Quebec’s tuition hikes and French requirements are among the factors weighing down the city’s growth rate — the worst of 13 major Canadian markets, a Conference Board of Canada report says.
Real GDP across Canada is projected to rise 0.7 per cent in 2024, Conference Board economists predict. The 12 other markets surveyed include Vancouver, Calgary, Regina, Winnipeg, Toronto and Halifax.
Population growth in Montreal is being directly affected by “the increase in tuition fees for foreign students and the more stringent rules on French-language capabilities, as well as the national cap on foreign students,” Jane McIntyre, an economist at the Ottawa-based Conference Board, said in an interview.
This year “will definitely be a bit of a rocky ride,” she added. “The one thing that’s different about Montreal and that will take it through 2024 and beyond is the immigration picture. There are lower levels of immigration, more stringent provincial rules and now on top of that, you’ve got the federal government introducing a cap on foreign students. Those things are going to weigh on Montreal in 2024 and beyond.”
After hitting almost three per cent in 2023, Montreal’s annual population growth is expected to slow to 0.2 per cent by 2028, the Conference Board said. Population growth may average 1.1 per cent a year between 2024 and 2028, a much slower pace than in both Toronto and Vancouver.
These relatively weak increases will hamper Montreal’s economic growth, the Conference Board said. Real GDP is seen expanding by about 2.2 per cent a year from 2025 to 2028, short of the national average.
Montreal attracted a record 150,000 international newcomers in 2023, the Conference Board said. Most of those were temporary residents, a group that includes international students, temporary foreign workers and refugees.
Net international migration to the city is expected to dip to 92,000 in 2024 before falling further in subsequent years, according to the Conference Board.
“People like us were somewhat surprised at how high international migration was in the last couple of years,” McIntyre said. “Even 92,000 is relatively high, but it’s a huge pullback from what we saw.”
Housing starts, which probably fell by about one-third in 2023, are set to remain at depressed levels because of persistent workforce shortages.
“One of the issues in the construction industry is the aging population, which is creating this labour scarcity,” McIntyre said. “It’s not a problem that’s going to go away overnight.”
Job growth this year will probably be concentrated in health care and social services, the Conference Board report says. Retail and manufacturing could see cutbacks.
Conditions in the labour market should improve gradually if the Bank of Canada starts cutting interest rates later this year as expected. Over the 2024-28 period, Conference Board economists predict that labour force growth in Montreal will average 0.6 per cent, less than the national average of 1.4 per cent.
As for inflation, which has begun falling, “we should get somewhere near” the central bank’s two per cent target by the end of 2024 or early in 2025, McIntyre says. “We definitely expect that it will continue to fall this year.”