From Immigration to AI: Reimagining North American Growth Part 1

Intro:

Canada’s strategic investment in U.S. companies to boost growth in the economy through features such as increasing housing construction, spurred by tariffs and declining immigration, is creating a complex situation with significant implications for the United States and Canada. Driven by a desire to offset declining birth rates and workforce shortages, Canada’s approach, coupled with the rise of AI driven labor displacement and international security concerns, is accelerating a shift away from traditional immigration policies. This convergence of factors with tariffs, AI, and Canada’s economic intervention is triggering a downward spiral in housing prices, exacerbating income inequality, and prompting a reevaluation of growth strategies, mirroring South Korea’s approach to prioritize technological advancements and national security.

Article:

Since tariffs began in April, there’s been an increase in new housing construction. Canada has the lowest tariffs with the USA, out of any country globally. Canada utilizes taxpayer money to fund Canadian firms that hire U.S. companies for new construction. This leads to increased U.S. ownership of Canadian property and businesses, quietly transforming Canada into a 51st state through economic involvement and Canadian taxpayer/government funding.

The past decade or so of immigration caused housing demand and prices to increase. The reason for immigration was because the Canadian birth rate was declining and fewer people entered the workforce; those who did primarily competed for high-skill jobs, which were scarce due to competition, Canadian regulations and taxes that made it difficult to do business in Canada compared to the neighboring United States. Immigration was intended to fill the low-skill jobs that graduates were uninterested in and others outright avoided due to the low wages not compensating for costs of living in cities like Toronto. The lack of growth and entrance of new business in Canada due to regulations and policies combined with government spending contributes to a declining economy where middle-lower classes experience rising inflation and little growth in wages. As a result, only established large corporations and businesses continue to operate and grow profits steadily, but not at a large enough rate to keep pace with rising inflation for most of their current and new workers that have entry level roles or dreams and aspirations of climbing a corporate ladder. Even people in executive roles and upper classes holding roles near the top of corporate ladders are seeing that the rate of growth is much slower than the rate of inflation and are prioritizing keeping their current positions over risking entering the job market again for new roles since the risk of lower wages is so high with less money flowing in the economy. As a result layoffs are widespread to help companies retain more capital.

Now, with anti-immigration policies there is less demand for living. All the places built or to be built for the growing immigration are realizing that the demand is over. Construction projects are getting canceled everywhere. People who took out retirement funds and bought a condo downtown in a city are stuck with unfavorable rates and nobody to pay them rent to cover their expenses. Simultaneously, demand is dropping due to tariffs and Canada’s solution to lower tarrifs with the US to increase supply with US companies is doubling the downward trend effects we see in housing prices.

The shift in attitudes toward immigration is driven by the potential for significant capital profits generated by artificial intelligence and automation. As AI software replaces human labor, companies capture revenue that would have previously been earned by workers. This reduces the demand for living near traditional workplaces and city centers, as the need for high wages and jobs diminishes.

This creates a skewed distribution of wealth exacerbating income inequality creating a “k-shaped” bifurcation where the middle and lower classes decline while the upper classes profit through AI-enhanced products, effectively capturing the labor capital of others. Canada’s focus on affordable modular housing aligns with companies canceling large downtown condo builds. The displacement of human wages by AI companies increases demand for affordable housing. Simultaneously, increased housing supply and wage losses contribute to a downward trend in house prices, particularly in urban areas. We anticipate a bifurcation of housing market prices, with rent remaining volatile and higher than purchase costs due to individual landlord reluctance to accept losses as their capital diminishes through the same effects mentioned above, while properties with land and space, access to water and resources may exhibit greater stability or growth.

Investments in AI companies are growing while other assets that were previously seen as stable and safe, including bonds and the dollar, struggle due to uncertainty and increased government spending, alongside unemployment and inflation data. This situation requires AI and automation to demonstrably improve company products and restore the United States’ global superpower status. Simultaneously, heightened national security concerns necessitate advancements in AI and robotics, as other countries, including adversaries, possess comparable technology. The interplay of national security, economic shifts, and evolving standards of living is occurring concurrently. The focus on filling low skills jobs with immigration as a solution to support the economy was a great mistake. Now were seeing governments play catch up by emptying their money tanks of taxpayer money on the buildout of this new economy where they're funding AI and automation to take up these low skill jobs and support the economy while making money through investments in these pioneering organizations.

South Korea’s current trajectory serves as a blueprint: prioritizing technological advancements and robust security measures. As they’ve done, significant investments are directed towards AI and robotics, driven by national security concerns with North Korea being a long time threat they've had to deal with. This now mirrors the situation in the United States, where a focus on immigration as a solution has been superseded by the urgent need to catch up technologically with adversaries and reclaim the global superpower status. Like South Korea, the U.S. is now confronting a reality where innovation and technological dominance are paramount, acknowledging a shift away from previous approaches – a necessary correction to avoid falling behind.

This model may represent a potential trajectory for Western societies experiencing managed decline that could then lead to a rejuvenation, often referred to as the 4^th turning.