Economy
Federal mismanagement to blame for Canada’s immigration backlash
From the Macdonald Laurier Institute
By Sonia Orlu for Inside Policy
Canada’s welcoming attitude towards newcomers makes it one of the most sought-after places to live in the world. However, this image is being tested by a growing backlash against immigration. Immigrants make up 23 per cent of the population, yet economic, social, and cultural anxieties are increasingly challenging the country’s commitment to diversity. More than four-in-ten Canadians now agree – either strongly (23 per cent) or somewhat (21 per cent) – with the statement, “There is too much immigration to Canada.” It is crucial to understand that this backlash is not rooted in opposition to immigration or immigrants themselves, but rather in frustration over mismanagement and inadequate planning by the federal government. It reflects a growing unease about the country’s economic outlook, raising urgent questions about how Canada can uphold its values while addressing legitimate and pressing concerns.
Public reactions and political responses
Canadian political leaders have generally maintained a measured tone on immigration, focusing on economic pressures and service delivery rather than hostility toward immigrants. However, tensions are rising, and a thoughtful debate is increasingly needed.
Prime Minister Justin Trudeau has accused the Conservative Party of spreading misinformation to stoke fears about immigration. Such remarks risk alienating those with legitimate critiques of his administration’s policies and practices. Conservative Leader Pierre Poilievre has linked immigration to housing shortages, criticizing Trudeau’s policies as disconnected from infrastructure needs. This aligns with public frustrations over housing availability and the need for better coordination between immigration levels and capacity. Quebec Premier François Legault echoed similar sentiments, raising issues of resource management and culture. His critics accuse him of xenophobia, but dismissive responses like Immigration Minister Marc Miller’s remark that people are “always blaming immigrants” overlook genuine challenges and deepen frustration.
These exchanges illustrate the delicate balance required in navigating immigration policy and public sentiment. Canadians’ attitudes toward immigration are more nuanced than a simple pro- or anti-immigration divide. Most Canadians aren’t driven by fear or racism; rather, they are focused on how immigration impacts housing affordability, strains public finances, and increases job competition. While apprehension about immigration levels is growing, attitudes toward immigrants themselves remain largely positive. In fact, more than four-in-ten Canadians (42 per cent) say that immigrants make their community a better place, with fewer than one-in-ten (9 per cent) feeling that they make it worse. Still, public concerns must be addressed to prevent further polarization.
The housing crisis: a catalyst for frustration
A significant driver of the immigration backlash is the housing crisis. The Canada Mortgage and Housing Corporation (CMHC) reported in 2024 that Canada needs an additional 3.5 million housing units by 2030 to restore affordability. Cities like Toronto and Vancouver have seen housing prices soar, partly due to increased demand from population growth.
The “housing theory of everything” highlights how housing affects multiple societal issues – such as economic inequality, social mobility, and political polarization. Immigration is no exception. Housing shortages drive up costs, deepen inequality, and create competition between immigrants and long-term residents, eroding social trust and cohesion.
The rise in temporary residents, including international students and temporary foreign workers, compounds these issues. Immigration, Refugees and Citizenship Canada (IRCC) reports that the number of temporary residents increased by over 50 per cent from 2017 to 2022 and continued to rise sharply into 2024. This influx contributes to increased demand in the rental housing market, particularly in urban centres with large universities, driving up prices and reducing availability.
The Trudeau government’s ambitious plan to admit nearly 500,000 new permanent residents annually by 2026 marks one of the highest per-capita immigration rates globally. By comparison, Canada admitted around 200,000 landed immigrants per year in the 1990s and 250,000 per year in the early 2010s. Without matching investments in infrastructure and housing, these elevated immigration levels – often referred to as “mass immigration” – could exacerbate housing shortages, strain public services, and heighten public frustration. Internal documents from Immigration, Refugees, and Citizenship Canada revealed that as early as 2022, officials warned that large increases in immigration could worsen housing affordability and strain public services. Yet, no substantive steps were taken by the government to revise its targets.
Given the realistic timelines for development, it is improbable that infrastructure can keep pace with rapid population growth. The construction industry faces labour shortages, regulatory hurdles, and lengthy timelines for project completion – often several years. The CMHC maintains that due to these complexities, expecting cities to rapidly scale up infrastructure to meet immediate demands is unrealistic.
If these housing issues are not resolved, public frustration could escalate, potentially shifting from concerns about immigration policy to resentment toward immigrants themselves.
Cultural integration: balancing diversity and cohesion
Economic challenges, such as housing affordability, often intersect with social and cultural anxieties. As communities experience rapid change and strained resources, questions arise about society’s ability to integrate newcomers without compromising its social fabric. While only about 4 per cent of Canadians express fears that immigration weakens local culture and identity, concerns about the effectiveness of integration are more widespread. In fact, approximately half of Canadians are concerned that some immigrants may not be adopting Canadian values or fully participating in the broader community. When asked which values immigrants should adopt, Canadians often prioritize language proficiency and respect for the country’s history and culture, highlighting the importance placed on cultural integration. Interestingly, both native-born and foreign-born Canadians largely agree on the values newcomers should embrace, indicating a shared vision for integration.
Canada’s sense of nationhood is deeply tied to its history of migration and its commitment to cultural and ethnic diversity. However, diversity is not inherently beneficial in all forms; its value depends on whether it leads to greater tolerance, creativity, or economic growth. When cultural and ethnic diversity is celebrated without deliberate efforts to foster interaction and promote unity, it risks becoming fragile. Poorly managed diversity can lead to social fragmentation, lower trust, and weakened civic engagement.
The challenges of integration are well-documented. Language barriers, different social norms, and unfamiliarity with Canadian institutions can make it difficult for immigrants to fully integrate. This can sometimes lead to the formation of cultural enclaves, where newcomers find comfort in communities with shared backgrounds but have limited interaction with the broader society. While these enclaves provide crucial support, they can inadvertently hinder full participation in Canadian life. Sociologist Robert Putnam found that, in the short term, diversity can reduce social capital and lower community engagement, particularly when institutions fail to promote integration – a concept he refers to as “hunkering down.” In such cases, both newcomers and long-term residents may feel isolated.
Despite these challenges, diversity, when managed effectively, can yield benefits. Exposure to different cultures fosters creativity, innovation, and economic growth, even though research suggests that immigration itself is neither inherently good nor bad for the economy. Cities like Toronto and Vancouver have thrived in part due to their multicultural populations, which have helped them become global hubs for technology and the arts. Additionally, evidence shows that successful integration is common in Canada. Many immigrants actively embrace Canadian values, contribute to the economy, and participate in civic life. The majority of eligible immigrants become Canadian citizens, demonstrating a strong commitment to their new country. Many immigrants choose Canada precisely because they align with its principles of democracy, equality, and respect for human rights. Cultural integration, in the end, is a dynamic process – one that, when approached thoughtfully, strengthens rather than weakens the social fabric.
Bridging policy failures with sustainable solutions
Addressing public frustrations with immigration requires a serious reassessment of the policies that have exacerbated these concerns.
First and foremost, tackling the housing crisis through integrated planning is essential. Governments should incentivize affordable housing development and reform zoning laws to allow for higher-density projects. Recognizing the realistic timelines for construction and development, planning must begin immediately and be synchronized with immigration targets. Public sentiment strongly supports this approach. A recent Nanos Research survey found that 72 per cent of Canadians want to reduce immigration levels until housing becomes affordable.
Aligning immigration levels with the country’s capacity is crucial. Dynamic targets based on real-time economic data and infrastructure development would ensure that immigration aligns with Canada’s ability to provide services and opportunities. Returning to historical admission levels of 200,000 to 250,000 immigrants per year could help ease pressure on housing and public services. Adjusting the composition of immigration streams is equally important.
Temporary measures – such as pausing or reducing programs for international students and temporary foreign workers – could relieve immediate pressures while infrastructure catches up. For instance, although international students contributed over $30 billion to the economy in 2022, lowering their numbers could help reduce housing demand in university towns. Likewise, managing temporary foreign worker intake would address labour shortages without overwhelming resources.
Effective integration and support services must also be given priority. This should begin with implementing consistent selective immigration measures that evaluate an applicant’s potential to integrate both economically and culturally into Canadian society. Such measures would reduce reliance on extensive post-arrival support and help ease cultural tensions. According to a 2018 Angus Reid survey, two-in-three Canadians believe that greater emphasis should be placed on screening for alignment with Canadian values. However, it’s important to note that defining “Canadian values” can be subjective and risks being perceived as discriminatory.
Improvements to post-arrival services like community centres offering language classes, job search support, and cultural orientation programs are necessary to significantly ease the transition for newcomers. Research shows that when immigrants are effectively integrated, they are more likely to find employment, increasing tax contributions and reducing their reliance on social services. Additionally, well-integrated immigrants are more likely to engage in civic life, fostering social cohesion and strengthening community resilience.
Cultural diversity, while valuable, cannot be assumed to sustain itself without active support. Integration is not just about where people live or demographic representation; it also involves cultivating a shared sense of purpose and belonging. Successful integration depends on a reciprocal relationship: immigrants need the resources and opportunities to succeed, and in turn, they must engage with and contribute to the broader societal and cultural framework. Without deliberate policies that encourage community engagement, cross-cultural dialogue, and mutual respect, there is a risk that cultural diversity will falter.
Finally, responsible political discourse is crucial. Leaders must choose their words carefully, as rhetoric shapes public perceptions. By fostering nuanced and empathetic dialogue, they can bridge the gap between public concerns and policy realities, preserving national unity.
Canada stands at a crossroads. While immigration has long been one of our greatest assets, the current backlash highlights cracks in its management. This is not a rejection of immigrants – it’s a call for better policies and improved management. High immigration levels without careful planning will continue to harm our society. Our leaders now face a choice: fan the flames of division or unite the country around meaningful, evidence-based solutions.
Sonia Orlu is a Ph.D. student in Political Science at Simon Fraser University and a commentator on politics and culture. She is a contributing writer to the Macdonald-Laurier Institute.
Business
Carney and other world leaders should recognize world’s dependence on fossil fuels
From the Fraser Institute
By Julio Mejía and Elmira Aliakbari
Simply put, despite trillions invested in the energy transition, the world is more dependent on fossil fuels today than when the United Nations launched its first COP. No wonder that ahead of COP30, leading voices of the net-zero-by-2050 agenda, including Bill Gates, are acknowledging both the vital role of fossil fuels on the planet and the failure of efforts to cut them.
On the heels of his first federal budget, which promises more spending to promote a “green economy,” Prime Minister Carney will soon fly to Brazil for COP30, the 30th United Nations climate summit. Like the former Trudeau government, the Carney government has pledged to achieve “net-zero” emissions in Canada—and compel other countries to pursue net-zero—by 2050. To achieve a net-zero world, it’s necessary to phase out fossil fuels—oil, natural gas, coal—or offset their CO2 emissions with technologies such as “carbon capture” or large-scale tree planting.
But after trillions of dollars spent in pursuit of that goal, it appears more unrealistic than ever. It’s time for world leaders, including Canada’s policymakers, to face reality and be honest about the costly commitments they make on behalf of their citizens.
For starters, carbon capture—the process of trapping and storing carbon dioxide so it’s unable to affect the atmosphere—is a developing technology not yet capable of large-scale deployment. And planting enough trees to offset global emissions would require vast amounts of land, take decades to absorb significant CO2 and risk unpredictable losses from wildfires and drought. Due to these constraints, in their net-zero quest governments and private investors have poured significant resources into “clean energy” such as wind and solar to replace fossil fuels.
According to the International Energy Agency (IEA), from 2015 to 2024, the world’s public and private investment in clean energy totalled and estimated US$14.6 trillion (inflation-adjusted). Yet from 1995 (the first COP year) to 2024, global fossil fuel consumption increased by more than 64 per cent. Specifically, oil consumption grew by 39 per cent, natural gas by 96 per cent and coal by 76 per cent. As of 2024, fossil fuels accounted for 80.6 per cent of global energy consumption, slightly lower than the 85.6 per cent in 1995.
The Canadian case shows an even greater mismatch between Ottawa’s COP commitments and its actual results. Despite billions spent by the federal government on the low-carbon economy (electric vehicle subsidies, tax credits to corporations, etc.), fossil fuel consumption in our country has increased by 23 per cent between 1995 and 2024. Over the same period, the share of fossil fuels in Canada’s total energy consumption climbed from 62.0 to 66.3 per cent.
Simply put, despite trillions invested in the energy transition, the world is more dependent on fossil fuels today than when the United Nations launched its first COP. No wonder that ahead of COP30, leading voices of the net-zero-by-2050 agenda, including Bill Gates, are acknowledging both the vital role of fossil fuels on the planet and the failure of efforts to cut them.
Why has this massive effort, which includes many countries and trillions of dollars, failed to transition humanity away from fossil fuels?
As renowned scholar Vaclav Smil explains, it can take centuries—not decades—for an energy source to become globally predominant. For thousands of years, humanity relied on wood, charcoal, dried dung and other traditional biomass fuels for heating and cooking, with coal only becoming a major energy source around 1900. It took oil 150 years after its introduction into energy markets to account for one-quarter of global fossil fuel consumption, a milestone reached only in the 1950s. And for natural gas, it took about 130 years after its commercial development to reach 25 per cent of global fossil fuel consumption at the end of the 20th century.
Yet, coal, oil and natural gas didn’t completely replace traditional biomass to meet the surging energy demand as the modern world developed. As of 2020, nearly three billion people in developing countries still relied on charcoal, straw and dried dung to supply their basic energy needs. In light of these facts, the most vocal proponents of the global energy transition seem, at the very least, out of touch.
The world’s continued reliance on fossil fuels should prompt world leaders at COP30 to exercise caution before pushing the same unrealistic commitments of the past. And Prime Minister Carney, in particular, should be careful not to keep leading Canadians into costly ventures that lead nowhere near their intended results.
Business
Ottawa should stop using misleading debt measure to justify deficits
From the Fraser Institute
By Jake Fuss and Grady Munro
Based on the rhetoric, the Carney government’s first budget was a “transformative” new plan that will meet and overcome the “generational” challenges facing Canada. Of course, in reality this budget is nothing new, and delivers the same approach to fiscal and economic policy that has been tried and failed for the last decade.
First, let’s dispel the idea that the Carney government plans to manage its finances any differently than its predecessor. According to the budget, the Carney government plans to spend more, borrow more, and accumulate more debt than the Trudeau government had planned. Keep in mind, the Trudeau government was known for its recklessly high spending, borrowing and debt accumulation.
While the Carney government has tried to use different rhetoric and a new accounting framework to obscure this continued fiscal mismanagement, it’s also relied on an overused and misleading talking point about Canada’s debt as justification for higher spending and continued deficits. The talking point goes something like, “Canada has the lowest net debt-to-GDP ratio in the G7” and this “strong fiscal position” gives the government the “space” to spend more and run larger deficits.
Technically, the government is correct—Canada’s net debt (total debt minus financial assets) is the lowest among G7 countries (which include France, Germany, Italy, Japan, the United Kingdom and the United States) when measured as a share of the overall economy (GDP). The latest estimates put Canada’s net debt at 13 per cent of GDP, while net debt in the next lowest country (Germany) is 49 per cent of GDP.
But here’s the problem. This measure assumes Canada can use all of its financial assets to offset debt—which is not the case.
When economists measure Canada’s net debt, they include the assets of the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP), which were valued at a combined $890 billion as of mid-2025. But obviously Canada cannot use CPP and QPP assets to pay off government debt without compromising the benefits of current and future pensioners. And we’re one of the only industrialized countries where pension assets are accounted in such a way that it reduces net debt. Simply put, by falsely assuming CPP and QPP assets could pay off debt, Canada appears to have a stronger fiscal position than is actually the case.
A more accurate measure of Canada’s indebtedness is to look at the total level of debt.
Based on the latest estimates, Canada’s total debt (as a share of the economy) ranked 5th-highest among G7 countries at 113 per cent of GDP. That’s higher than the total debt burden in the U.K. (103 per cent) and Germany (64 per cent), and close behind France (117 per cent). And over the last decade Canada’s total debt burden has grown faster than any other G7 country, rising by 25 percentage points. Next closest, France, grew by 17 percentage points. Keep in mind, G7 countries are already among the most indebted, and continue to take on some of the most debt, in the industrialized world.
In other words, looking at Canada’s total debt burden reveals a much weaker fiscal position than the government claims, and one that will likely only get worse under the Carney government.
Prior to the budget, Prime Minister Mark Carney promised Canadians he will “always be straight about the challenges we face and the choices that we must make.” If he wants to keep that promise, his government must stop using a misleading measure of Canada’s indebtedness to justify high spending and persistent deficits.
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