How We Got to 41 Million

When Canada’s population hit 40 million people last June, the federal government could not contain its excitement. “It’s a strong signal that Canada remains a dynamic and welcoming country, full of potential,” said Anil Arora, Canada’s chief statistician. Canada had grown more quickly than expected—by 1.1 million people over the previous 12 months, mostly due to a huge wave of international students and temporary foreign workers. And yet, despite the fanfare, this population boom wasn’t a good-news story. Because there were not enough homes for all those new people.

Immigration is at the heart of Canada’s success. It’s the gas that keeps our economic, cultural and social engines running. But in the last few years, the federal government has admitted too many people without a plan for where they would live. Back in 2013, Statistics Canada projected that Canada would have just 38.7 million people by 2023—a massive miscalculation. The consequences showed up everywhere. Tent encampments popped up all over the place, even in small towns. Rent soared, house prices flew out of reach. Half of all Canadians either did not have a doctor or could not get an appointment. Foreign students were shocked to arrive in Canada to find that they had to rent a bed in a shared room. Some newcomers were forced to live in shelters and, when the shelters were full, to sleep in the streets. A year later, it is obvious that the government has slow-walked us into a catastrophe. It would be wrong to say that immigration caused it, since that implies immigrants are to blame. It was the Liberals who kept bringing people in. They didn’t see the crisis coming.

Conservative Leader Pierre Poilievre, with his unerring instinct for finding political weak spots, swiftly capitalized on the Liberals’ folly, arguing that the sitting government had broken the Canadian dream. He also promised that a Conservative government would put financial pressure on municipalities to remove barriers to development, an approach the Liberals rejected out of hand. The government was slow to take ownership of the issue. Last July, Justin Trudeau was in Hamilton—a city that was recently forced to legalize tent encampments—to announce federal funding for an affordable housing project. “I’ll be blunt as well. Housing isn’t a primary federal responsibility,” he said. “It’s not something that we have direct carriage of.”

His deflection didn’t work. More recently, the Liberals have accepted that they were partly responsible for the housing crisis, throwing huge amounts of energy and money at the problem. In April of 2024, at a housing announcement in Dartmouth, Nova Scotia, Trudeau acknowledged the crisis—and accepted that his government’s immigration policies were partly to blame. “Over the past few years we’ve seen a massive spike in temporary immigration,” he said, “whether it’s temporary foreign workers, or whether it’s international students in particular that have grown at a rate that’s far beyond what Canada has been able to absorb.”

By then, as Poilievre had suggested, the Liberals were pressuring municipalities and provinces to approve more housing as a condition of federal funding. Finally, the government was tackling the problem from both ends, taking steps to expand supply and reduce demand. But it was too little, too late. It will take years to fix the crisis they’ve created. That’s terrible news for the Liberals, who are facing a wipeout in the next election. There will be fewer homes built this year than last. Young people, who cannot hope to buy real estate like their parents did, have largely abandoned the Liberals. Only 25 per cent of 18-to-35-year-olds would now vote Liberal, according to an analysis from Abacus Data CEO David Coletto. This group of voters, who were vital to Trudeau’s three election victories, are dispirited by their inability to afford housing, gloomy about their prospects and listening to Poilievre’s promises.

What’s worrying is the waning support for immigration: two years ago, 14 per cent of Canadians stated there were too many immigrants coming to the country, according to pollster Frank Graves of EKOS Research Associates Inc. Now it’s 57 per cent. “I’ve never seen anything like this,” he says. For decades, while the United States and Europe were trapped in emotional, divisive debates about migrants, most Canadians saw immigration working, setting us apart as a more inclusive society. This gave us a distinct economic advantage, making Canada a welcoming place for refugees and giving us a fighting chance at coping with the crushing demographic crunch coming when the boomers all retire. 

In two years, that consensus has fallen apart. How come nobody saw this coming? 

In 1965, during a three-week stint in Sudbury, folk singer Stompin’ Tom Connors wrote an ode to the hard-drinking, nickel-smelting, bingo-playing people who populated the mining town. “Sudbury Saturday Night,” his biggest hit, is remembered for its singalong chorus—“the girls are out to bingo, and the boys are gettin’ stinko”—but the second verse tells a story about immigration. Connors sings about the jumble of nationalities drinking together: Irish Jim O’Connell, German Trixie and Hunky Frederic Herzal. It’s no longer politically correct—“hunky” is an outdated slur for Ukrainians—but it celebrates immigration, reflecting, in its rough way, the growing pleasure in diversity that was emerging from Canada’s grassroots in the 1960s.

At the beginning of the 20th century, everything was different. In English Canada, the Orange Order wanted only Protestant Anglos and, in French Canada, the Catholic Church was leading a desperate demographic struggle against the swelling numbers of English speakers. Each saw the other as a threat, but neither group wanted immigrants who would change the ethnic character of the country. They wanted more people like them. As Rudyard Kipling told a Toronto audience in 1907, “You want immigration, and the best way to keep the yellow man out is to get the white man in. If you keep out the white then you will have the yellow man, for you must have labour.” And so, for 100 years after Confederation, the federal government encouraged a nakedly racist immigration system, seeking Europeans to till the farmland in the Prairies and the West. 

When Canada could not recruit enough Britons, it settled for white Germans, Poles, Ukrainians and Italians. Under pressure from the Conservatives, who campaigned on a “White Canada” platform, Wilfrid Laurier put a $100 head tax on Chinese immigrants and signed a cabinet order to prohibit Black people from entering the country. The 1910 Immigration Act allowed officials to exclude any immigrants “belonging to any race deemed unsuited to the climate or requirements of Canada.”

The policy worked. Between 1897 and 1914, more than three million immigrants—mostly white—came to Canada, almost doubling the population of the young country and ushering in a period of rapid growth and industrial expansion. Another big wave began after the Second World War, once again fuelled by a policy encouraging white immigration, although the racism was less overt. Liberal Prime Minister Mackenzie King allowed public servants to select immigrants based on the “absorptive capacity” of the country, which allowed his party to quietly favour white immigrants while excluding Jews and Communists. Canada took in tens of thousands of European refugees and even sent civil servants to Europe to help process them, motivated by both humanitarianism and a desire for labour to fuel the rapidly expanding economy. 

It wasn’t until 1962 that Canada’s first female cabinet minister, Ellen Fairclough of John Diefenbaker’s Progressive Conservative government, ended the White Canada policy. It no longer reflected the values of the increasingly diverse country. Canada moved toward colour-blind criteria: a points system that admitted immigrants on the basis of their education and skills. Pierre Trudeau’s Liberals put the last piece in place when they adopted a policy of multiculturalism in response to pressure from cultural groups who felt left out by official bilingualism. This pro-diversity position opened the door to newcomers from the West Indies and Asia. By 2000, most immigrants were coming from China, India and Pakistan. The ethnic composition of Canada was transformed. 

The waves of diverse immigrants during the postwar boom years put Canadians increasingly at ease with newcomers, fostering a more open society, more welcoming than others around the world. Immigrants brought new flavours and sounds, education and energy, boosting the economy and making Canada more worldly. We were helped by an accident of geography. Unlike the United States, with its long border with Mexico, or Western European countries, which are nearer to Africa and Asia, Canada has never had a large number of undocumented workers or backlash against them. Because so many immigrants arrived with higher education, they could contribute at hospitals and universities, rather than competing for work at the bottom of the pay scale. It wasn’t perfect—many immigrants still faced barriers to success—but no other country did a better job at attracting highly educated immigrants. Around the world, countries saw Canada’s system as a model. Even Donald Trump spoke of it approvingly.

This gave Canadians companies a competitive advantage, since they could bring in people more easily than in other countries. Our refugee settlement programs were celebrated as the best in the world. And Canadians supported it all. Polling shows that from the 1970s until last year, support for immigration gradually increased. It dipped in lean years—when work is hard to find, people want fewer immigrants—but over time, the trend was upward, and there was no large-scale political reaction against newcomers.

Even Conservatives, who represent less-diverse rural areas, came around. The Reform Party flirted with anti-immigration policies, but new Canadians had no reason to back a movement that was sending them mixed messages, and there were by then too many new Canadians to ignore. And so the party moved toward the mainstream on immigration and, by the time the Canadian Alliance merged with the Progressive Conservatives to form the new Conservative Party of Canada, it was no longer complaining about changes to the ethnic composition of the country. Party strategists could see that the suburbs—where they needed to win seats—were full of voters of diverse backgrounds, and they set out to win over newcomers. Stephen Harper’s government continued with pro-immigration policy, expanding the number of temporary foreign workers. In his last days as prime minister, in the 2015 election, Harper tried out anti-Islam messages, but they didn’t land—his misguided tirade against “barbaric cultural practices” helped Trudeau get elected. Kellie Leitch campaigned on anti-immigrant sentiment in the 2017 Conservative race to replace Harper, but finished sixth. Maxime Bernier’s People’s Party is explicitly anti-immigration, but he has never elected a member of Parliament. 

Canada is too diverse for an anti-immigrant election strategy. At the time of the 2021 census, 23 per cent of Canadians were foreign-born, one of the highest rates in the world. Almost half of Torontonians come from elsewhere. If you were born in 1960 in Sudbury, or most other places in Canada, you would have grown up with kids whose parents came from other countries. A 2018 Ipsos Public Affairs survey of 20,767 people in 27 countries found Canada was the most inclusive. Unlike in the United States, Britain or France, where anti-immigrant politicians amplify the views of those who feel like strangers in their own country, in Canada those people are sidelined and silenced. Until recently, when support for immigration suddenly plummeted, threatening the consensus that has allowed Canada to keep welcoming newcomers.

In 2016, the Trudeau government appointed Dominic Barton—then the global managing director of elite consulting firm McKinsey & Co.—to chair the new government’s Advisory Council on Economic Growth. The following year, the blue-ribbon panel came out with a report that called for Canada to gradually increase the number of permanent immigrants every year, peaking at 450,000 after five years. Although the government did not officially adopt the policy, it was quietly acting on it, tabling a plan for 500,000 immigrants a year by 2025. Outside government, Barton had established a business lobby group—the Century Initiative—to push for Canada to reach a population of 100 million by 2100. (The group’s CEO recently softened their stance, claiming that this wasn’t meant to be a literal target, but intended to spark conversation about population growth in Canada.)

As Barton and big employers were making the argument in the boardrooms and corridors of power, Globe and Mail columnist Doug Saunders was pleading his case in the public square. In 2019, he published Maximum Canada: Toward a Country of 100 Million, which argued persuasively for more rapid growth, so that Canada would be bigger and more powerful, gaining cultural, economic and geopolitical benefits from greater scale. This was the intellectual philosophy that underpinned the surge in immigration. 

The concept took off in 2021 and 2022. Coming out of the pandemic, Canada was desperate for labour. Tim Hortons franchises were reporting a staffing crisis as demand exploded. More than half of small businesses surveyed told the Canadian Federation of Independent Business that they were struggling to hire. The shortage was putting the economic recovery at risk.

The Liberals weren’t giving businesses what they wanted in fiscal or tax policy, so they stopped saying no to them on immigration. That went doubly so for universities and colleges—which happened to be important sources of Liberal votes. Many of them had responded to provincial funding cuts by ramping up programs for international students, who could be charged higher tuition, some for programs of dubious value. 

The Liberals were making it a lot easier to get into Canada. In April of 2022, they removed the cap on low-wage workers in seasonal industries, like fish processing and fruit picking, and extended visas for international students. That December, they gave work permits to family members of temporary foreign workers and increased the number of hours international students could work. Throughout, they were adding staff to process applications more quickly, introducing streamlined processes for highly skilled workers, opening the doors as wide as they could. They were also developing new pathways to permanent residency for students and temporary workers, which made those programs more desirable because students and workers could hope to eventually get a Canadian passport. In the same period, they also brought in more than 200,000 Ukrainian refugees, and an unknown number of migrants came in without papers, crossing at Roxham Road in the Quebec townships and at other unofficial border crossings. 

Then there were the incoming international students—more than 600,000 in 2021 and more than 800,000 in 2022, up from 142,200 in 2010. Some dodgy career colleges were acting as de facto visa clearing houses. The Liberals kept handing out visas, allowing students to be milked for high tuition and cheap labour. The students, who had reason to hope they could one day get permanent residency, kept streaming in. 

These policies all came to a head in the third quarter of 2022, when the population grew by 362,453, the fastest rate of growth since 1957, when Hungarian refugees arrived in the midst of the postwar baby boom. Employers, provincial leaders, bank economists and cultural communities were all on side. Inside the federal bureaucracy, however, there were warnings. In a briefing in 2022, officials warned, “Population growth has exceeded the growth in available housing units.” But nobody was listening. “Obviously, no one was thinking any of those thoughts,” a senior Liberal told me. “I can’t remember any conversations about, ‘Hey, all these temporary foreign workers, all these students, where are we going to put them? How are we going to treat them? How are they going to find a dentist?’ ” 

As the Liberals threw the doors open, they were being cheered on by employers, post-secondary institutions and even the provinces. “You can imagine it’s hard inside government, facing these stakeholder groups, to resist pressure to accommodate,” says Tyler Meredith, who was an economic adviser to Trudeau until 2022. The Liberals were saying yes to everyone, opening new pathways, and they were doing so without imposing caps.

Those who still support high levels of immigration say that it’s part of the solution to the housing crisis, because of labour shortages in the trades. But Mikal Skuterud, an economist at the University of Waterloo, argues persuasively that this is an illusion because newcomers don’t just provide labour, they also consume all kinds of things: food, health care, housing. “You’re generating a lot of extra demand.” Skuterud and other economists think that chasing economic growth through low-skill immigration is foolish because it increases economic activity but reduces GDP per capita and discourages business investment. “If you have access to cheap labour, you have no motivation to increase productivity,” says Benjamin Tal, deputy chief economist of CIBC World Markets Inc. “And I think that’s part of the reason why productivity in Canada is not advancing.”

Under economic and political pressure, our leaders made short-term decisions, straying from the long-standing Canadian policy of only letting in immigrants who are likely to add to the country’s productivity in the long term and leaning instead on unskilled temporary workers. They seem to have been guided by the view, as advocated by Barton and Saunders, that a bigger Canada would be a better Canada. But they didn’t do the planning that was necessary. In his book, Saunders acknowledged that his idea would only work if Canada was prepared to make the necessary investments in housing, transit and integration, to prevent new Canadians from ending up unhoused, unemployed and unsupported. “The risk of any immigration increase’s tipping the balance of Canadian public opinion from tolerance into distrust might make it not worth considering,” he wrote.

Now that this has happened, policy-makers and planners will have to acknowledge their failures and listen to voters, who are preoccupied with housing prices, health-care shortages and cost-of-living issues. In the short term, they’ll need to decide how many immigrants to admit based only on those criteria. 

On the global stage, Canada punches below its weight. In both military and foreign aid, we spend less than similar countries, which means we do less to solve problems around the planet. The one thing we bring to the table is the ability to offer sanctuary to people from afar. Beginning with displaced people from Europe after the Second World War, continuing with Hungarians and other Eastern Europeans fleeing Soviet crackdowns in the 1950s and ’60s, then the Vietnamese boat people in the 1970s and, most recently, refugees from wars in Iraq, Syria and Ukraine, we have an important tradition of taking in displaced people, welcoming them and helping them make new homes.

We can only do that when Canadians believe the system works, that there is room enough for everyone. That is no longer true. If we value that tradition—one of the best things about our country—we need to make sure we have enough to offer new Canadians before bringing them here.

This story appears in the July issue of Maclean’s. You can buy the issue here or subscribe to the magazine here.