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Economic impact of immigration to Canada

February 16, 2024

The economic impact of immigration is an important topic in Canada. Two conflicting narratives exist: 1) higher immigration levels help to increase economy (GDP)[1][2] and 2) higher immigration levels decreases GDP per capita or living standards for the resident population[3][4][5] and leads to diseconomies of scale in terms of overcrowding of hospitals, schools and recreational facilities, deteriorating environment, increase in cost of services, increase in cost of housing, etc.[6] A commonly supported argument is that impact on GDP is not an effective metric for immigration.[7][8] Another narrative for immigration is replacement of the ageing workforce.[9] However, economists note that increasing immigration rates is not an effective strategy to counter this entirely.[10][11] Policy Options found that mass immigration has a null effect on GDP.[12] Increased immigration numbers and the associated soaring housing prices has significantly contributed to the rise of inflation in 2021 to the highest in 18 years.[13][14][15]

Canada is one of the top Western countries that accepts most immigrants per capita[16] and was ranking 9th in 2015 in terms of immigrants as a percent of the population among western countries while Liechtenstein ranked first.[17][better source needed] The per capita immigration rate to Canada has been relatively constant since the 1950s, and in the first and second decades of 21st century there was a steady increase in the education and skill level of immigrants to Canada due to the focus on higher average productivity based applicants and thus immigrants to Canada on average were better educated than Canadians.[18][19] This trend was enhanced for income redistribution in the third decade of the 21st century by opening low-skilled immigrant pathways that only required minimal scores for immigration to achieve target of 400,000 immigrants per year and have cemented a new narrative on immigration; immigration is to fill low-skilled jobs and alleviate competitive labour market pressures faced by businesses that use cheap labour.[20][21][22] From 2022 onward, Trudeau government has set aggressive immigration targets per Century Initiative's lobbying, over a million in 2022, in 2023 it was 465,000, 485,000 in 2024, and it is 500,000 in 2025.[23][24][25] Across Canada, people have been asking the government to match affordable housing to the set immigration levels, while the government annually welcomes 500,000 new permanent residents, and more than 800,000 foreign nationals into the country on study visas, as asylum seekers, and on temporary work visas.[26] An award-winning Canadian journalist revealed the poor preparedness for receiving immigrants in swathes, aligning with Canada's historic need for a "servant class" and "cheap labor" for the bourgeoisie and owning class. Furthermore, the journalist observed that the policy of inaction in neutralizing social and professional barriers for immigrants signals that Canada is not as welcoming as it purports to be and thus silently supports the creation of such a socioeconomic class in the great mosaic. As a part of the process, by default, the government systematically forces a majority of immigrants into vulnerable positions and economic disenfranchisement.[27][28]

An article by an ex-policy maker states that Canada is rooting for the low-wage-low-productivity model of competitiveness that it has been locked in from the mid-1980s with this aggressive immigration targets. A problematic approach per Paul Krugman in long term, he considers throwing more cheap labour at problems without a significant increase in productivity will affect a country's ability to improve its standard of living over time.[29] The article further observes that it is imperative that Canada and the "government for the people" require a fundamental re-commitment to pre-1970s dominating national objective and efforts for a steady improvement in raising the living standard of Canadians by embracing the supply and demand concept of labour economics, and improving the economic efficiency of the system.[30] A former director from Quebec's Ministry of Immigration observed that the government needs to treat people better.[31]

Overview edit

Immigration to Canada edit

Main article: Immigration to Canada

According to the CIA's World Factbook (2017), Canada has one of the highest migration rates in the world.[32] Canada is also unusual among western nations in the widespread popular support for high rates of immigration, and a 2007 study showed support for immigration has increased in Canada.[33] Canada's immigration policy, which focuses on selecting immigrants based on their skills and qualifications to meet labor market demands, as well as supporting irregular immigrants in need, reinforces the public perception that immigrants are making a positive contribution to the economy and that the system preserves human dignity. However, assessing the economic effectiveness of the immigration policy is challenging due to the complex interplay of capitalist dynamics, societal influences, and political factors on the lives of immigrants.[34] In 2022, Bank of Canada Governor Tiff Macklem gave insider advice to businesses to suppress wages across the board by not incorporating higher wages into contracts with employees for undermining collective bargaining power in long-term, citing a surplus of motivated workforce available from immigrant sources.[35][36]

In 2023, a Statistics Canada report revealed that the notion of a widespread labor shortage in Canada is no longer substantial. The report found that jobs requiring higher education consistently had fewer available positions, and highlighted that the hiring challenges for positions requiring post-secondary education are not due to a lack of qualified workers, but because of mismatch in skills that could be solved with ongoing training and deflated entry requirements, and inadequate wages that could be fortified with desirable benefits or competitive wages. The report also raised doubts about the hiring difficulties faced by firms trying to recruit workers with lower levels of education. It raised questions whether these job vacancies are solely a result of labor shortages in specific low-skilled occupations that might demand higher wages or if factors such as greater negotiating power and profit maximization that the low-skilled industries enjoy play a significant role. According to Jim Stanford, an economist and the director of the Centre for Future Work, the goal of immigration policy should not be solely focused on solving recruitment problems for low-wage employers or any employers, but rather on broader considerations that benefit the country and it's people as a whole.[37][38]

Economic rationale for immigration edit

 
Donald Alexander Smith, a migrant from Scotland, drives the Last Spike. Migrants to Canada at that time were British subjects (not Canadian citizens).

There is no agreed view on the net impact of immigration in current times. Historically, Canada's unusually high immigration rates can be traced to the nation's unique economy. Another factor is that Canada has one of the world's largest supplies of natural resources such as oil, metals, and lumber. It also has a sparse population spread over a vast landscape. Canada has thus faced acute labour shortages and has responded by actively searching for immigrants.[39] In the late 19th century this included bringing Chinese migrants to build the Canadian Pacific Railway and actively advertising in Europe to find farmers with the Last Best West campaign. Today similar recruitment efforts are needed to staff the oil sands projects in Alberta.[40]

 
Toronto's Jewish market in 1924. In that era the Jewish community, largely composed of recent immigrants, was concentrated in the impoverished area known as The Ward.

Another factor that contributes to the immigration question is Canada's low birth rate (10.3 births per 1000 people).[41] The theory is that new residents can assist in meeting future government obligations relating to pay-as-you-go liabilities.

The economic dangers of population decline are not universally accepted. Organizations like the Fraser Institute question whether a declining population would reduce or increase per capita income, noting that in the short term, with a stable economy, fewer people would increase the per capita income simply because you divide the income among fewer people. This would increase per-head consumption and create a climate of economic wellbeing that could nurture pro-family values and policies which can increase Canada's birth rate.[42][43][44] A study by the C. D. Howe Institute suggests that immigration cannot keep Canada's population young and could possibly contribute to population ageing in the near term.[45] Employment statistics have also brought into question whether skilled worker immigrants, with a 34% unemployment rate in 2001,[46] are successfully meeting existing labour market needs in Canada. However, data from the 2020 Labor Force Survey has shown a 9.5% unemployment rate among landed immigrants.[47][48] Many developed nations have much lower fertility rates than Canada but have not embraced immigration.[citation needed]

The first detailed analysis of Canadian immigration policy came from the Economic Council of Canada; it called for immigration to be increased to eventually bring Canada's population to 100 million. While it found that the economic benefits to Canada of immigration were fairly small, noting that "a historical perspective gives little or no support to the view that immigration is needed for national prosperity," it also concluded that the benefits to the newcomers themselves were extremely large. The report concluded that "it would be hard not to recommend an increase when immigrants can gain so much and Canadians not only do not lose but actually make slight economic gains."[49][50] Economists later conducted a series of studies using large amounts of census data (844,476 individuals) and found out that immigrants who arrived from 1987 to 2004 paid only 57% of the taxes paid by average Canadian in 2006, with the effect that taxes from immigrants do not exceed the government expenses relating to them (a gap of $23 billion annually according to their numbers).[51]

Racialization and its Economic Impact edit

Recent immigrants are far more likely than native-born Canadians to have low incomes initially, due to differences in culture, difficulties due to English being their second language, discrimination, and racialization.[52][53] The employment equity policy prescriptions are not translated into programs that help immigrants to participate in the economy on an equal footing with other Canadians in a hostile labor market.[54] There are no government incentive programs that would encourage organizations to hire educationally qualified immigrants for positions in which they are fit for work but lack certain aspects like social privilege, economic security, etc.[55] All of which, a native-born Canadian initially would have to get into a workplace.[clarification needed] A 2006 Canadian government report shows that 22 percent of racialized persons lived in poverty compared to 9 percent of non-racialized persons, and in major cities more than half of the people living in poverty were those who were racialized, and the comparative poverty rate was growing.[56] Later, in a 2019 study, it was found that the rate of poverty amongst recent immigrants is 2.4 times higher than that of native-born Canadians, and this was identified as an ever-widening trend.[57] In certain cities there are active local immigration partnerships that aid immigrants in getting jobs, however a network of community based wraparound services through existing community organization's are not available.[58][better source needed] A 2001 study found successful interpellation is possible if young people are considered for immigration, the study found a positive correlation between age and earnings for immigrants with acculturation effect, and the study observed it in immigrants who were visible minorities or whose mother tongue was not English.[59] A 2003 study found that with then lack of support systems that can directly address socioeconomic problems of immigrants in a racialised society, and related lack of qualitative job accessibility, it would take more than 20 years of Canadian experience to achieve any positive economic gains.[60] Established studies show educational achievement and rewriting policies to recognise education is critical for gaining higher incomes for overcoming the poverty trap and achieving poverty reduction. On an intergenerational level, if parents can avoid poverty, so will their children.[61] In Canada's case, with its high-skilled immigration model, it's partly about being insulated from racialization at various levels.

Immigrant wellbeing edit

Education levels edit

The Canadian system puts great emphasis on finding skilled immigrants.[62] Immigrants to Canada are more skilled than immigrants to the United States. George J. Borjas compared immigrants to Canada and the United States finding those to Canada being better educated and receiving higher wages once settled. He accredits this to Canadian neoliberal economy.

Within the Canadian economy, immigrants are mostly found at the highest education levels. In Canada, 38% of male workers with a post-graduate degree are immigrants to the country,[63] and while 23% of Canadians are foreign-born, they comprise 49% of doctorate holders.[64] A persistent problem for skilled immigrants is the recognition of foreign credentials. Data from Statistics Canada reports that only 72.2% of new immigrants (landed within 5 years) between the ages of 25 and 54 that possess a university degree are employed.[65] While Canada recruits people to come based on their degrees, many newcomers arrive to find employers and professional organizations not recognizing their foreign education.[66] As the percentage of skilled newcomers as a share of total migrants has increased, so has this problem. A study done by the IZA Journal of Development and Migration, found that between 1991 and 2006, Canadian-educated immigrants and Foreign-educated immigrants, found that Canadian-educated immigrants who graduated from university had a large earnings gap with their Canadian-born counterparts both in the initial years after immigration and in the long run.[67] It was speculated that this outcome was likely due to lack of Canadian work experience and deficiencies in their social networks and language abilities.[67]

The setting of standards for, or recognition of, almost all professional credentials does not fall within the federal government's control and are therefore not determined by either federal laws or Citizenship and Immigration Canada policies,[68] but Citizenship and Immigration Canada established the Foreign Credentials Referral Office to provide something like a directory assistance service for immigrants.[69] The Government of Ontario enacted the Fair Access to Regulated Professions Act, 2006 to help immigrants qualify for 34 provincially regulated professions.[70] The Act also established the position of Fairness Commissioner in the province. In 2007, the Government of Alberta signed an agreement with federal government that will accelerate the process of foreign credential recognition for new immigrants by licensing bodies in that province.[71] Other provinces have made similar commitments.

Decline in economic well-being edit

Over the last 25 years the economic position of newcomers to Canada relative to the native population has steadily declined. A number of hypotheses have been advanced to explain these issues.

  1. The selection process is flawed;[51]
  2. Government and corporate policies deliberately shift immigrants to secondary sector occupations. These are jobs characterized by high instability, hazardous work environments, and low pay. Inherently those involved in these sectors will have lower wages and more periods of unemployment. In several European countries the immigration system is almost fully designed to try to fill these positions. This is less the case in Canada, but significant recruitment programs for sectors such as agriculture and oil and gas recruit many workers to perilous jobs.[72]
  3. Newer immigrants from outside of Europe are victims of racial discrimination.[73]
  4. Canada's social programs create incentives that conflict with the employment objective;[51] and/or
  5. Increased job competition among even native-born Canadians has increased the importance of relying on networking to access the "hidden market," putting immigrants at a disadvantage given their lack of deep and broad networks.[74]

A January 2007 study by Statistics Canada analyzed the drop in income of economic immigrants from several perspectives.[75] Economic immigrants are now more likely to begin their stay in Canada with a "low-income" (less than 50% of the median income) than an immigrant in any of the other immigration classes (see Table 16 in the study). This drop occurred during the 1990s and early 2000s despite the percentage of immigrants arriving with degrees in the economic class (including principal applicants, spouses, and dependents) rising from 29% in 1992 to 56% in 2003.

Stating an intention to reduce a backlog of immigration applicants of all classes, and to better target the required skills needed in Canada, the federal government passed a law in 2008 that gave the immigration minister new powers to alter immigrant selection. Many expected that these powers would be used to favour workers in skilled trades over immigrants selected on the basis of education through the points system.[76]

While the well-being of immigrants has declined in recent years, this has not affected second-generation immigrants, or those who came to Canada as a child. This group is one of the most successful in Canada, with education and earning levels well above that of their parents and also above the Canadian average.[77]

COVID-19 edit

In 2020, the Canadian government has planned to support economic recovery through increased immigration adding further strain to the socioeconomic system [78] while other countries like New Zealand had a different COVID-19 recovery immigration strategy.[79] The official Canadian government website quotes "Immigrants contribute to our economy, not only by filling gaps in our labour force and paying taxes, but also by spending money on goods, housing and transportation."[80] However, the same is true with citizens and other capitalistic countries who also use young and changing temporary foreign workforce for achieving its economic needs and driving down wages.[81] In pre-pandemic period the notion for aggressive immigration was to increase the tax base for supporting a growing number of Canadian seniors through old age security and GIS. During the pandemic, it was re-framed as a "secret weapon to supercharge the country’s economic recovery."[82] Stephen Punwasi, co-founder of the data journalism website Better Dwelling, evaluates Canadian immigration plans are becoming a snow job and predatory in nature,[82] though Canadian liberal populism vehemently rejects the notion of needing modern slaves and intends to promote temporary workforce into permanent residents while lamenting the need of workforce in categories where majority of temporary workforce are employed.[83] As a part of aggressively achieving Century Initiatives goal, some never-before-seen immigration changes were made in 2021 to expand pathways to permanent residency for international students and temporary foreign workers. These changes included lowering scores, considering the passing of an academic program, removing English and French language proficiency test result requirement, and eliminating work experience requirement, this solidified the notion that getting a study permit is an unofficially recognized pathway for getting Canadian residency, some considered this to be cracks in the immigration system, as a backdoor to residency, and others as a convoluted pathway for migrant justice. More such changes were underway in 2022.[84][83] However, these changes and promotions were heavily critiqued, stating it would increase worker mobility from low-wage sectors to sectors with better pay, and the temporary workforce in odious sectors will be unwilling to work in low wages and unappealing working conditions as Canadian workforce are (and it was evident from the 74% increase in job vacancies in the sector after the first TR to PR scheme) or it could change employer behaviors and the currently suffering category without temporary workforce will even suffer more.[85][86] During the pandemic from grassroot level investigation's in the refugees category it was found out that most refugees are ending up "on the street," and critiques recommend that Canada should not accept more refugees without proper systems that can ensure their welfare.[87] The pandemic tagline for immigration was strongly promoted through other governmental stakeholders as well. Pedro Antunes, Chief Economist at Conference Board of Canada, based on forecasts stated that "Immigration continues to be an important driver of Canada’s social and economic well-being, especially as we recover from the COVID-19 pandemic."[88] As a part of this liberal vision in 2022 the government lifted off 20 hours work limit for international students and gave employers more supply of labour at an external cost (negative) for majority of the resident population.[89][90] Another government impact assessment stated that "high immigration levels have been recognized by the Bank of Canada as net benefit for the economy, driving labour force growth, consumption and housing activity." This was when Canada intensively started to face heightened housing crisis due to unplanned affordable housing development, and looming questions like whether low-skilled workers should be integrated completely or could they be brought in seasonally like many other countries do are present.[91][92][93] Focussing on immigration as a solution towards generating tax revenue and filling up unwanted jobs was considered to be flogging a dead horse due to the meager amount in returns, lack of innovation, lack of infrastructure for training required citizen workforce, lack of inclusivity for training resident population through subsidies, bottlenecking of admissions to in-need and emerging professional programs, adversely the population effect that increased immigration levels affect negatively on the per capita public transfer to a citizen, the withheld taxes from actual income due to not engaging in formal economy, regulatory bindings that force immigrant workforce into complementary job statuses and resulting waste of human capital, underemployment and mismatched jobs (horizontal and vertical), etc.[94][95] Another study stated that in 2019-2020 about $785M (outside Quebec) were funded to more than 500 third-party settlement service provider organizations across Canada. However, list of these third-party settlement providers, their active status, and their service achievements are not available for public access. They state the increased immigration could increase investment and improvements in labour market integration process of immigrants itself like addressing underemployment, language training (while the immigration program already has a standardized test result submission to qualify for immigration), and improving foreign credential recognition (which already exists and is a part of the immigration application). In 2023, post-pandemic, Canada continued to increase immigration levels set by consultants to account for 1.08% of Canada’s population with a new immigration tagline that immigrants will and continue to address Canada's critical housing development needs while cities were struggling with lack of infrastructure to hold current temporary residents, new permanent residents, and new citizens.[96][97][98]

Long-term outcomes edit

One of the most important studies of the economic impact of immigration to Canada is Morton Beiser's Strangers at the Gate. This study looked at the arrival of the Vietnamese boat people who began to arrive in Canada in 1979 to much controversy. The total number of refugees was 60,000, the largest single group of refugees to ever arrive in Canada. Beiser first studied the boat people upon their arrival, finding that few spoke English or French, that most were farmers with few skills useful in Canada, and that they had arrived with no assets with which to establish themselves. Beiser then followed the progress of the boat people to see what effect they would have on Canada. Within ten years of arrival the boat people had an unemployment rate 2.3% lower than the Canadian average. One in five had started a business, 99% had successfully applied to become Canadian citizens, and they were considerably less likely than average to receive some form of social assistance.[99][100]

Immigrant employment and income edit

Employment edit

Unemployment tends to be very high for recent immigrants, compared to more established immigrants (lived in Canada between 5 and 10 years). Established immigrants tend to have an unemployment rate closer to the national unemployment rate of native-born citizens. In 2011, the unemployment rate of recently arrived immigrants was 13.6%, considerably above the native Canadian average of 5.5%. For more established immigrants, the rate fell to 8.2%[101]

2011 labour market outcomes of immigrants aged 25 to 54, by period of landing[102]
Labour force New Immigrants (landed within 5 years) Established Immigrants (landed more than 5 to 10 years) Native-born Canadians
Participation rate 73.5% 80.7% 87.8%
Employment rate[i] 63.5% 74.1% 82.9%
Unemployment rate 13.6% 8.2% 5.5%

Income edit

Higher rates of unemployment and lower wages combine to give newcomers less income than the Canadian average. An analysis of Longitudinal Immigration Database by Statistics Canada showed that immigrants who landed in 2014, had a median income of $24,000 in 2015, compared to an income of $36,000 for native-born Canadians. The median income for new immigrants in 2015 was the highest ever recorded and $2,000 more than the median income of new immigrants in 2013.[103] In previous decades, immigrant income levels did rise to the national average after 10 years, but in recent years the situation has deteriorated. A 2003 study published by Statistics Canada noted that "in 1980 recent immigrants had low-income rates 1.4 times that of Canadian born, by 2000 they were 2.5 times higher, at 35.8%."[104] The study noted that the deterioration was widespread and affected most types of immigrants. The 2003 study explains that the low-income rate among non-immigrants declined in the 1990s, but this was more than offset by the income profile of new immigrants, resulting in a net rise in Canada's total low-income rate. An updated January 2007 study by Statistics Canada, explains that the deterioration continued into the next decade, with the low-income rate of recent immigrants reaching rates of 3.5 times that of Canadian born in 2002 and 2003, before edging back to 3.2 times in 2004.[75] The 2007 study explains that this deterioration has occurred even though Canada implemented changes in 1993 to encourage more highly educated immigrants, with 45% of new immigrants having university degrees as of 2004.

In 1991, the Economic Council of Canada found that periods of immigration were not directly linked to periods of high growth. They noted that "a historical perspective gives little or no support to the view that immigration is needed for economic prosperity. In the 19th and early 20th centuries, the fastest growth in per capita real incomes occurred at times when net immigration was nil or negative. Later in the 20th century, the opposite linkage is seen but, clearly, there is no long-term correlation." However, the same report found that a high rate of immigration was good for Canada's future, and recommended expanding immigration rates to bring Canada's population to 100 million.[49] A University of Montreal study published in 2002 by professor Marc Termote used different methods and studied different countries and concluded that immigration has no statistically significant impact to the per capita income of a country.[105]

Wages edit

In terms of the impact of immigration worldwide, Statistics Canada estimates that for every 10% increase in the population from immigration, wages in Canada are now reduced by 4% on average (with the greatest impact to more skilled workers, such as workers with post-graduate degrees whose wages are reduced by 7%).[106]

In part because of the credential issue, many immigrants are forced to find work below their education level and at lower wages. However, even for doing work of the same skill level, immigrants are much less well compensated than their native born counterparts. Immigration scholar Jeffrey Reitz calculated that in 2001 native Canadian employers were benefiting from, and immigrant employees were losing out on, between $2 and 3 billion per year due to this imbalance.[107] A study published by Statistics Canada reviewed data from 1991 to 2010 regarding the convergence of wages between immigrants and native-born Canadians. The study found that there was a convergence of relative earnings for immigrants. Immigrant men's average annual wages were 86% of those of native-born men in 2010, up from 76% in 1991.[108]

There are a number of possible explanations for why newcomers earn less than native Canadians in the same jobs with the same skills. Lower hourly wages might be an indication that the labour productivity of immigrants is lower, and employers thus have reason to pay them less. New workers are also less familiar with the Canadian labour market and will thus not be able to maximize their salaries. Employers will also be less familiar with an immigrant's background and thus less willing to offer the same salary as to a native.[109] Due to lower mobility, they do not access better-paying jobs, such as in Alberta and Saskatchewan. This has been changing with Calgary already surpassing Montreal in terms of percentage of visible minorities. Visible minorities in Saskatchewan earn higher wages than native-born Canadians.

Wider effects edit

 
Signs in Toronto's Chinatown, one of a large collection of neighbourhoods in Canada featuring businesses that are run by, and often cater to, recent immigrants.

Government and social assistance edit

The government has a large department and a number of programs to try to ensure the well-being of immigrants to Canada, and ameliorate their economic condition. Immigration, Refugees and Citizenship Canada (IRCC) employs 5,000 staff,[110] which on a per capita basis is 3 times more than the 15,000 U.S. Citizenship and Immigration Services employees. IRCC recoups some of its department costs through landing fees. In 2006, the Canadian government reduced the landing fee per immigrant by 50%.[111] The Parliamentary Budget Officer has reported that irregular migration, from the initial entry into Canada to the final decision from the Immigration and Refugee Board and/or Federal Court, as well as any deportations, cost the federal government $340 million in 2017–18, and is projected to rise to $396 million in 2019–20.[112]

New immigrants are also entitled to settlement assistance such as free language training under provincial government administered programs usually called Language Instruction for Newcomers to Canada (LINC), for which the federal government budgeted about $350 million to give to the provinces for the fiscal year 2006–2007.[113] The majority of the $350 million was allocated to Quebec under the Canada-Quebec Accord, at $196 million per year,[114] even though immigration to Quebec represented only 16.5% of all immigration to Canada in 2005.[115] The $350 million is budgeted to increase by an additional $90 million by 2009.[116] Provincial governments in Canada have established citizenship and immigration departments, such as Ontario's Ministry of Citizenship, Immigration and International Trade.

Support for immigrants was also one of the key issues that formed the basis of the New Deal for Cities between Toronto (and other urban centres), the Government of Ontario, and the Government of Canada,[117] because 43% of new immigrants settle in the Greater Toronto Area resulting in certain challenges for that region.[118][119] A paper published by Statistics Canada noted that "Over the 1990s (1990 to 2000) the city's low-income rate rose 1.9 percentage points. All of this increase was associated with deteriorating outcomes among immigrants, which tended to increase the city's low-income rate by 2.8 percentage points."[104] In other words, the low-income rate among non-immigrants fell, but the income profile of new immigrants resulted in a net widening of the income inequality gap in Toronto during the 1990s.

The needs of immigrants prompted the United Way of Greater Toronto, the largest United Way charity in Canada, to identify immigration services in Toronto as a top priority for their $100 million 2006 campaign to combat poverty and social exclusion.[120] In 2006, the Daily Bread Food Bank in Toronto reported that over 40% of its clients are foreign-born, and that almost half of that group had been in the country for less than 4 years.[121] While the less than 4-year group shows far above average need, the over 40% figure is in line with the general population as 44% of Torontonians are foreign-born.[122]

Government finances edit

There is no consensus on the net impact of immigration to government finances. A 1990 study found that an average immigrant household paid $22,528 in all forms of taxes and on average each household directly consumed $10,558 in government services. By contrast an average native Canadian household paid $20,259 in tax and consumed $10,102 dollars in services. Across the country this means that immigrant households contributed $2.6 billion more than their share to the public purse.[123] A 1996 study found that over a lifetime a typical immigrant family will pay some forty thousand dollars more to the treasury than they will consume in services.[124] Explanations for this include that immigrant households tend to be larger, and have more wage earners, increasing taxes. Newcomers are also less likely to make use of many social services. Immigrants are less likely than native Canadians to receive employment insurance, social assistance, and subsidized housing.[125] Immigrants are usually less prone to homelessness due to the support they receive from their families and communities.[126] Recent immigrants are also less likely to make use of subsidized housing than native Canadians of the same income level. In 2004 22.5% of low-income native Canadians lived in subsidized housing, but only 20.4% of low income recent immigrants did so, though this number was considerably higher among more established immigrants.[127] Results from a study from the Fraser Institute found that the immigrants who arrived between 1987 and 2004 cost governments $23 billion per annum (as of 2006) in excess of taxes raised from those immigrants, relating to universal social services (e.g., welfare, medicare, public education).[51]

International trade edit

Organizations that facilitate Canada's international trade system include the Department of Foreign Affairs, Trade and Development (publicly known as Global Affairs Canada); the Trade Controls Bureau, which operates under the Minister of Foreign Affairs; the Canada Border Services Agency (CBSA); and the Canadian International Trade Tribunal, which is an independent quasi-judicial body.[128]

The presence within Canada of people representative of many different cultures and nations has also been an important boost to Canada's international trade. Immigrants will often have the expertise, linguistic skills, personal connections with their country of origin that can help forge international trade ties. Studies have found that Canada does have greater trade relations with those nations that have provided large numbers of immigrants.[129] Canada's economy is heavily centered on international trade, which accounted for 31.4% of GDP in 2017;[130] although, most international trade is with the United States. In 2017, 76.4% of Canadian exports went to the United States.[130]

This has been a common narrative about source countries of immigrants to Canada. For many years, expanded markets for trade has been a common rationale and justification for high immigration from the developing world. Data from Statistics Canada in 2017 reveals that the trade balances with developing countries from which Canada receives most of its immigrants ameliorates. As shown below, data from 2017 shows that only India has balanced trade with Canada.[128]

Merchandise imports & exports between Canada and select developing countries, 2017 and 2019[128]
Trading partner Imports Domestic exports
2017 2019 2017 2019
India $4.158 billion $5.282 billion $4.204 billion $4.773 billion
Pakistan $401.826 million $449.525 million $733.060 million $663.463 million
Philippines $1.392 billion $1.604 billion $811.073 million $704.941 million
China $70.926 billion $75.012 billion $21.845 billion $22.379 billion
Iran $88.482 million $29.708 million $125.955 million $326.820 million
Syria $1.179 million $2,829 million $22.520 million $27.713 million

See also edit

References edit

Notes edit

  1. ^ Employment Rate = Participation Rate * (1 – Unemployment Rate)

Citations edit

  1. ^ Uribe, Kim Mackrael and Alice (30 March 2021). "Canada Looks to Immigration to Boost Economic Recovery". Wall Street Journal.
  2. ^ "Canada wants to attract more immigrants". The Economist. 24 April 2021.
  3. ^ Drummond, Don; Fong, Francis (1 July 2010). "An economics perspective on Canadian immigration". Policy Options. Retrieved 7 January 2022.
  4. ^ "The Economics of Increasing Immigration During an Economic Crisis". Worthwhile Canadian Initiative.
  5. ^ Francis, Diane (14 May 2021). "Diane Francis: Trudeau's immigration scheme is just another way to redistribute Canada's wealth". Financial Post.
  6. ^ Vieira, Paul (14 August 2023). "Canada Tests the Limits of Its Liberal Immigration Strategy". Wall Street Journal. ISSN 0099-9660.
  7. ^ "How does increasing immigration affect the economy?". Policy Options.
  8. ^ Portes, Jonathan (2019). "The Economics of Migration". Contexts. SAGE Publications. 18 (2): 12–17. doi:10.1177/1536504219854712. ISSN 1536-5042. S2CID 195434031.
  9. ^ McDaniel, Susan A.; Wong, Lloyd L.; Watt, Bonnie (2015). "An Aging Workforce and the Future Labour Market in Canada". Canadian Public Policy. 41 (2): 97–108. doi:10.3138/cpp.2014-057. JSTOR 24365157. S2CID 154528325.
  10. ^ Robson, William B.P.; Mahboubi, Parisa (13 March 2018). "Inflated Expectations: More Immigrants Can't Solve Canada's Aging Problem on Their Own" (PDF). C. D. Howe Institute. Retrieved 24 May 2021.
  11. ^ "Douglas Todd: Immigration won't replace Canada's aging workforce". vancouversun. Retrieved 25 May 2021.
  12. ^ Green, David A. (November 2016). "How does increasing immigration affect the economy?". Policy Options.
  13. ^ Gordon, Julie (17 November 2021). "Canada's annual inflation rate matches 18-year high, set to keep rising | Reuters". Reuters.
  14. ^ "Globe editorial: Immigration is rising. So will housing prices – unless we start building a lot more homes - The Globe and Mail". The Globe and Mail. 6 January 2022.
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Further reading edit

Main article: Bibliography of Canadian economic history
  • Myers, Gustavus (1972), A history of Canadian wealth, Lewis and Samue

February 16, 2024
economic, impact, immigration, canada, economic, impact, immigration, important, topic, canada, conflicting, narratives, exist, higher, immigration, levels, help, increase, economy, higher, immigration, levels, decreases, capita, living, standards, resident, p. The economic impact of immigration is an important topic in Canada Two conflicting narratives exist 1 higher immigration levels help to increase economy GDP 1 2 and 2 higher immigration levels decreases GDP per capita or living standards for the resident population 3 4 5 and leads to diseconomies of scale in terms of overcrowding of hospitals schools and recreational facilities deteriorating environment increase in cost of services increase in cost of housing etc 6 A commonly supported argument is that impact on GDP is not an effective metric for immigration 7 8 Another narrative for immigration is replacement of the ageing workforce 9 However economists note that increasing immigration rates is not an effective strategy to counter this entirely 10 11 Policy Options found that mass immigration has a null effect on GDP 12 Increased immigration numbers and the associated soaring housing prices has significantly contributed to the rise of inflation in 2021 to the highest in 18 years 13 14 15 Canada is one of the top Western countries that accepts most immigrants per capita 16 and was ranking 9th in 2015 in terms of immigrants as a percent of the population among western countries while Liechtenstein ranked first 17 better source needed The per capita immigration rate to Canada has been relatively constant since the 1950s and in the first and second decades of 21st century there was a steady increase in the education and skill level of immigrants to Canada due to the focus on higher average productivity based applicants and thus immigrants to Canada on average were better educated than Canadians 18 19 This trend was enhanced for income redistribution in the third decade of the 21st century by opening low skilled immigrant pathways that only required minimal scores for immigration to achieve target of 400 000 immigrants per year and have cemented a new narrative on immigration immigration is to fill low skilled jobs and alleviate competitive labour market pressures faced by businesses that use cheap labour 20 21 22 From 2022 onward Trudeau government has set aggressive immigration targets per Century Initiative s lobbying over a million in 2022 in 2023 it was 465 000 485 000 in 2024 and it is 500 000 in 2025 23 24 25 Across Canada people have been asking the government to match affordable housing to the set immigration levels while the government annually welcomes 500 000 new permanent residents and more than 800 000 foreign nationals into the country on study visas as asylum seekers and on temporary work visas 26 An award winning Canadian journalist revealed the poor preparedness for receiving immigrants in swathes aligning with Canada s historic need for a servant class and cheap labor for the bourgeoisie and owning class Furthermore the journalist observed that the policy of inaction in neutralizing social and professional barriers for immigrants signals that Canada is not as welcoming as it purports to be and thus silently supports the creation of such a socioeconomic class in the great mosaic As a part of the process by default the government systematically forces a majority of immigrants into vulnerable positions and economic disenfranchisement 27 28 An article by an ex policy maker states that Canada is rooting for the low wage low productivity model of competitiveness that it has been locked in from the mid 1980s with this aggressive immigration targets A problematic approach per Paul Krugman in long term he considers throwing more cheap labour at problems without a significant increase in productivity will affect a country s ability to improve its standard of living over time 29 The article further observes that it is imperative that Canada and the government for the people require a fundamental re commitment to pre 1970s dominating national objective and efforts for a steady improvement in raising the living standard of Canadians by embracing the supply and demand concept of labour economics and improving the economic efficiency of the system 30 A former director from Quebec s Ministry of Immigration observed that the government needs to treat people better 31 Contents 1 Overview 1 1 Immigration to Canada 1 2 Economic rationale for immigration 1 3 Racialization and its Economic Impact 2 Immigrant wellbeing 2 1 Education levels 2 2 Decline in economic well being 2 2 1 COVID 19 2 3 Long term outcomes 3 Immigrant employment and income 3 1 Employment 3 2 Income 3 2 1 Wages 4 Wider effects 4 1 Government and social assistance 4 2 Government finances 4 3 International trade 5 See also 6 References 6 1 Notes 6 2 Citations 7 Further readingOverview editImmigration to Canada edit Main article Immigration to Canada According to the CIA s World Factbook 2017 Canada has one of the highest migration rates in the world 32 Canada is also unusual among western nations in the widespread popular support for high rates of immigration and a 2007 study showed support for immigration has increased in Canada 33 Canada s immigration policy which focuses on selecting immigrants based on their skills and qualifications to meet labor market demands as well as supporting irregular immigrants in need reinforces the public perception that immigrants are making a positive contribution to the economy and that the system preserves human dignity However assessing the economic effectiveness of the immigration policy is challenging due to the complex interplay of capitalist dynamics societal influences and political factors on the lives of immigrants 34 In 2022 Bank of Canada Governor Tiff Macklem gave insider advice to businesses to suppress wages across the board by not incorporating higher wages into contracts with employees for undermining collective bargaining power in long term citing a surplus of motivated workforce available from immigrant sources 35 36 In 2023 a Statistics Canada report revealed that the notion of a widespread labor shortage in Canada is no longer substantial The report found that jobs requiring higher education consistently had fewer available positions and highlighted that the hiring challenges for positions requiring post secondary education are not due to a lack of qualified workers but because of mismatch in skills that could be solved with ongoing training and deflated entry requirements and inadequate wages that could be fortified with desirable benefits or competitive wages The report also raised doubts about the hiring difficulties faced by firms trying to recruit workers with lower levels of education It raised questions whether these job vacancies are solely a result of labor shortages in specific low skilled occupations that might demand higher wages or if factors such as greater negotiating power and profit maximization that the low skilled industries enjoy play a significant role According to Jim Stanford an economist and the director of the Centre for Future Work the goal of immigration policy should not be solely focused on solving recruitment problems for low wage employers or any employers but rather on broader considerations that benefit the country and it s people as a whole 37 38 Economic rationale for immigration edit nbsp Donald Alexander Smith a migrant from Scotland drives the Last Spike Migrants to Canada at that time were British subjects not Canadian citizens There is no agreed view on the net impact of immigration in current times Historically Canada s unusually high immigration rates can be traced to the nation s unique economy Another factor is that Canada has one of the world s largest supplies of natural resources such as oil metals and lumber It also has a sparse population spread over a vast landscape Canada has thus faced acute labour shortages and has responded by actively searching for immigrants 39 In the late 19th century this included bringing Chinese migrants to build the Canadian Pacific Railway and actively advertising in Europe to find farmers with the Last Best West campaign Today similar recruitment efforts are needed to staff the oil sands projects in Alberta 40 nbsp Toronto s Jewish market in 1924 In that era the Jewish community largely composed of recent immigrants was concentrated in the impoverished area known as The Ward Another factor that contributes to the immigration question is Canada s low birth rate 10 3 births per 1000 people 41 The theory is that new residents can assist in meeting future government obligations relating to pay as you go liabilities The economic dangers of population decline are not universally accepted Organizations like the Fraser Institute question whether a declining population would reduce or increase per capita income noting that in the short term with a stable economy fewer people would increase the per capita income simply because you divide the income among fewer people This would increase per head consumption and create a climate of economic wellbeing that could nurture pro family values and policies which can increase Canada s birth rate 42 43 44 A study by the C D Howe Institute suggests that immigration cannot keep Canada s population young and could possibly contribute to population ageing in the near term 45 Employment statistics have also brought into question whether skilled worker immigrants with a 34 unemployment rate in 2001 46 are successfully meeting existing labour market needs in Canada However data from the 2020 Labor Force Survey has shown a 9 5 unemployment rate among landed immigrants 47 48 Many developed nations have much lower fertility rates than Canada but have not embraced immigration citation needed The first detailed analysis of Canadian immigration policy came from the Economic Council of Canada it called for immigration to be increased to eventually bring Canada s population to 100 million While it found that the economic benefits to Canada of immigration were fairly small noting that a historical perspective gives little or no support to the view that immigration is needed for national prosperity it also concluded that the benefits to the newcomers themselves were extremely large The report concluded that it would be hard not to recommend an increase when immigrants can gain so much and Canadians not only do not lose but actually make slight economic gains 49 50 Economists later conducted a series of studies using large amounts of census data 844 476 individuals and found out that immigrants who arrived from 1987 to 2004 paid only 57 of the taxes paid by average Canadian in 2006 with the effect that taxes from immigrants do not exceed the government expenses relating to them a gap of 23 billion annually according to their numbers 51 Racialization and its Economic Impact edit Recent immigrants are far more likely than native born Canadians to have low incomes initially due to differences in culture difficulties due to English being their second language discrimination and racialization 52 53 The employment equity policy prescriptions are not translated into programs that help immigrants to participate in the economy on an equal footing with other Canadians in a hostile labor market 54 There are no government incentive programs that would encourage organizations to hire educationally qualified immigrants for positions in which they are fit for work but lack certain aspects like social privilege economic security etc 55 All of which a native born Canadian initially would have to get into a workplace clarification needed A 2006 Canadian government report shows that 22 percent of racialized persons lived in poverty compared to 9 percent of non racialized persons and in major cities more than half of the people living in poverty were those who were racialized and the comparative poverty rate was growing 56 Later in a 2019 study it was found that the rate of poverty amongst recent immigrants is 2 4 times higher than that of native born Canadians and this was identified as an ever widening trend 57 In certain cities there are active local immigration partnerships that aid immigrants in getting jobs however a network of community based wraparound services through existing community organization s are not available 58 better source needed A 2001 study found successful interpellation is possible if young people are considered for immigration the study found a positive correlation between age and earnings for immigrants with acculturation effect and the study observed it in immigrants who were visible minorities or whose mother tongue was not English 59 A 2003 study found that with then lack of support systems that can directly address socioeconomic problems of immigrants in a racialised society and related lack of qualitative job accessibility it would take more than 20 years of Canadian experience to achieve any positive economic gains 60 Established studies show educational achievement and rewriting policies to recognise education is critical for gaining higher incomes for overcoming the poverty trap and achieving poverty reduction On an intergenerational level if parents can avoid poverty so will their children 61 In Canada s case with its high skilled immigration model it s partly about being insulated from racialization at various levels Immigrant wellbeing editEducation levels edit The Canadian system puts great emphasis on finding skilled immigrants 62 Immigrants to Canada are more skilled than immigrants to the United States George J Borjas compared immigrants to Canada and the United States finding those to Canada being better educated and receiving higher wages once settled He accredits this to Canadian neoliberal economy Within the Canadian economy immigrants are mostly found at the highest education levels In Canada 38 of male workers with a post graduate degree are immigrants to the country 63 and while 23 of Canadians are foreign born they comprise 49 of doctorate holders 64 A persistent problem for skilled immigrants is the recognition of foreign credentials Data from Statistics Canada reports that only 72 2 of new immigrants landed within 5 years between the ages of 25 and 54 that possess a university degree are employed 65 While Canada recruits people to come based on their degrees many newcomers arrive to find employers and professional organizations not recognizing their foreign education 66 As the percentage of skilled newcomers as a share of total migrants has increased so has this problem A study done by the IZA Journal of Development and Migration found that between 1991 and 2006 Canadian educated immigrants and Foreign educated immigrants found that Canadian educated immigrants who graduated from university had a large earnings gap with their Canadian born counterparts both in the initial years after immigration and in the long run 67 It was speculated that this outcome was likely due to lack of Canadian work experience and deficiencies in their social networks and language abilities 67 The setting of standards for or recognition of almost all professional credentials does not fall within the federal government s control and are therefore not determined by either federal laws or Citizenship and Immigration Canada policies 68 but Citizenship and Immigration Canada established the Foreign Credentials Referral Office to provide something like a directory assistance service for immigrants 69 The Government of Ontario enacted the Fair Access to Regulated Professions Act 2006 to help immigrants qualify for 34 provincially regulated professions 70 The Act also established the position of Fairness Commissioner in the province In 2007 the Government of Alberta signed an agreement with federal government that will accelerate the process of foreign credential recognition for new immigrants by licensing bodies in that province 71 Other provinces have made similar commitments Decline in economic well being edit Over the last 25 years the economic position of newcomers to Canada relative to the native population has steadily declined A number of hypotheses have been advanced to explain these issues The selection process is flawed 51 Government and corporate policies deliberately shift immigrants to secondary sector occupations These are jobs characterized by high instability hazardous work environments and low pay Inherently those involved in these sectors will have lower wages and more periods of unemployment In several European countries the immigration system is almost fully designed to try to fill these positions This is less the case in Canada but significant recruitment programs for sectors such as agriculture and oil and gas recruit many workers to perilous jobs 72 Newer immigrants from outside of Europe are victims of racial discrimination 73 Canada s social programs create incentives that conflict with the employment objective 51 and or Increased job competition among even native born Canadians has increased the importance of relying on networking to access the hidden market putting immigrants at a disadvantage given their lack of deep and broad networks 74 A January 2007 study by Statistics Canada analyzed the drop in income of economic immigrants from several perspectives 75 Economic immigrants are now more likely to begin their stay in Canada with a low income less than 50 of the median income than an immigrant in any of the other immigration classes see Table 16 in the study This drop occurred during the 1990s and early 2000s despite the percentage of immigrants arriving with degrees in the economic class including principal applicants spouses and dependents rising from 29 in 1992 to 56 in 2003 Stating an intention to reduce a backlog of immigration applicants of all classes and to better target the required skills needed in Canada the federal government passed a law in 2008 that gave the immigration minister new powers to alter immigrant selection Many expected that these powers would be used to favour workers in skilled trades over immigrants selected on the basis of education through the points system 76 While the well being of immigrants has declined in recent years this has not affected second generation immigrants or those who came to Canada as a child This group is one of the most successful in Canada with education and earning levels well above that of their parents and also above the Canadian average 77 COVID 19 edit In 2020 the Canadian government has planned to support economic recovery through increased immigration adding further strain to the socioeconomic system 78 while other countries like New Zealand had a different COVID 19 recovery immigration strategy 79 The official Canadian government website quotes Immigrants contribute to our economy not only by filling gaps in our labour force and paying taxes but also by spending money on goods housing and transportation 80 However the same is true with citizens and other capitalistic countries who also use young and changing temporary foreign workforce for achieving its economic needs and driving down wages 81 In pre pandemic period the notion for aggressive immigration was to increase the tax base for supporting a growing number of Canadian seniors through old age security and GIS During the pandemic it was re framed as a secret weapon to supercharge the country s economic recovery 82 Stephen Punwasi co founder of the data journalism website Better Dwelling evaluates Canadian immigration plans are becoming a snow job and predatory in nature 82 though Canadian liberal populism vehemently rejects the notion of needing modern slaves and intends to promote temporary workforce into permanent residents while lamenting the need of workforce in categories where majority of temporary workforce are employed 83 As a part of aggressively achieving Century Initiatives goal some never before seen immigration changes were made in 2021 to expand pathways to permanent residency for international students and temporary foreign workers These changes included lowering scores considering the passing of an academic program removing English and French language proficiency test result requirement and eliminating work experience requirement this solidified the notion that getting a study permit is an unofficially recognized pathway for getting Canadian residency some considered this to be cracks in the immigration system as a backdoor to residency and others as a convoluted pathway for migrant justice More such changes were underway in 2022 84 83 However these changes and promotions were heavily critiqued stating it would increase worker mobility from low wage sectors to sectors with better pay and the temporary workforce in odious sectors will be unwilling to work in low wages and unappealing working conditions as Canadian workforce are and it was evident from the 74 increase in job vacancies in the sector after the first TR to PR scheme or it could change employer behaviors and the currently suffering category without temporary workforce will even suffer more 85 86 During the pandemic from grassroot level investigation s in the refugees category it was found out that most refugees are ending up on the street and critiques recommend that Canada should not accept more refugees without proper systems that can ensure their welfare 87 The pandemic tagline for immigration was strongly promoted through other governmental stakeholders as well Pedro Antunes Chief Economist at Conference Board of Canada based on forecasts stated that Immigration continues to be an important driver of Canada s social and economic well being especially as we recover from the COVID 19 pandemic 88 As a part of this liberal vision in 2022 the government lifted off 20 hours work limit for international students and gave employers more supply of labour at an external cost negative for majority of the resident population 89 90 Another government impact assessment stated that high immigration levels have been recognized by the Bank of Canada as net benefit for the economy driving labour force growth consumption and housing activity This was when Canada intensively started to face heightened housing crisis due to unplanned affordable housing development and looming questions like whether low skilled workers should be integrated completely or could they be brought in seasonally like many other countries do are present 91 92 93 Focussing on immigration as a solution towards generating tax revenue and filling up unwanted jobs was considered to be flogging a dead horse due to the meager amount in returns lack of innovation lack of infrastructure for training required citizen workforce lack of inclusivity for training resident population through subsidies bottlenecking of admissions to in need and emerging professional programs adversely the population effect that increased immigration levels affect negatively on the per capita public transfer to a citizen the withheld taxes from actual income due to not engaging in formal economy regulatory bindings that force immigrant workforce into complementary job statuses and resulting waste of human capital underemployment and mismatched jobs horizontal and vertical etc 94 95 Another study stated that in 2019 2020 about 785M outside Quebec were funded to more than 500 third party settlement service provider organizations across Canada However list of these third party settlement providers their active status and their service achievements are not available for public access They state the increased immigration could increase investment and improvements in labour market integration process of immigrants itself like addressing underemployment language training while the immigration program already has a standardized test result submission to qualify for immigration and improving foreign credential recognition which already exists and is a part of the immigration application In 2023 post pandemic Canada continued to increase immigration levels set by consultants to account for 1 08 of Canada s population with a new immigration tagline that immigrants will and continue to address Canada s critical housing development needs while cities were struggling with lack of infrastructure to hold current temporary residents new permanent residents and new citizens 96 97 98 Long term outcomes edit One of the most important studies of the economic impact of immigration to Canada is Morton Beiser s Strangers at the Gate This study looked at the arrival of the Vietnamese boat people who began to arrive in Canada in 1979 to much controversy The total number of refugees was 60 000 the largest single group of refugees to ever arrive in Canada Beiser first studied the boat people upon their arrival finding that few spoke English or French that most were farmers with few skills useful in Canada and that they had arrived with no assets with which to establish themselves Beiser then followed the progress of the boat people to see what effect they would have on Canada Within ten years of arrival the boat people had an unemployment rate 2 3 lower than the Canadian average One in five had started a business 99 had successfully applied to become Canadian citizens and they were considerably less likely than average to receive some form of social assistance 99 100 Immigrant employment and income editEmployment edit Unemployment tends to be very high for recent immigrants compared to more established immigrants lived in Canada between 5 and 10 years Established immigrants tend to have an unemployment rate closer to the national unemployment rate of native born citizens In 2011 the unemployment rate of recently arrived immigrants was 13 6 considerably above the native Canadian average of 5 5 For more established immigrants the rate fell to 8 2 101 2011 labour market outcomes of immigrants aged 25 to 54 by period of landing 102 Labour force New Immigrants landed within 5 years Established Immigrants landed more than 5 to 10 years Native born CanadiansParticipation rate 73 5 80 7 87 8 Employment rate i 63 5 74 1 82 9 Unemployment rate 13 6 8 2 5 5 Income edit Higher rates of unemployment and lower wages combine to give newcomers less income than the Canadian average An analysis of Longitudinal Immigration Database by Statistics Canada showed that immigrants who landed in 2014 had a median income of 24 000 in 2015 compared to an income of 36 000 for native born Canadians The median income for new immigrants in 2015 was the highest ever recorded and 2 000 more than the median income of new immigrants in 2013 103 In previous decades immigrant income levels did rise to the national average after 10 years but in recent years the situation has deteriorated A 2003 study published by Statistics Canada noted that in 1980 recent immigrants had low income rates 1 4 times that of Canadian born by 2000 they were 2 5 times higher at 35 8 104 The study noted that the deterioration was widespread and affected most types of immigrants The 2003 study explains that the low income rate among non immigrants declined in the 1990s but this was more than offset by the income profile of new immigrants resulting in a net rise in Canada s total low income rate An updated January 2007 study by Statistics Canada explains that the deterioration continued into the next decade with the low income rate of recent immigrants reaching rates of 3 5 times that of Canadian born in 2002 and 2003 before edging back to 3 2 times in 2004 75 The 2007 study explains that this deterioration has occurred even though Canada implemented changes in 1993 to encourage more highly educated immigrants with 45 of new immigrants having university degrees as of 2004 In 1991 the Economic Council of Canada found that periods of immigration were not directly linked to periods of high growth They noted that a historical perspective gives little or no support to the view that immigration is needed for economic prosperity In the 19th and early 20th centuries the fastest growth in per capita real incomes occurred at times when net immigration was nil or negative Later in the 20th century the opposite linkage is seen but clearly there is no long term correlation However the same report found that a high rate of immigration was good for Canada s future and recommended expanding immigration rates to bring Canada s population to 100 million 49 A University of Montreal study published in 2002 by professor Marc Termote used different methods and studied different countries and concluded that immigration has no statistically significant impact to the per capita income of a country 105 Wages edit In terms of the impact of immigration worldwide Statistics Canada estimates that for every 10 increase in the population from immigration wages in Canada are now reduced by 4 on average with the greatest impact to more skilled workers such as workers with post graduate degrees whose wages are reduced by 7 106 In part because of the credential issue many immigrants are forced to find work below their education level and at lower wages However even for doing work of the same skill level immigrants are much less well compensated than their native born counterparts Immigration scholar Jeffrey Reitz calculated that in 2001 native Canadian employers were benefiting from and immigrant employees were losing out on between 2 and 3 billion per year due to this imbalance 107 A study published by Statistics Canada reviewed data from 1991 to 2010 regarding the convergence of wages between immigrants and native born Canadians The study found that there was a convergence of relative earnings for immigrants Immigrant men s average annual wages were 86 of those of native born men in 2010 up from 76 in 1991 108 There are a number of possible explanations for why newcomers earn less than native Canadians in the same jobs with the same skills Lower hourly wages might be an indication that the labour productivity of immigrants is lower and employers thus have reason to pay them less New workers are also less familiar with the Canadian labour market and will thus not be able to maximize their salaries Employers will also be less familiar with an immigrant s background and thus less willing to offer the same salary as to a native 109 Due to lower mobility they do not access better paying jobs such as in Alberta and Saskatchewan This has been changing with Calgary already surpassing Montreal in terms of percentage of visible minorities Visible minorities in Saskatchewan earn higher wages than native born Canadians Wider effects edit nbsp Signs in Toronto s Chinatown one of a large collection of neighbourhoods in Canada featuring businesses that are run by and often cater to recent immigrants Government and social assistance edit The government has a large department and a number of programs to try to ensure the well being of immigrants to Canada and ameliorate their economic condition Immigration Refugees and Citizenship Canada IRCC employs 5 000 staff 110 which on a per capita basis is 3 times more than the 15 000 U S Citizenship and Immigration Services employees IRCC recoups some of its department costs through landing fees In 2006 the Canadian government reduced the landing fee per immigrant by 50 111 The Parliamentary Budget Officer has reported that irregular migration from the initial entry into Canada to the final decision from the Immigration and Refugee Board and or Federal Court as well as any deportations cost the federal government 340 million in 2017 18 and is projected to rise to 396 million in 2019 20 112 New immigrants are also entitled to settlement assistance such as free language training under provincial government administered programs usually called Language Instruction for Newcomers to Canada LINC for which the federal government budgeted about 350 million to give to the provinces for the fiscal year 2006 2007 113 The majority of the 350 million was allocated to Quebec under the Canada Quebec Accord at 196 million per year 114 even though immigration to Quebec represented only 16 5 of all immigration to Canada in 2005 115 The 350 million is budgeted to increase by an additional 90 million by 2009 116 Provincial governments in Canada have established citizenship and immigration departments such as Ontario s Ministry of Citizenship Immigration and International Trade Support for immigrants was also one of the key issues that formed the basis of the New Deal for Cities between Toronto and other urban centres the Government of Ontario and the Government of Canada 117 because 43 of new immigrants settle in the Greater Toronto Area resulting in certain challenges for that region 118 119 A paper published by Statistics Canada noted that Over the 1990s 1990 to 2000 the city s low income rate rose 1 9 percentage points All of this increase was associated with deteriorating outcomes among immigrants which tended to increase the city s low income rate by 2 8 percentage points 104 In other words the low income rate among non immigrants fell but the income profile of new immigrants resulted in a net widening of the income inequality gap in Toronto during the 1990s The needs of immigrants prompted the United Way of Greater Toronto the largest United Way charity in Canada to identify immigration services in Toronto as a top priority for their 100 million 2006 campaign to combat poverty and social exclusion 120 In 2006 the Daily Bread Food Bank in Toronto reported that over 40 of its clients are foreign born and that almost half of that group had been in the country for less than 4 years 121 While the less than 4 year group shows far above average need the over 40 figure is in line with the general population as 44 of Torontonians are foreign born 122 Government finances edit There is no consensus on the net impact of immigration to government finances A 1990 study found that an average immigrant household paid 22 528 in all forms of taxes and on average each household directly consumed 10 558 in government services By contrast an average native Canadian household paid 20 259 in tax and consumed 10 102 dollars in services Across the country this means that immigrant households contributed 2 6 billion more than their share to the public purse 123 A 1996 study found that over a lifetime a typical immigrant family will pay some forty thousand dollars more to the treasury than they will consume in services 124 Explanations for this include that immigrant households tend to be larger and have more wage earners increasing taxes Newcomers are also less likely to make use of many social services Immigrants are less likely than native Canadians to receive employment insurance social assistance and subsidized housing 125 Immigrants are usually less prone to homelessness due to the support they receive from their families and communities 126 Recent immigrants are also less likely to make use of subsidized housing than native Canadians of the same income level In 2004 22 5 of low income native Canadians lived in subsidized housing but only 20 4 of low income recent immigrants did so though this number was considerably higher among more established immigrants 127 Results from a study from the Fraser Institute found that the immigrants who arrived between 1987 and 2004 cost governments 23 billion per annum as of 2006 in excess of taxes raised from those immigrants relating to universal social services e g welfare medicare public education 51 International trade edit Organizations that facilitate Canada s international trade system include the Department of Foreign Affairs Trade and Development publicly known as Global Affairs Canada the Trade Controls Bureau which operates under the Minister of Foreign Affairs the Canada Border Services Agency CBSA and the Canadian International Trade Tribunal which is an independent quasi judicial body 128 The presence within Canada of people representative of many different cultures and nations has also been an important boost to Canada s international trade Immigrants will often have the expertise linguistic skills personal connections with their country of origin that can help forge international trade ties Studies have found that Canada does have greater trade relations with those nations that have provided large numbers of immigrants 129 Canada s economy is heavily centered on international trade which accounted for 31 4 of GDP in 2017 130 although most international trade is with the United States In 2017 76 4 of Canadian exports went to the United States 130 This has been a common narrative about source countries of immigrants to Canada For many years expanded markets for trade has been a common rationale and justification for high immigration from the developing world Data from Statistics Canada in 2017 reveals that the trade balances with developing countries from which Canada receives most of its immigrants ameliorates As shown below data from 2017 shows that only India has balanced trade with Canada 128 Merchandise imports amp exports between Canada and select developing countries 2017 and 2019 128 Trading partner Imports Domestic exports2017 2019 2017 2019India 4 158 billion 5 282 billion 4 204 billion 4 773 billionPakistan 401 826 million 449 525 million 733 060 million 663 463 millionPhilippines 1 392 billion 1 604 billion 811 073 million 704 941 millionChina 70 926 billion 75 012 billion 21 845 billion 22 379 billionIran 88 482 million 29 708 million 125 955 million 326 820 millionSyria 1 179 million 2 829 million 22 520 million 27 713 millionSee also edit nbsp History portal nbsp Canada portalDemographics of Canada Ethnic groups in Canada History of immigration to Canada Canada immigration statistics Economy of Canada Economic results of migrationReferences editNotes edit Employment Rate Participation Rate 1 Unemployment Rate Citations edit Uribe Kim Mackrael and Alice 30 March 2021 Canada Looks to Immigration to Boost Economic Recovery Wall Street Journal Canada wants to attract more immigrants The Economist 24 April 2021 Drummond Don Fong Francis 1 July 2010 An economics perspective on Canadian immigration Policy Options Retrieved 7 January 2022 The Economics of Increasing Immigration During an Economic Crisis Worthwhile Canadian Initiative Francis Diane 14 May 2021 Diane Francis Trudeau s immigration scheme is just another way to redistribute Canada s wealth Financial Post Vieira Paul 14 August 2023 Canada Tests the Limits of Its Liberal Immigration Strategy Wall Street Journal ISSN 0099 9660 How does increasing immigration affect the economy Policy Options Portes Jonathan 2019 The Economics of Migration Contexts SAGE Publications 18 2 12 17 doi 10 1177 1536504219854712 ISSN 1536 5042 S2CID 195434031 McDaniel Susan A Wong Lloyd L Watt Bonnie 2015 An Aging Workforce and the Future Labour Market in Canada Canadian Public Policy 41 2 97 108 doi 10 3138 cpp 2014 057 JSTOR 24365157 S2CID 154528325 Robson William B P Mahboubi Parisa 13 March 2018 Inflated Expectations More Immigrants Can t Solve Canada s Aging Problem on Their Own PDF C D Howe Institute Retrieved 24 May 2021 Douglas Todd Immigration won t replace Canada s aging workforce vancouversun Retrieved 25 May 2021 Green David A November 2016 How does increasing immigration affect the economy Policy Options Gordon Julie 17 November 2021 Canada s annual inflation rate matches 18 year high set to keep rising Reuters Reuters Globe editorial Immigration is rising So will housing prices unless we start building a lot more homes The Globe and Mail The Globe and Mail 6 January 2022 Housing by price to income ratio for the second quarter of 2022 OECD Data theOECD Retrieved 10 February 2023 The Organisation for Economic Co operation and Development is a club of the world s 38 most developed countries According to 2022 quarterly rankings Canada is at the top of the list among these 38 countries for housing unaffordability i e Housing by price to income ratio Graphically Canada is at the top right Reality Check team 17 October 2019 Is Canada taking more migrants than other Western nations BBC News Retrieved 24 May 2021 International migrant stock of population Data in Indonesian 8 January 1994 Retrieved 24 May 2021 CBC News CBC 31 October 2017 Retrieved 12 December 2020 Immigrant Wage Gap Society Provincial Rankings How Canada Performs 6 October 2016 Retrieved 12 December 2020 Express Entry 27 332 CEC candidates invited Canada Immigration News www cicnews com 13 February 2021 Retrieved 17 May 2021 New pathway to permanent residency for over 90 000 essential temporary workers and international graduates gcnws Government of Canada 14 April 2021 Retrieved 17 May 2021 Skuterud Mikal 11 April 2023 Using immigration to fill vacant lower skilled jobs is not sound economic policy The Globe and Mail Retrieved 18 April 2023 Osman Laura 15 February 2022 Canada to bring in record number of immigrants by 2024 National Post National Post Retrieved 19 February 2022 The value of one consulting firm s federal contracts has skyrocketed under the Trudeau government CBC News 2023 Francis Diane 2022 Trudeau s foolhardy immigration targets Financial Post Todd D 10 April 2023 B C desperately needs Ottawa to tie immigration levels to housing vancouversun Paradkar Shree 13 April 2023 Dear immigrants Coming to Canada Here s what you re really in for Toronto Star Canada must end reliance on cheap foreign labor minister says Bloomberg 6 February 2024 Martin Roger L Milway James 1 January 2012 Canada What it Is what it Can be University of Toronto Press ISBN 978 1 4426 4465 6 Wright Don 28 June 2021 Rhetoric vs Results Shaping Policy to Benefit Canada s Middle Class Public Policy Forum Todd Douglas 2022 B C and Ontario need more say on immigration says Quebec specialist Vancouver Sun This policy immigration is simply reinforcing an immigration system built on temporary foreign workers largely in low paid permanent jobs It unfortunately opens the door to exploitation and furthermore according to many studies by leading labour economists is not a good strategy for the Canadian economy since it discourages higher productivity and innovation Since a lot of them temporary foreign workers won t succeed I think we need to treat people better These are people s lives These are families making huge life changing decisions Anne Michele Meggs Former Director of Planning amp Accountability Ministry of Immigration Francisation and Integration Quebec Country Comparison Net Migration 2017 The CIA World Factbook URL accessed 12 October 2018 Adams Michael 28 November 2007 The Windsor Star p A8 James Hollifield Philip Martin Pia Orrenius 2022 Controlling Immigration A Global Perspective Fourth Edition Stanford University Press p 19 ISBN 978 1 5036 3167 0 Bank of Canada governor should stay in his lane and not undermine collective bargaining thestar com 2 August 2022 Tiff Macklem turns tables on critics calls on politicians employers to boost supply of skilled labour 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awry Toronto Star 14 July 2006 Retrieved 5 August 2006 Will there be space for your child The Globe and Mail 30 July 2007 Retrieved 31 July 2007 Campaign starts on a high Immigrant services again a top priority for United Way Archived 25 September 2012 at the Wayback Machine Toronto Star 11 September 2006 URL accessed 11 September 2006 BLUEPRINT to fight hunger Archived 18 June 2006 at the Wayback Machine Daily Bread Food Bank 2006 URL accessed 5 October 2006 Miami tops foreign born cities Archived 24 January 2010 at the Wayback Machine BBC News 15 July 2004 URL accessed 13 October 2006 Ather H Akbari The Impact of Immigrants on Canada s Treasury circa 1990 in Diminishing Returns ed Don J DeVoretz Policy Study 24 C D Howe Institute Laurier Institution 1995 The Political Economy of Canadian Immigration Debate A Crumbling Consensus RIIM Commentary Series 96 03 Simon Fraser University 1996 Baker Michael Benjamin Dwayne 1995 The Receipt of Transfer Payments by Immigrants to Canada The Journal of Human Resources 30 4 650 676 doi 10 2307 146226 JSTOR 146226 Toronto s white underbelly Kate Hammer The Globe and Mail Toronto Ont 17 May 2008 pg M 4 A Study of Poverty and Working Poverty among Recent Immigrants to Canada Archived from the original on 1 August 2012 Retrieved 22 May 2008 a b c Canadian International Merchandise Trade Database Archived 7 December 2020 at the Wayback Machine Ottawa Statistics Canada Updated 11 December 2020 Retrieved 11 December 2020 Head Keith Ries John 1998 Immigration and Trade Creation Econometric Evidence from Canada The Canadian Journal of Economics 31 1 47 62 doi 10 2307 136376 JSTOR 136376 a b North America Canada 2017 Archived 22 September 2021 at the Wayback Machine The CIA World Factbook URL accessed 12 October 2018Further reading editMain article Bibliography of Canadian economic history Myers Gustavus 1972 A history of Canadian wealth Lewis and Samue Retrieved from https en wikipedia org w index php title Economic impact of immigration to Canada amp oldid 1205523594, wikipedia, wiki, book, books, library,

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