Today’s topic will be ‘children’. This is because, clearly, I am an expert.
Okay, full disclosure. No kids in this marriage. Just dogs. Many of them. In fact, I dislike children. They’re immature, expensive and inefficient. School buses irritate me. I turn the TV off if there’s an interview with anyone under 21. I don’t understand why being a good parent so your kid can grow up to be worthy is more important than trying to be worthy yourself.
But whadda I know? Apparently nothing.
So let’s talk about the economic implications of kids, population, immigration and the pickle Canada finds itself in.
First, too many Canadians think like me. It’s dangerous and weird. The birth rate here has plunged in recent years – accelerating rapidly over the past decade and a half. To maintain a stable population, the women in a nation need to produce an average of 2.1 children during their reproductive lifetime. The US has a level of 1.63, which is why Trump’s anti-immigration, mass-deportation policy is more racism than strategy. Canada is down at 1.26, and headed for a net population decrease.
This is a record. We have joined the lowest-fertility nations on earth (South Korea, Japan, Spain, Italy). Moreover, births are becoming more difficult and perilous as the percentage of preemies soars. Experts (not me) suggest this is because Canadian women have been putting off starting a family.
Canada’s plunging births, falling residents
Source: BMO Economics
In 1993 the number of new moms over 35 was less than 11%. Now it’s more than one in four. The average age for giving birth is 32. Having children later means having fewer of them over a lifetime, which is one big reason the fertility rate has rocked lower.
So, we are not reproducing ourselves. In fact, the population of Canada would decrease rapidly – and the economy shrink dramatically – if walls went up across our border and around our shores. That, of course, brings us to immigration.
This is the single biggest topic of blog comments which are deleted. Every single day. The rapid post-pandemic population increase which was an economic policy of the Trudeau government stoked, fed and amplified prejudices while providing a convenient rational for all our woes. Inflation. Rents. House costs. Health care shortages. Wait times. Job loss.
Some of that (like lease costs) had validity. Much of it (real estate values, for example) had none. But humans are humans. They like to blame. Canadians are really good at it. Nothing wrong is ever our own fault. We’re perfect.
Well, that immigration has just dried up.
Chopped immigration is big financial news
Source: Bloomberg
The international students have been told to stay home. Temporary foreign workers are highly restricted now. We have a national ban on non-residents buying real estate, and a special federal tax on all those who already own. On an annualized basis, population growth just hit zero. Seasonally-adjusted, it is 0.8%. There’s a net outflow of non-permanent residents now of 100,000 a year. Permanent immigration levels (folks who have gone through years of waiting and a vetting process) have stabilized at about 300,000. But that is not enough, going forward, to prevent a declining population.
By the way, one of the most barren places in Canada for kids is BC. The birth rate there is down to 1.00, or less than half the natural replacement level. You should also know that each year 350,000 babies are born in Canada. And each year about 330,000 of us die.
So, were it not for immigration since Covid, the economy would have been in recession with higher unemployment, lower corporate profits, a poor equity market, lousy returns in your TFSA – but lower rents in your city and (maybe) more stable house prices – albeit at elevated pandemic levels. Now with immigration slashed and the birthrate abysmal, plus a Trumpian trade war in play, the odds of a shrinking GDP are with us. You can also blame that on immigrants. Not enough of them.
Finally, why are women having fewer kids? Are couples putting it off because of high housing and living costs, despite all the government freebies for parents? Undoubtedly, many are. Thus, the average mom is now mid-30s.
But analysts also say the fertility rate falls as education rises. These days a majority of uni students are female. Women have careers, just like the men. Trad wives are fewer and far between. The goal of marriage, for many, is not just family, but to build an economic unit anchored in love and trust.
Don’t judge.
About the picture: “Will you take one more feline pic?” asks Shira, in Toronto. “This is Furby. My friend has been cat-sitting Furby. This is Furby’s reaction to Trump’s tariffs. “It’s a ‘cat’-astrophe”, he meowed! Thanks for your daily informative and entertaining column – I love reading it.”
Note to readers: Yes, we are down to the ‘angry cat’ pictures. This is therefore an urgent call for fresh canine faces to grace this pathetic blog. You can send to ‘garth@garth.ca’. Or we capitulate.