A series of rapid policy changes aimed at reducing the temporary resident population in Canada could lead to an overall shrinking of the labour force and a potential economic slowdown, economists predict.

"A new report from Bank of Nova Scotia says that Ottawa could be “over-correcting” in its attempt to rein in the number of temporary residents in the country, which topped three million people for the first time this July, or 7.3 per cent of the total population."

Scotiabank report suggests that if Canada were to meet its temporary resident target (5%) by 2027, the size of the labour force could decrease by 200,000 people, given the high number of temporary workers that are part of the work force.

“Dealing with a sudden drop in the number of workers could pose a substantial challenge to businesses,”

Some economists however believe - “It will encourage businesses to invest in technology that will boost productivity and not just rely on cheap and easily accessible foreign labour. That’s what we should want for Canada.”