John Ivison: Carney’s pro-immigration temptation beckons the cobra effect

Federal Liberals could be forgiven a sense of hubris on viewing recent polls that suggest more than half of all voters support their party.

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But they should remember that the balloon can be popped by a single pinprick of reality.

This week’s economic outlook by the parliamentary budget officer contains some unpleasant reading for the government that suggests trouble ahead.

Growth is expected to slow relative to previous reports, and deficits are expected to grow. Ottawa will fail to meet its declining deficit-to-GDP fiscal anchor and public debt charges will rise to $83 billion a year within five years (from an expected $59.3 billion this year).

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The worsening short-term picture is caused by U.S. tariffs, Canadian counter-measures, and higher energy prices. But a recurring drag on economic growth, the report said, is slower population growth.

The answer would appear to be simple: bring in more people.

But immigration is at once a remedy to slow growth and also the potential pinprick that could burst the Liberal balloon.

This is the so-called cobra effect: an attempted solution that might make the problem worse (named after the British Raj policy of paying a bounty for dead cobras that encouraged people to breed them).

There has been a significant negative shift in public opinion on immigration since 2023/24, after the Trudeau government shattered the positive consensus by allowing millions of temporary workers and students into the country after the pandemic.

By November 2025, 47 per cent of Canadians said there were too many immigrants coming into Canada, compared to just 22 per cent who said the same in 2020.

Nearly two in three Canadians now think that immigration puts too much pressure on housing and public services.

The Carney government responded by cutting the number of temporary workers, students and asylum seekers.

The 0.5 per cent increase in the population from July 2025 to July 2026 was the lowest percentage increase since 1915/16 — a significant drop from the 2.8 per cent recorded in the 2023/24 year.

The non-permanent resident share of the population has dropped from 7.2 per cent a year ago to 6.7 per cent and the government aims to reduce it to five per cent.

The permanent resident target was cut from 500,000 for this year under the Trudeau government to 380,000.

But pressure is building to return to more historic norms.

Canada’s fertility rate is low at 1.26 children per woman, and its population is aging, with one in five Canadians now over 65. A construction study by Deloitte suggests another half a million workers will be needed by 2030 than can be provided by the domestic population.

Then there is the added bonus that the increase in the population would fluff Ottawa’s economic data, as newcomers earn and spend money.

These are tempting enticements for a government with an ambitious agenda.

New immigration targets are due in the next two weeks, and Prime Minister Mark Carney has already indicated in an interview with the New York Times that he is thinking about a “controlled increase” in the population. His floundering immigration minister, Lena Diab, told reporters last week that Canada has “taken a step backwards” on immigration and needs people to drive its economic plan.

That will be music to the ears of Alberta Premier Danielle Smith and federal Conservative Leader Pierre Poilievre, both of whom currently have the job security of the average Mexican fruit picker.

Smith will be seeking to blame Ottawa on immigration, after this week’s referendum gave her a mandate to seek increased provincial control and reduce the intake to “more sustainable levels.” Federal efforts to increase targets will likely meet the exaggerated fury of a premier fighting for her political life.

Poilievre said the country cannot afford any increase that would put pressure on home affordability, health care and the labour market.

On Tuesday, he focused on the “deluxe” taxpayer-funded benefits that refugees and asylum claimants can access under the Interim Federal Health Program (IFHP). He was so focused, he used the phrase four times.

He also proposed a “Canada First” immigration policy to contain a system he called “unvetted and out of control.”

When Carney was asked about his immigration plans on Tuesday, he was clearly aware this is a classic shield issue for the Liberals: one on which they are weak (having caused the problem in the first place) and vulnerable.

He emphasized the government recognized the need to “take back control” of the system and pointed to the reduction in asylum seekers, temporary workers and foreign students on his watch.

“Where we go from here needs to be established, in co-operation with the provinces,” he said.

There are legitimate policy reasons for increasing the number of newcomers but until the government can convince Canadians, the cobra effect is likely to bite them politically.

National Post

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