The Legacy of Justin Trudeau

Canadian Prime Minister Justin Trudeau announced his resignation this week, shortly after the stunning departure of Finance Minister Chrystia Freeland, who brought years of service as the most surpassingly loyal member of his cabinet to a sudden and humiliating end. After taking office as a hero of liberal values in 2015, Trudeau instead spent the last nine years implementing some of the most progressive values of any world leader—and now the bill is due and he will leave 24 Sussex with an abysmal 22% approval rating. Still, conservative critics consistently fail to give the devil his due.

So what went wrong?

In a nutshell, Trudeau made a reasonable attempt to address the country’s looming demographic implosion using replacement migration. Why reasonable? Because the coming storm looks grim and the alternative looked rather rosy at the time.

Canada has one of the fastest-aging populations in the developed world. Nearly 19% of Canadians are 65 or older, and this cohort is growing six times faster than children ages 0 to 14. Worse, Canada has a fertility rate of 1.3 children per woman, well below the replacement level of 2.1. This means natural population growth will not solve the problem. Meanwhile, the result is a spiraling labor shortage. The number of job vacancies nationwide collapsed from 991,680 in the third quarter of 2022 to 737,530 in the third quarter of 2023, a decline of 25.6%. Canada needs more healthcare and tech workers, especially as more Canadians start tapping their pensions and social services.

But to understand Trudeau’s decision, we must consider how past immigration trends have shaped the country’s labor force. During the Martin administration, China was the leading source country for immigrants to Canada. During the more recent Harper administration, it was the Philippines—and then China. Trudeau can be forgiven for thinking past is prologue and that future immigration demographics would echo these trends, or for believing this to be a good thing. After all, Chinese Canadians earn more than other groups because they tend to enter professional, scientific, and technical services as well as finance, insurance, and real estate. At the same time, Filipino Canadians have among the highest employment rates in the country—and almost one-third of Filipino women work in health care and social assistance. These two groups have made profound contributions to Canada’s economy, and Filipinas deserve special mention for helping Canada during the COVID-19 pandemic.

If Trudeau saw the demographic writing on the wall and the economic contributions immigrants were making, why not let more in? Except Trudeau didn’t just let more in, he opened the floodgates. The Chrétien administration, which governed Canada from 1993 to 2003, brought an average of about 240,000 immigrants annually, adding 2.25 million people to the country’s population. Between 2006 and 2015, the Harper administration welcomed about 250,000 annually, adding 2.4 million to the population. But Trudeau left them all in his dust.

The only comparable period was in 1913, when Canada admitted over 400,000 immigrants, a record that stood for more than a century until Trudeau surpassed it in 2021. He has admitted more than 3 million people so far, and had planned to bring in another half a million every year for the next several years. In 2022, 95% of population growth came from immigration.

The difference is, back then most of the immigrants were European and American. Later, as we have seen, they were mainly Chinese and Filipino. But not only did Trudeau let in far more than ever before, it was also of a different type. During his tenure, the main source country for immigrants has been India—followed by Pakistan. Many Indian and Pakistani immigrants have entered engineering and tech sectors, with the latter also going into transportation. These are valuable additions to the economy, but the juice isn’t worth the squeeze if the consequence is a suffocating housing shortage brought on by surging demand.

Between 2000 and 2021, home prices in Canada surged by a staggering 355%. The Canadian Housing Renewal Association reports Canada needs 4.4 million affordable homes to meet the housing needs of its population, while the Canada Mortgage and Housing Corporation estimates an additional 3.5 million housing units are required by 2030 to restore affordability to 2004 levels. But that’s never going to happen because as of November, the seasonally adjusted annual rate (SAAR) of housing starts in Canada was 262,400 units, an 8% increase from October’s 242,200 units. At this rate, by 2030 Canada will have added 1.6 million housing units, or less than half what the CMHC says the country needs.

In addition to punishing inflation rates, rent in Canada shot up 20% over the past three years. Almost 60% of Canadians now think the country has taken in too many immigrants and an Ipsos poll released in late December revealed 73% of Canadians think Trudeau should resign as his party’s leader. It was in this context that Finance Minister Freeland and Trudeau had a disagreement about a two-month sales tax holiday and the announcement of 250 Canadian dollar ($175) checks to Canadians, which Freeland considered “costly political gimmicks” that Canada can “ill afford” given everything noted above, not to mention Trump’s threats to impose sweeping 25% tariffs. “Our country is facing a grave challenge,” Freeland said in her resignation letter. “That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war.”

So while one can understand what Trudeau was trying to do, he went too far too fast—and only doubled down when things began to sour. And for that, he deserves all the opprobrium he has been receiving. Sure, over the past year, inflation has softened and Canada’s central bank has begun to cut policy rates. But these efforts are quite frankly a day late and a dollar short. To say nothing of the fact that his policies have started to result in some ominous societal shifts the likes of which we are already witnessing in the United Kingdom. This will be Trudeau’s legacy, and God only knows how bad it will get in the coming years.