Reducing immigration too sharply to alleviate the housing crisis would be a mistake, warns the chief economist of Desjardins Movement, Jimmy Jean. Such a remedy could simply harm the patient, according to him.
“If we just reduce the levels, all that will happen is that there will be less complaining, if we want, but we will not resolve a quarter of the issue,” he says. he during a conference on 2024 economic forecasts, Thursday, organized by CFA Montreal.
The problem is not so much that there is an influx of immigrants greater than the reception capacity, but that there are not enough newcomers who will work in the construction sector, which is lacking arms, he emphasizes. “There is a big docking problem. »
Debates over immigration thresholds are at the forefront across Canada, in a context of insufficient housing supply. “I worry that the pendulum is swinging too far to the other side,” confides Mr. Jean in an interview on the sidelines of his speech.
“I think that in Canada and Quebec we have a very strong consensus historically on the benefits of immigration and this has been documented by economic research. So, there is a reason why we have this strategy in place,” he adds.
He mentions the investment plans of Hydro-Québec, which will need 35,000 construction workers, to demonstrate the extent of the needs.
“We must also think about all our ambitions because sooner or later, the question will, by default, arise again. Doing less isn’t necessarily the solution, it’s really about doing better. »
Mr. Jean notes that the debate is more balanced in Canada. “We are not like Donald Trump who says that immigration poisons the blood of the nation,” he adds.
To the financial professionals who came to listen to him, Mr. Jean underlined that, despite the challenges of securing and access to housing, immigration had had a positive contribution to the economy in 2023. “What prevented to have a recession Canada is immigration. »
He also judges that automation is not a miracle solution to labor scarcity. “There is a theoretical argument to say: ‘this will force companies to invest because all of a sudden, there will be no more labor,’ but it is easier to say than to do. Not all sectors are suitable for investments in automation. »
Economic forecasts
Mr. Jean made his plea during a presentation aimed at discussing economic and stock market forecasts for the year 2024. He was accompanied by the managing director of the BlackRock Investment Institute, Jean Boivin.
PHOTO ALAIN ROBERGE, THE PRESS
Jean Boivin
Mr. Boivin believes that stock markets will continue their momentum during the first months of the year, while investors are enthusiastic about possible rate cuts.
However, he believes that inflation will persist more than expected and that investors may be surprised not to see as many rate cuts as they would have liked. “You also have to be prepared to change course quite quickly perhaps in the second half of the year, when inflationary pressures will become clearer at that time,” he suggests.
For his part, Mr. Jean believes that the weakness of the Canadian economy will force the hand of the Bank of Canada, which will have to lower rates before the Federal Reserve (Fed) in the United States.
He predicts that the first rate cut will take place in April in Canada. The Fed would follow a few months later around summer. “We think the markets are a little excited with the March story. »