In a recent column in the National Post, I made the argument that Canada would need roughly 1 million immigrants annually to prevent a harmful demographic crunch as the baby boom generation retires. The reaction was quite divided, as expected. Immigration is a complex policy area, which is further complicated by strong emotional reactions from some people on both sides of the debate. Unfortunately, it is tough to address every single criticism in 750 words. This post will serve as a rejoinder to that column, which will address the most common criticisms.
More immigration will further strain the welfare state:
In an often cited study, authors from the Fraser Institute argued that immigrants create a fiscal burden of up to $23.6 billion dollars per year. Given the specifics of how immigration policy works at the federal level, this may well be true. This is one of the reasons why I argued that we should focus on using the provincial immigrant nominee programs to target the most economically beneficial immigrants. The program grants provinces a quota of immigrants that can be accepted into the province contingent upon a job offer. So instead of coming over and finding a job, they need to have a job offer before they get here. This is particularly useful for industries that have large labour shortages, and are not highly sought after by young Canadians. Long haul truck drivers and slaughter house workers are two of the categories that have been targeted in Saskatchewan and Manitoba, for instance.
There aren’t enough jobs for immigrants:
Some people have pointed out that there have been more jobs lost in the last few years than created. Using this as an argument against immigration is disingenuous. The recession stifled job creation, but the economy will recover. And even if we endure decades of slow growth, we will still be faced with labour shortages as boomers retire. But there is a deeper problem with this argument that needs to be addressed. There isn’t a fixed stock of jobs available at any given time. Think of it at a smaller level. The City of Calgary grew from roughly 250,000 to over 1 million in the last 50 years. Yet Calgary has not had an unemployment problem. Why? Because more people means more demand for goods and services. When more people started moving to Calgary, developers got to work building new subdivisions, retail outlets, and office space. If anything, increased immigration would stimulate the economy.
Immigration leads to increased crime rates:
The connection between immigration and crime has been assessed by several high profile studies. The findings in America are unambiguous: immigration doesn’t lead to increased crime rates. The same holds true for Canada. Toronto and Vancouver are two of the most ethnically diverse cities in the developed world, and also among the safest. While we need to ensure that our immigration screening process is vigilant, there doesn’t appear to be any cause for alarm.
Increasing immigration levels is politically impossible:
Significantly increasing immigration levels would no doubt be met with some resistance, but consider the magnitude of the challenges we’re facing. Canada’s national debt stands at over $564 billion. This works out to roughly $16,500 per person, and this doesn’t include provincial and municipal government debts. It also doesn’t consider unfunded liabilities, such as public employee pension funds. Meanwhile, the baby boomers are getting set to retire. Currently, there are roughly 5 people between the ages of 20-64 for every person aged 65 and up. By mid-century, that ratio will reach 2-1. The picture gets bleaker when we factor in the 0-19 demographic, who are primarily not in the workforce. There will be a combined total of 84 people between the 0-19 and the over 64 demographic for every 100 people between the ages of 20-64. Statistically, this means that nearly every person in the workforce will be financing one person who is not in the workforce. This will be a major strain on young workers, who will not be thrilled about financing the entitlement programs that baby boomers voted for, but never paid for.
And then there’s healthcare. Boomers paid into the healthcare system at a point in time where the population was fairly young. This is a crucial point, because our healthcare system is financed on a pay as you go basis. People pay taxes sufficient to cover health expenses for the current year. So when the workforce is young, there are a large number of relatively healthy people paying taxes. As the workforce ages, health care costs will increase while there are less people paying taxes. There will be pressure from retirees to maintain the benefits that they assumed they were paying for, while working age people will be swamped with higher taxes. The situation would be intractable, and could lead us down the same path as the United States.
While boosting immigration levels might be politically difficult now, it pales in comparison to the political choices that will have to be made later if we don’t act soon. When framed in this way, the political challenge of increasing immigration levels seems far less daunting.