The Gain Drain

The gain drain
The conventional wisdom that immigration is an economic boon to Canada isn't holding up under scrutiny

Margret Kopala
The Ottawa Citizen
Published: Saturday, April 12, 2008

Globalization has increased acceptance of a coffee-coloured world and provided endless supplies of skilled and other labour, so what's not to love about mass immigration?

While Canada's opposition parties quibbled over modest measures expediting the arrival of skilled immigrant workers, one answer to that question appeared in a report from the British House of Lords. Stunningly, it concludes that record levels of immigration bring no economic benefits.

The Economic Impact of Immigration argues that immigration addresses neither labour shortages nor problems associated with an aging society. Rather, low paid and young workers are being placed at a disadvantage because of competition from immigrants; worse, strains on public services and Britons being priced out of the housing market risk stoking social tensions.

(PHOTO: An immigration officer awaits passengers at Vancouver International Airport. A large percentage of entrants to Canada come as Family Class immigrants who are poorly suited to a labour market that in any case is not as vast as many believe, writes Margret Kopala.)

According to the Telegraph, the U.K. government welcomed this contribution to its “huge immigration shake-up.”

“It proves we were right to set up the independent Migration Advisory Committee to tell us which workers our new Australian-style points system should keep out or let in,” said Immigration Minister Liam Byrne.

Here in Canada, few noticed the British report or even Britain's “immigration shake-up,” though for similar reasons cracks have been appearing in Canada's immigration portfolio too. Now a small but growing number of academics, former civil servants and diplomats knowledgeable about Canada's complex and inefficient immigration system are speaking out. Martin Collacott and James Bissett have reached conclusions similar to the new thinking on immigration now gripping most western democracies, as did the late Bernard Ostry, while economists and professors emeritus such as Alan Green (Queen's University) and Herbert Grubel (Simon Fraser) are backing them up with far reaching data and analysis. Citizen groups, too, such as Immigration Watch, are organizing to counter the vast stakeholder industry of immigration lawyers, consultants and advocacy groups that has so far monopolized Canada's immigration file. Out West, the Alberta Federation of Labour is squaring the debate with today's labour market realities.

A paper by Herbert Grubel, for instance, blames Canada's poor selection criteria and high rates of immigration for the failure of recent immigrants to achieve incomes comparable to resident Canadians, even though previous immigrants did so within 10 years of arrival. Accordingly, Immigration and the Welfare State in Canada: Growing Conflicts, Constructive Solutions published by the Fraser Institute estimates a cost to Canadian taxpayers of over $18 billion for immigrants who arrived between 1990 and 2002.

To understand Canada's selection criteria, it is helpful to see how the numbers align under Canada's two largest classes of immigrants to Canada: Economic and Family.

In 2002, 23.3 per cent of all Canadian immigrants were principal applicants, that is skilled workers who acquired sufficient points for language, skills, etc., under Canada's selection criteria to gain admission to Canada while their spouses and dependents, who are allowed automatic entry, comprised a further 30.5 per cent. Together, at 53.5 per cent of total immigrants, they made up the bulk of Canada's Economic Immigrants.

Family Class Immigrants, at 28.5 per cent of the total in 2002, are the other dominant set. Consisting of parents and grandparents (9.8 per cent) and “immediate” family members (18.7 per cent), these immigrants must be sponsored. Like parents and grandparents, the myriad cousins, uncles, in-laws, sisters and fiances are then able to sponsor other “immediate” family members, leading to a phenomenon known as “chain” migration — that is, an ad infinitum continuum of family links which may be far removed from the principal applicant who started the chain.

In other words, Family Class immigrants meet no selection criteria. This means they often arrive with no language or job skills and a commensurately diminished capacity for paying taxes and social integration.

The economic success of immigrants is also affected by the rate at which they arrive. Having levelled out at 0.5 per cent of the population or less after the Second World War, it skyrocketed in the 1990s to today's 1 per cent — the highest rate in the world. These high rates, combined with slow economic growth in the 1990s, says Grubel, affected the income of new immigrants and those arriving the previous decade who now had new competition for jobs. It was in this period, too, that the number of ethnic enclaves — defined as “census” regions where at least 30 per cent of the population is of a particular ethnic background — rose to 254 by 2001 from six in 1981.

Despite similar economic conditions during the same period, Australian immigrants fared better than Canada's. Migrants there must fulfill a more stringent set of skills, credentials and language requirements. Australia also denies entrants social benefits for two years and admits a higher proportion of work-age immigrants. Parents of principal applicants, for instance, may enter only if the majority of their independently qualified children already reside in Australia.

Grubel, et al., offer constructive solutions to Canada's immigration quagmire but if economic realities matter, the new thinking on immigration may find its ultimate home among the stewards of today's labour market. After appearing before a Commons standing committee where he opposed employer exploitation of temporary workers, the president of the Alberta Federation of Labour told me how, even in booming Alberta, there is no blanket shortage of labour.

“Overall, the market is tight but absolute shortages exist only in certain sectors. In others, like natural gas, forestry and agriculture, workers are being laid off,” says Gil McGowan.

So why aren't we employing the people who are here, aboriginals for instance? Provincial training programs are what need fixing, he suggests. “Politicians have a cartoon understanding of what is happening in the labour market.”

Margret Kopala's column on western perspectives appears every other week.