Immigration is not the key
The Ottawa Citizen–Special
Published: Thursday, September 25, 2008
In taking issue with James Bissett's concerns about current immigration policy, many of the assertions made by Anne Golden in an op-ed this week (“We do need many more immigrants,” Sept. 22) are problematic to say the least.
She claims there is no evidence immigration pushes down wages for Canadian workers. But this is hardly consistent with last year's Statistics Canada study which concluded that immigration played a role in the seven-per-cent drop in real weekly wages experienced by workers with more than a university undergraduate degree in Canada between 1980 and 2000.
That study was carried out by Statistics Canada researcher, Abdurrahman Aydemir and Harvard professor of economics, George Borjas, widely regarded as the pre-eminent American expert on immigration and labour markets. It noted that if the labour supply increases by 10 per cent because of immigration, weekly wages will fall by between three per cent and four per cent.
Some of Ms. Golden's statistics are also open to question. Her assertion that, “in 2006, 55 per cent of the principal applicant immigrants to Canada (138,257 persons in all) were admitted under the economic class of immigration” is not, in fact, correct. The figure of 138,257 is the total number admitted in the economic class and, of these, only 57,275 were principal applicants. Immigrants who were fully selected on the basis of their qualifications under the points system (skilled immigrants — principal applicants), moreover, comprised only 17.5 per cent of the 251,643 immigrants admitted in 2006.
Similarly, Ms. Golden's efforts to play down the poverty levels and low earnings of recent immigrants are less than convincing. According to Statistics Canada, the percentage of those who have low incomes after being here for almost two decades is still twice as high as it is among Canadian-born. As for earnings, while immigrants who arrived in the 1970s took 10 years to reach or exceed income levels of people born here, by the end of the 1990s those who had been here for 10 years were still earning less than 80 per cent as much as native born Canadians. The gap, moreover, has continued to widen according to 2006 census data.
Don Drummond, chief economist of the Toronto Dominion Bank, notes that when business leaders tout immigration as the key to Canada's economic success they are doing so on the basis of information at least 25 years out of date.
According to Mr. Drummond, because of their weak economic performance, recent immigrants are “pulling the economy down.” Such a conclusion is entirely consistent with Mr. Bissett's contention that current immigration programs are extremely costly for Canadians rather than beneficial.
Perhaps most dubious of all Ms. Golden's assertions is that immigrants will be even more important to Canada in the coming years. In support of this claim she argues that the Baby Boom generation is now beginning to retire and there will not be enough post-secondary and high-school graduates available to replace them. She goes on to note that by 2011 all of our net labour force growth will be from immigration.
The fact is, however, that our prosperity does not depend on labour force growth or population increases but on sound economic policies that promote continued increases in productivity and effective use of our existing labour force. On the latter point, renowned economist and labour market specialist Prof. Alan G. Green of Queen's University has concluded that Canada now has the educational facilities to meet our domestic needs for skilled workers in all but extreme circumstances and that large inflows of skilled workers from abroad will have the effect of discouraging Canadians from acquiring the skills needed in the labour market.
In the circumstances, we should be concentrating on making the best use of existing manpower resources in the country by upgrading the skills of Canadians, retraining the many thousands who have recently lost their jobs and encouraging new entrants to join the workforce — not on continued mass immigration as proposed by Anne Golden.
Martin Collacott is a senior fellow at the Fraser Institute in Vancouver and former Canadian ambassador in Asia and the Middle East.
Immigration is not the key