Canada is winning when it comes to attracting immigrants, but failing to use its windfall.

That was the take from RBC examining the immigration boom that makes up nearly all growth. In an email to investors, they explain the immigrants are younger and better educated than Canada’s domestic workforce. However, they were more likely to be overqualified for their job, and have worse housing. If Canada doesn’t correct course, it risks exacerbating the issues it’s trying to solve.

Canada is pursuing an aggressive immigration plan, and it’s been very effective. The country averaged 7 immigrants per 1,000 people from 2010 to 2019. It tops the G7, beating the US that previously held the top spot before Canada. It’s a good thing too, because Canada is a demographic time bomb. 

Canada is hoping immigrants can resolve its upcoming demographic cliff. In 2021, immigration accounted for 90% of the country’s population growth. By 2050, Statistics Canada estimates 100% of growth will be based on immigration. If immigration fails to keep up, deaths would easily outpace births.

“Indeed, new immigrants can fill open positions, but they also increase demand for housing and consumer goods which in turn raises demand for labor,” writes Nathan Janzen, assistant chief economist at RBC, Canada’s largest bank.