Effects of immigration on interregional population flows in Canada

The purpose of this article is to investigate one possible mechanism by which the Canadian labour markets adjust to immigration. Despite the fact that Canada is one of the major immigrant receiving countries in the world, most studies that look across Canadian local markets have found immigration’s effects to be weak. The well-known argument is that rising immigration levels in an area may result in the out-migration of an area’s residents if the immigrants displace the local workers in employment, bid down wages, or cause housing prices to rise through increased demand for shelter. The present study investigates this bias by estimating the mobility responses of local residents to immigrant inflows based on a spatial equilibrium model for 28 census metropolitan areas (CMA) from 2000 to 2009. The results show that immigration has a significant displacement effect between CMAs.