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Many Happy Birthdays, Canada!

Christopher Sands

Statistics Canada reported this week that Canada’s population now exceeds 34 million (34,108,800 to be precise). There was a net increase in immigration that accounts for some of the change in population, but the rest came from natural increase. Stable population growth in Canada is good news for the United States.

The Population Reference Bureau estimates that the European Union’s population will grow (holding the current member state composition constant) from roughly 501 million people today to 514 million in 2025 after which it will begin a decline and reach 510 million by 2050. They estimate China will follow a similar trajectory, with a population of 1.338 billion today becoming 1.476 billion in 2025 before starting a decline that will leave China with a still substantial 1.437 billion people in 2050 (at which point India will have taken the title of the world’s most populous country, with an estimated 1.748 billion people). Japan has already begun its population decline, from 127 million people today to 119 million in 2025 and just 95 million in 20250, according to the Population Reference Bureau.

While population is declining elsewhere, the North American market will be growing. The United States is estimated by the Population Reference Bureau to grow from nearly 310 million people today to 351 million in 2025 and 423 million in 2050; Mexico is estimated to grow more slowly from nearly 111 million people today to 123 million in 2025 and 129 million in 2050. The Population Reference Bureau estimate is for the Canadian population to reach roughly 40 million by 2025 and 48.5 million by 2050.

A look at the latest U.S. Department of Commerce trade figures reveals a significant difference among U.S. trade partners: Canadians, Mexicans, and EU residents sell in the United States, but take their earnings and buy a nearly equal value of goods from the United States. For every dollar of Canadian sales in the U.S. market, the U.S. wins 90 cents worth of export sales in Canada; for every dollar of Mexican sales in the U.S. market, Mexico imports 73 cents worth of U.S. goods. These imbalances narrow further when the value of trade in services is added to the equation: the United States had a surplus in service trade with Canada and Mexico of $29.6 billion in 2009. Europe’s trade with the United States has a similar rough balance. For every dollar China exports to the United States, it imports less than 24 cents.

Take the trade data together with the population figures and it is clear that per capita, Canadians and Mexicans are the largest consumers of U.S. exports in the world. This is because Canadian and Mexican consumer like American brands, and trust the quality of U.S. products. Even more importantly, Canadians and Mexicans have a comfort with and cultural affinity for Americans that make it easy and even attractive for them to do business with the United States. The fact that the United States imports so much from both countries suggests that the feeling is mutual: Americans like doing business with Canadian and Mexicans.

This is why the growth of the Canadian population is good news for the United States: more Canadians and Mexicans mean more consumers of U.S. products. And of course, this is a reciprocal relationship, and the growth in the U.S. population is good news for Canadian economic growth as well.

Irvin Studin, editor of Global Brief—an impressive magazine published by the Glendon School of Business at York University—wrote a provocative essay suggesting that Canada might aspire to a population of 100 million people through an aggressive campaign to attract immigrants to help to match the promise of Canada’s geography and resource wealth. This is a bullish thought, and although it seems far-fetched today, Americans ought to salute the ambition as in the U.S. national interest since in Canada, such population growth is certainly sustainable.

For now, I am happy enough to raise a glass to toast the birth of the 34,108,800th new Canadian, and wish Canada many happy birthdays to come!

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