Former BC DM Wright: Rhetoric vs. Results: Shaping Policy to Benefit Canada’s Middle Class – Immigration excerpt questioning approach

Interesting and relevant paper on rebalancing policy priorities. Excerpt on immigration of note:

Some nuance on immigration policy, please (it’s GDP per capita, stupid!)

There is a growing push from opinion leaders and decision makers to

significantly raise the level of immigration.[19] The current federal government has raised the target for annual immigration levels and seems on a path to raise it further down the road.

Let me state upfront that I am in favour of maintaining immigration at significant levels. Over the past 60 years Canada has evolved into a wonderful multiethnic, multicultural nation. That doesn’t mean it doesn’t have issues with tolerance and inequitable socioeconomic outcomes. But the general view of the

population is that immigration continues to be positive for Canada.[20] Furthermore, Canada has a moral obligation to do its share of ameliorating the suffering of the millions of refugees created from regional wars, civil wars, ethnic cleansing and failed states.

Given the emphasis in this paper on the essential need for tightness in the labour market, however, it is important to consider whether higher immigration levels will be helpful or harmful in re-establishing a rising standard of living.

The rationale for the need to increase immigration levels weaves together four elements:

  1. To offset the challenges of the aging baby-boomer bulge in the population pyramid;
  2. To keep GDP growing by increasing the labour supply and the demand for goodsand services;
  3. To realize greater economies of scale; and
  4. To supply employers with the workers they cannot find.

The first of these sounds reasonable on the face of it. But there is much less

there than one might suppose. The age structure of immigrants is not that different from the existing population in Canada. On average it is somewhat younger, but not dramatically so. This is because, in addition to prime working age adults and their children, the immigration mix also includes family class parents and grandparents. This has led at least one analyst to joke that the only way immigration could be a solution to the population pyramid problem is if Canada only accepted 15-year-old orphans as immigrants.

A recent analysis[21] shows that “changes in immigration levels have impacts on the margin only: no increase within the realm of practicality can prevent population aging. Other policies to ease the demographic transition, notably encouraging people to work longer are at least as powerful.” The authors calculate that Canada would need to raise immigration levels to 1.4 million a year to even out the population pyramid. In 2019, 341,000 — a record level — arrived in Canada.

The second is more than a little specious, hence the somewhat rude subtitle for this sub-section. Almost daily news items quote somebody of influence saying the only way to increase the rate of growth of GDP is to increase immigration. Some interests will benefit from increasing immigration levels — employers who would prefer a buyers’ labour market to a sellers’ labour market, the real estate industry, financial institutions that provide mortgages and people who already own their homes. But the critical metric is not GDP; it is GDP per capita and how it is distributed.

Source: https://ppforum.ca/publications/don-wright-middle-class/?output=pdf

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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