A new report from BMO Nesbitt Burns says that yesterday’s release of the 2001 Canadian census data, reveals a dramatic demographic advantage for the United. over Canada, that will further economic integration over time.

“It helps to explain fundamental disparities in the coming consumer and housing markets and the outlook for long-run potential growth,” it says, noting that Canada’s population growth has slowed markedly relative to the U.S. Canada’s population grew by only 4% since the 1996 census, and for the first time in a century Canada is growing more slowly than the U.S.

The data suggests that the growth of the labour force in the U.S. over the next decade will be nearly 1%, compared to 0.5% in Canada, unchanged in the U.K., 0.3% in France, -0.1% in Germany and -0.3% in Italy and Japan. “This has tremendous import for the long-term potential growth rate of the U.S. relative to the rest of the G-7, particularly so given the relative outperformance of labour productivity in the United States.”

“The massive U.S. immigration force is also upwardly mobile, which will contribute importantly to growth in the future. In the workplace, immigrants expand the labour pool at both ends of the knowledge spectrum – the highly skilled and the unskilled. They are among the best- and the worst-educated, over-represented relative to the population as a whole in the proportion with graduate degrees and the proportion with less than a high-school education,” it says.

In Canada, there are 10 million Boomers matched in size by 10 million people under the age of 25. In the U.S., 76 million American Boomers compare to 96 million people under the age of 25. “Moreover, there are a whopping 19 million young Americans between the ages of 20 and 25, on the precipice of career development and household formation. Those years when the purchases of consumer durable goods and ultimately housing will take off,” it notes.

BMO says that these trends suggest that the U.S. consumer market will continue to be the strongest in the G-7. “In Canada, on the other hand, the general consumer trends will languish barring a massive increase in immigration or a dramatic shift in domestic fertility rates, neither of which is likely,” it concludes. “In consequence, growth prospects for Canadian companies are brightest in the U.S. Capital and goods and services will continue to flow in that direction. The Canadian economy will benefit from further economic integration. Indeed, the integration is inevitable.”