The Canadian government recently announced a moratorium on immigration applications for parents and grandparents of Canadians under the family reunification program. The objective is to eliminate the existing backlog of applicants. A new renewable three-year visa category was introduced for parents and grandparents as a compromise. Given the existing backlog and the controversy surrounding the cost of the program, pushing the pause button may well be necessary. But rather than eliminating the program, as many opponents have urged, the government should instead find a way to ensure that sponsors are bearing its full costs. Family reunification is an important tool in attracting economic immigrants, who are more vital than ever to our economy. Before making drastic decisions, we should examine some of the benefits of the program.
Roughly 24% of immigrants to Canada are family-class immigrants. Many admitted under the program are parents and grandparents of immigrants. Given Canada's extensive welfare state, bringing in immigrants who are past or approaching the retirement age is extremely costly. After all, immigrants over 65 are entitled to CPP after 10 years of residence and older people consume far more health-care resources than working age people (Half of all lifetime health-care expenses are incurred after the age of 65).
Many people concerned about the cost of family reunification will argue that Canada should reduce the number of immigrants accepted under the program as a way to reduce the cost of accommodating people deemed "unproductive" consuming resources in the country. But there are three important benefits from family reunification that are often overlooked and impossible to quantify.
First, many immigrants will not stay in the country if they can't bring family members. The cost of having immediate family abroad can be a strain. Moreover, many of the millions in remittances that immigrants send abroad might stay in the country if closer family members were here. Since we need more immigrants to make up for labour shortages, and we want them to be financially healthy, preventing immigrants from bringing their parents can be detrimental.
Second, parents and grandparents who in many cultures live with their children and grandchildren, can provide valuable support to working families, even when they themselves do not work. Whether it is caring for the grandchildren, or helping with errands or tasks at home, grandparents do many things that don't get counted in the GDP, but do save families money. In doing so, they may indirectly boost GDP: A grandparent available for childcare can make the difference between one income and two.
Third, it makes for more stable and happier homes. One might scoff at the notion of promoting family reunification to make people happy, and if it were its only benefit, we might need to cut down the program. It is granted that stability and happiness are not the primary benefit, but it is an important aspect to consider.
Since one side of the debate is primarily concerned with the economic benefit of immigration to existing Canadians, and the other side focuses on the benefit to immigrants themselves, the debate has been predictably polarized. A reasonable way to reconcile both concerns would be to charge an entrance fee to sponsored parents and grandparents through the family reunification program.
If a fee were to be imposed, settling on the appropriate amount would be difficult. One way would be to use the "net fiscal transfer" per immigrant as a revenue target. This figure is the lifetime difference between what immigrants on average pay in taxes, and what they receive in benefits. The most precise calculation available of this number is $450 per immigrant. While such figure understates the costs of family reunification, at least it would ensure that the immigration system is breaking even. It would raise the fee per applicant to $7,950. The amount isn't unreasonable. The government could allow for gradual repayment or explore the possibility of increasing the residency years to qualify for CPP to bring down the cost.
Some might say that such a move is as unfair as the head tax once levied on Chinese immigrants, but the similarities are superficial. The head tax was a tax on immigration itself. There was no welfare state when the head tax was instituted. But with an expansive and underfunded welfare state, we need to ensure that we treat existing taxpayers fairly. Mitigating the costs of parents and grandparents of immigrants to our social safety net will be key to ensuring public support for the program.