Canada’s demographic realities are not unique. As in most of the developed world, our birth rates are negative: we are not producing children at a fast enough pace to replace those who die or leave. This fact leads to an inescapable conclusion. Unless we find people elsewhere, immigrants from other countries, we will not have the workers needed to fund social services.
As a consequence, competition for skilled wealth-producers among affluent countries is already fierce and will intensify. Despite our obvious attractions, Canada and especially Manitoba are not well positioned to respond. Our frigid winters, high tax rates and over-regulated commerce already drive away our brightest and best.
Into this mix drops a recent study from the Fraser Institute, Canada’s most prolific think tank and normally a fervent defender of open borders and expanded labour mobility. In Canada’s Current Immigration Levels Undermining Tolerance and Acceptance, author Martin Collacott maintains that our current national intake of about 230,000 immigrants a year is too high and that the costs of new Canadians exceed the benefits.
A new Frontier Centre paper, Should We Close Our Borders: Canada’s Immigration Policy takes Collacott’s analysis apart and disagrees with its case for curtailing immigration.
Collacott’s argument relies on three main research sources. The first, released by the Economic Council of Canada in 1991, states that the fastest growth in real per capita income over the last century mostly occurred when net immigration was “zero or even negative.” The second, out of the Department of Health and Welfare in Ottawa and cited by the ECC, “found . . . no correlation whatsoever between population growth and economic growth in the 22-member OECD.” Lastly, Collacott uses an alarming 1998 study by the OECD, which suggests our living standards could decline 25 percent below the OECD average due to faster population growth.
But Collacott’s use of numbers is highly selective. The EEC study, for instance, is inconsistent. It also says that “for every one million new immigrants the economy grows by .3%.” Immigration does enlarge the economy, but apparently not in sufficient degree to be important. But even this grudging concession doesn’t comport with the lessons of history.
From 1945 to the present, the Canadian population increased by 16 million, about a fifth of that from direct immigration. When the Canadian-born children of immigrants are included, the percent doubles to roughly 40 percent, or 12 million of our current population. During this same period, the Canadian GDP increased from $150 billion to just over $1 trillion. Immigration played a huge role in the expanding Canadian economy.
The most telling statistic deals with the recent record, the period from 1996 to 2001. All of Canada’s 4 percent population growth – the lowest rate in our history – came from immigration. The three countries that take in the most, Canada, Australia, and the U.S., also have the lowest unemployment rates in the OECD.
Collacott suggests that new immigrants cause more misery for our poorest people and uses Harvard University data that links lower level wage rates in the United States to competition from new arrivals. But that situation has no parallel in Canada. We do not share the American problem of millions of illegals flowing across the porous Mexican border.
He also attributes Canada’s brain drain to pressure from new arrivals and here he is on more solid ground, even though Industry Canada disagrees. The relative lack of opportunity for highly skilled workers can be addressed at home, by tackling dysfunctional public policies and reducing our tax loads, without closing our borders.
Do immigrants abuse and take advantage of our expensive social programs, as Collacott claims? Perhaps, but only over the very short term. Unquestionably, during their first five years of residency, immigrants do use social services much more than the average Canadian. But this gap disappears over time. On average, the new wealth generated by arrivals after 1980 is higher than that of native-born Canadians.
We also need to understand that we capture valuable human capital when bringing in skilled immigrants, each of whom would have cost about $150,000 to educate to maturity. Given that, it is disputable whether immigration imposes a net cost on the Canadian taxpayer at all. By opening our borders, we capture that capital investment from foreign taxpayers and acquire workers who are highly trained at no cost at all. Initial transition costs, including social service outlays, pale in comparison.
Collacott pushes hot buttons to stoke fear, including freshly relevant ones, like crime and terrorist cells. But on average, far fewer immigrants are charged with criminal offences than the Canadian–born, and crime rates have generally declined since 1980, despite the arrival of hundred of thousands of new citizens from other places.
Canada is a big country with lots of room. Unless birth rates undergo a magical transformation, we will not have enough productive workers to underwrite our pensions and beds in nursing homes. We say bring them in, the faster the better.