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How Immigration Boosts Canadian Trade

Nov. 11, 2014
4 mins
A man sits holding a tablet device

When I first moved to Canada from India over five years ago I was surprised to find that, while 11,462 km from my country and birth and homesick, I didn't actually miss India. It was all around me, from the people to the food to Bollywood. This shouldn't come as a surprise - India has the third highest number of citizens who have immigrated to Canada. As well, there is a rapidly growing Indo-Canadian community, estimated to total over 1 million. As a result, Canada's trade relations with India has received a boost, growing 38% to $5.8 billion as India is a priority market under Canada’s Global Market Action Plan.

Immigration's Impact on the Export Industry

A 2010 Conference Board of Canada report, titled Immigrants as Innovators, supports the concept that higher immigration directly results in an increase in imports and exports. According to the report, a 1% increase in the number of immigrants to Canada corresponds to an increase in imports of 0.21% and exports by 0.11%.

Take for example, the influx of 1502 Chinese immigrants between 2008 and 2012, which resulted in the rise of Chinese imports to $95 million a year.

It has also been observed that Canada’s smallest trading partners also have the lowest number of immigrants. Gambia is one of the smallest trading partners of Canada's and also has the lowest number of immigrant presence in the country. Therefore, an additional rise of even a single immigrant would result in an increase of exports by $1000 a year.

Some of the top countries where Canada exports goods to are the U.S., China, Japan, Mexico and UK. Taking a look at some of exports figures - If there was an additional increase of 68 Japanese immigrants between 2008- 2012 then exports to Japan would have increased by $11 million a year.

There's a clear link between the number of immigrants and the state of trade; immigrants want to use the same products in Canada as they did in their native country. As well, immigrants bring with them product knowledge and loyalty, which helps increase exports back home.

The Philippines Period

A classic, and most recent, example would be that of the increase in immigration from the Philippines between 1999 and 2008. During that time period, the number of Filipino permanent residents in Canada increased 60% - the fastest recorded growth in 10 years in any country. This led to a boom in exports from Canada to the Philippines, growing from $360 million 1999 to $560 million in 2008 - an approximate increase of 55.5%.

Immigration and Foreign Direct Investment

Immigration has provided Canada access to new markets, which has improved innovation and economic competitiveness, and has provided an attractive platform for Foreign Direct Investment (FDI). According to Statistics Canada, multinational companies were not only 60% more productive, but also more innovative than domestic companies. A skilled workforce is one of the attributes that helps in roping in FDI, which is very much aligned with the Canadian immigration policy that is to focus on skilled migration. It is seen that countries investing in Canada have a much higher immigration rate, with a significantly higher population of newcomers than others. The FDI helps create extensive competitive pressure, which inspires innovative, economic and employment growth within Canadian organizations.

The Bigger Picture

As immigrants, we are so engrossed in either looking for a job or keeping up with day-to-day struggles that we sometimes fail to realize how immigration is boosting the economy. It is not only shaping the economy of Canada by investing in businesses and creating a diverse work force but also providing the country a global platform to build and strengthen international trade and relations.

About the Author: Pracheer Saran

I am a travel enthusiast and a freelance writer who loves to write about my escapades, from travel to beer – but when it comes to finances, I still had a lot to learn. I first moved to Canada five years ago, and as a new immigrant, getting a credit card to building a credit history was a mammoth task for me. I mostly learned from trial and error – and am still learning!

There is some homework a new immigrant can start a few months before moving to Canada to ensure a smoother settlement. So fasten your seat belts and join me for an informative ride as I share the challenges of managing my daily finances, hunting for my first job, battling high car insurance rates, buying my first house and securing a mortgage.

Pracheer Saran

Pracheer Saran is a travel enthusiast and a freelance writer who loves to write about his escapades, from travel to beer – but when it comes to finances, he still had a lot to learn. Pracheer first moved to Canada five years ago and found that as a new immigrant, getting a credit card to building a credit history was a mammoth task for him. He mostly learned from trial and error – and is still learning!

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