C.D. Howe Institute Urges Overhaul of Canadian Immigration System
Report calls for economic-focused selection criteria to boost national productivity and living standards.
1Economic-Focused Immigration Reform
The C.D. Howe Institute recommends a fundamental shift in Canada’s immigration strategy to prioritize applicants based on their potential economic contribution. This proposal suggests moving away from recent metrics toward a points-based system that evaluates education, work experience, and language proficiency to ensure new arrivals are better aligned with labor market needs.
2Reversing Trudeau-Era Policy Shifts
The proposed changes aim to undo adjustments made by the former government in 2023, which moved away from a strict economic-success model. By reinstating the previous system that operated for two decades, the report argues that Canada can reduce the frequency of immigrants working in roles that do not match their professional skills.
3Addressing Productivity Growth Gaps
Between 2014 and 2024, Canada’s real GDP per capita grew by only 3.5 percent, significantly trailing the 20.2 percent growth seen in the United States. The report identifies this productivity gap as a primary barrier to rising incomes, urging the government to make long-term structural improvements rather than relying on temporary economic fixes.
4Broadening Human Capital Strategies
Beyond immigration, the report advocates for stricter verification of foreign credentials and higher admission standards for international students. It suggests that linking immigration levels directly to economic growth will help optimize human capital. The goal is to select more entrepreneurs who can contribute to the country's competitiveness and long-term financial stability.
5Sweeping Tax Policy Recommendations
The institute proposes reducing the general corporate income tax rate from 15 percent to 10 percent to stimulate investment. Additionally, the report calls for simplifying the personal income tax structure by reducing brackets from five to three and replacing various tax credits with a standard $10,000 basic allowance for all taxpayers.
6Reducing Business Subsidy Reliance
Federal business subsidies have surged by 125 percent since 2015, currently consuming $37.4 billion in taxpayer funds. The report advises reining in these expenditures to improve fiscal health. By cutting such spending and focusing on smarter regulations, the government could potentially unlock $140 billion in new business investment across the country.
7Navigating Global Trade Pressures
The Carney government is currently working to insulate the Canadian economy from trade wars and tariff policies initiated by the United States. Current efforts focus on structural improvements, including faster approval times for major projects, enhanced transportation infrastructure, and pipeline development to ensure Canada remains a competitive destination for international business investment.
8Long-Term Economic Outlook
Implementing these 100 policy changes is projected to add 2.5 percent to the overall economy. While the transition requires significant commitment, the institute emphasizes that raising productivity is the essential lever for increasing wages. Ultimately, these reforms aim to close the living standards gap between Canada and other major industrialized nations.