Canada’s population soared during 2022’s second quarter as a record pace of newcomers led to the highest quarterly gain since 1949, when Newfoundland entered confederation.
Total population rose 0.7 per cent or 285,000 people over the latest quarter owing to international immigration. This included individuals fleeing the war in Ukraine and an increase in foreign workers and students as borders fully reopened.
Similarly, B.C. experienced a strong increase in population during the second quarter with a near 0.9 per cent (45,515 people) increase to reach nearly 5.32 million people. This was the largest single quarter rate of growth since the mid-1990s. At 2.2 per cent, year-over-year growth was the strongest since late 1996. Like the national picture, B.C. saw a deluge of non-permanent residents, which accounted for more than half of the quarterly gain at 26,942 people, compared with about 3,300 in the first quarter and a negative value a year prior. Net immigration, excluding non-permanent entries, decelerated but remains well above a typical second quarter increase as inflows continued to make up for pandemic period weakness.
Net interprovincial migration has been a key source of population growth for B.C. through much of the pandemic as hybrid/remote working conditions, less stringent COVID-19 economic restrictions and retirements drew Canadians west. Gains from other provinces continue to lift population with a net inflow of about 4,300 people during the quarter, but the trend has moderated as pandemic drivers wane while more B.C. residents are taking their rucksacks east.
The latest figures point to a net inflow from Ontario of 4,200 people during the quarter, accounting for most of the increase. Manitoba and Saskatchewan were also main contributors. In contrast, Alberta was a net recipient from B.C. during the quarter, ending the pandemic era inflow. We will see if lower home prices and a spiffy marketing campaign will keep Albertans home and attract B.C. residents over the Rockies.
The latest population spike is likely to retreat in the coming quarters, but we can expect population growth to remain robust and support longer-term labour force expansion and economic capacity. However, it takes time for newcomers to settle and adapt. Population growth is currently lifting consumer demand and inflation while adding to pressures on rental markets. While high interest rates are not conducive to homeownership demand and construction today, policy makers will need to address the need to house the growing population or risk another spike in home values and rents in the future.
September small and medium enterprise Business Barometer readings by the Canadian Federation of Independent Business pointed to further erosion in longer-term confidence among B.C. businesses. The long-term index dropped to 48.8, the first dip below 50 points since April 2020. The short-term index (three months) edged up to 48.2 in September, following August’s 46.7 reading. This marked the fifth consecutive monthly decline for the long-term index and the third consecutive month of a short-term index below 50, suggesting a continued deterioration of forward expectations for business performance in B.C.
Most provinces have very tempered outlooks over the short-term with readings below 50 points. The monthly increase in B.C.’s short-term expectation may reflect the positive business outlook towards upcoming winter tourism activities. That said, B.C. was the only province having a long-term reading below 50 points. The real estate market correction may have a more severe impact on B.C.’s economy than other provinces. •
Bryan Yu is chief economist at Central 1 Credit Union.
