 

St. John’s Board of Trade CEO AnnMarie Boudreau said as soon as the federal government announced provinces would have to slash their economic immigration allocations, businesses began contacting the board about how the policy would impact their services. “‘We will see businesses have to make decisions about the hours they operate or the types of services they offer,’” she told The Independent.

The St. John’s Board of Trade and Labrador North Chamber of Commerce have requested a meeting with Miller to discuss the cuts, saying Ottawa’s “dramatic reduction will result in a significant and swift slowing of the economy, as the bulk of Newfoundland and Labrador’s population growth comes from immigration, and the new allocation does not account for the unique demographic and economic challenges faced by our province.

“We urge the federal government to reconsider these cuts and adopt a more flexible, regionally focused approach to immigration policy,” they said in the joint letter.

Meanwhile, Newfoundland and Labrador’s Medical Association has also condemned the move, noting the province ranked lowest “across all categories of health care performance, including access to regular doctors, urgent care, wait times for specialists, and elective surgeries, among other targets.”

Miller fires back

Facing backlash from several provinces and territories, Miller blamed the provincial leaders for the cuts, stating that provinces were not increasing the number of asylum seekers they were taking in.

Following a Jan. 24 Liberal caucus meeting, Miller said it’s “too bad” if provinces and territories are unhappy, he said, adding some premiers have “weaponized” conversations he had with them about asylum seekers.

“Immigration is a shared responsibility and I think premiers in particular that have the jurisdiction over parts of welcoming newcomers—some highly skilled folks—to this country that are contributing directly to the GDP of the country, need to be responsible in the way they talk about immigration,” Miller said.

The Quebec MP said a number of premiers have been “irresponsible” about immigration policies in general. He said “a number of provinces have stepped up” to take in more asylum seekers, and that the federal government will “hopefully” increase their immigration allotment. 

Rethinking programs and services

Days after Ottawa announced the cuts, the Liberals also revealed they will slash 3,300 jobs — roughly a quarter — at IRCC over the next three years. While the department has yet to announce which positions it’s cutting, Pottie-Sherman says the move could very well increase newcomers’ processing time. 

The department has a backlog of over 2 million applications with an average wait time of four years. According to the government’s website, the Atlantic Immigration Program’s average wait time is nine months, while the Provincial Nominee Program’s average wait time is between six and 20 months.

Pottie-Sherman says the province will need to rethink its immigration strategy and attract workers from within the country. Last June, for example, Newfoundland and Labrador signed a deal with South Korea to recruit early childhood educators from that country, but now may have to compete with other provinces to attract workers from within Canada, she says.

The province will have to prioritize hiring for the most in-demand jobs, including healthcare workers and early childhood educators, which will result in lobbying efforts from different sectors that rely on migrant workers, says Pottie-Serman, adding the government will have to make its offers more attractive. “We can’t afford to have Nova Scotia essentially out-compete us by bringing in pension plans for early childhood education.”

Under the new rules, 75 per cent of spaces in the Provincial Nominee Program must be reserved for people already in Canada, which Pottie-Sherman says is “the right thing” to do. “It’s telling people, you’re good enough to come here and work, so you’re good enough to stay.” 

Fang says provincial politicians, experts, and the employment and settlement sectors need to remain united in their call for the federal government to reverse its decision. Last week the provincial immigration department held virtual information sessions for businesses, labour organizations and community groups to discuss how the changes will impact them.

The Independent tried to attend one of the sessions but was denied access. “We just figured in order for the business groups to have just the ability to chat openly, without having media—perhaps they wouldn’t be able to speak as freely,” King said. “So we just wanted to leave it to the business organizations.”