Over the next few decades, Canada's most populous province is headed for middle-of-the-road population growth compared to the rest of the country, according to Statistics Canada's new long-term population projections.

Over the same time frame, Ontario — and the country as a whole — will have to confront challenges presented by its population getting older. The looming issue is one Finance Minister Peter Bethlenfalvy said is most worrisome to him, specifically since it could add more pressure to the health-care system, and deepen labour shortages — in turn hurting economic growth.

Read More: What’s eating Peter Bethlenfalvy?

From 2016 to 2021, Canada's population grew at almost twice the pace of every other G7 country. Over the same period, seniors aged 65 and older came to occupy their largest proportion of Ontario's population in history — breaking the record as 17 per cent of the demographic in 2019, StatCan data show.

StatCan usually releases long-term population projections for Canada and the provinces and territories every five years, but produced its latest version to reflect recent demographic trends, like rising immigration targets and shifts caused by the COVID-19 pandemic. Its release comes ahead of the federal Liberal government's latest update to its three-year immigration targets, which it publishes near the end of October each year. Federal Immigration Minister Sean Fraser has suggested he's interested in raising Canada's targets above 1.3 million over the next three years — the total of its last targets, which increase slightly each year.

The estimates also come while the federal and Ontario governments renegotiate control over immigration. Ontario Labour and Immigration Minister Monte McNaughton is trying to secure the provincial government greater authority over which proportion of immigrants gain entry to the province for economic reasons, as well as which of this class are permitted.

Read More: Changes to Ontario’s control over immigration begin rounding into form

Speaking briefly to QP Briefing at the legislature on Monday, McNaughton said he's "glad" the federal government has projected increased immigration levels year-over-year, but maintained that he's focused on addressing labour market challenges using immigration.

He added that he feels "the greatest economic challenge we have right now is the labour shortages."

"(Ontario) has almost 400,000 jobs going unfilled," added McNaughton, who also acknowledged that Ontario faces a "global race for talent."

'Record tight'

McNaughton's and Bethlenfalvy's concerns about labour shortages are shared by Canadian businesses as well; in the Canadian Survey on Business Conditions earlier this year, businesses viewed labour shortages as their main immediate challenge.

Canada's unemployment rate has been at a record-low this summer, yet provinces, including Ontario, still lack workers in some sectors they're needed most.

With Canada's unemployment-to-job-vacancy ratio falling from 4.4 to 1.4 over the last six years, the country's labour market is in a "record tight" position, as another StatCan report from earlier this year said. Employers are having an increasingly difficult time filling vacancies, including in two sectors Ontario most desperately needs workers: construction and health care.

This problem won't be solved without an influx of new workers, let alone if more are retiring than are entering the workforce.

StatCan's new population projections report notes that "some would like to see an even greater population increase (than Canada is trending toward) to mitigate the consequences of a labour shortage affecting certain sectors of the economy."

"Meanwhile, others stress the impact it will have on infrastructure, particularly in Canada's major cities, or on the availability of housing across the country," it says.

While StatCan's report makes estimates for 10 scenarios — which range from low-growth to high-growth, depending on varying rates of fertility, immigration and life expectancy — Ontario's population projections are among the least volatile.

In most scenarios, StatCan's projections predict that the provinces east of Ontario, excluding Prince Edward Island, will suffer a noticeable decrease in population share, whereas those west of it, excluding British Columbia, will experience an increase in population share.

The report makes estimates for 10 scenarios, ranging from low-growth to high-growth. In all 10, migration is "the main driver" of Canada's population growth, like it has been since the early 1990s. This is partly due to Canada's fertility rate — how many children each woman has — being at a historical low (1.4 in 2020).

This means that, in StatCan's medium-growth scenario, Canada's natural growth rate (births minus deaths) will decrease and eventually become negative in the decade that many baby boomers will die (2049 to 2058). In this same scenario, the proportion of the country's 65-plus population will gradually increase from its already record-high of 18.5 per cent over much of the next half-century.

StatCan's report also says that because of the size of the aging baby boomer and generation X populations, a shift to a more-senior demographic in Canada is inevitable, even if the country experiences more extreme circumstances pushing the population to become younger — like higher fertility, higher immigration and a lower life expectancy.

"While less evident in some projection scenarios ... the aging of the population very much remains a reality, and thus seems to be unavoidable over the next 50 years," StatCan's report says.

Ontario a middling province for long-term population growth: StatCan

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