Macroeconomic Impacts of Immigration in the Canadian Atlantic Region: An Empirical Analysis Using the FOCUS Model

Abstract

We simulate the impact of an increase in immigration into the Atlantic Provinces based on the FOCUS macro-econometric model at the University of Toronto. That national model was adapted to reflect the regional dimensions of the Atlantic Provinces. We find robust evidence of positive outcomes for the Atlantic region so long as it is part of a broader increase in immigration for the country as a whole. The positive outcome encompasses higher GDP and GDP per capita, higher consumption, and improved government fiscal balances at both the federal and provincial levels that could in turn be used for tax reductions or the enhancement of government services. These benefits could be enhanced further by carefully targeting new immigrants for needed skills and for their likelihood of remaining in the Atlantic region.

Keywords:

• Immigration
• macroeconomic impacts
• Atlantic Canada
• FOCUS model

JEL CODES:

• J11
• J15
• J18
• J24

Acknowledgments

We are thankful to Steven Wald for his contributions to the data development and calculations that serve as key inputs to the FOCUS model simulations.

Disclosure statement

The authors declared that they have no conflict of interest.

Notes

1 Detailed documentation for Focus version 21C used in this study can be obtained from the Policy and Economic Analysis Program, Rotman School of Management, University of Toronto.

2 Detailed documentation for Focus version 21 C can be obtained from the Policy and Economic Analysis Program, Rotman School of Management at the University of Toronto.

3 In particular, Statistics Canada Tables 36-10-0221-01, 36-10-0222-01,36-10-0223-01,36-10-0224-01,36-10-0226-01,36-10-0402-01,36-10-0432-01,36-10-0450-01 and 36-10-0482-01.

4 Detailed documentation for the Focus-Ontario model can be obtained from the Policy and Economic Analysis Program, Rotman School of Management, University of Toronto.

Additional information

Funding

This work was financial supported by the Social Sciences and Humanities Research Council of Canada that is gratefully acknowledged (890-2020-0051). This work was also supported by the Atlantic Canada Opportunities Agency.