Qadeer: Canada needs new immigrants, but must plan for the consequences

2023/05/06 1 Comment

Another good commentary regarding the failures of governments and stakeholders to acknowledge and address the externalities of immigration:

Despite their success, Canadian immigration and settlement policies are producing some unintended negative effects on post-secondary education, housing, the labour market, and visa and immigration processes. Because these areas are interrelated, when one becomes compromised, others are also affected.

The number of scams, false claims and fake documents in the immigration and temporary workers’ permits process points to this issue. While there appear to be no hard statistics, media accounts and government warnings indicate they are an issue.

Canada is a world leader in accepting immigration. In the past few years, it has been adding about one per cent of its population yearly by immigration. In 2022, apart from permanent immigrants (437,000), the number of non-permanent residents increased by a net of more than 607,000, some of whom were admitted as temporary workers and/or international students. Canada’s population increased by more than a million people, largely as a result of a surge in immigration and temporary residents. The federal government is aiming to add 1.5 million more immigrants by 2025.

So far, these policies seem to have worked out. There is strong support for increased immigration among Canadians. Environics Institute’s recent survey shows that seven in 10 support the present level of immigration, though there is some recognition of the challenges arising from it.

One of these challenges is false documents, which tend to follow the priorities of Immigration, Refugees and Citizenship Canada (IRCC). For example, if the protection of people persecuted because of sexual orientation in a country is the priority, suddenly claims in that area increase. Some immigrant consultants, as well as human smugglers, tutor and manufacture documents to support such claims.

A recent story in the Toronto Star found that as many as 700 Indian students were admitted to study in Canada on fake admission letters. They lived and found places in different colleges for years before it became known that the letters were bogus. A regulatory body for immigration consultants, the College of Immigration and Citizenship Consultants, has had limited success in supressing such practices.

The post-secondary education sector’s structure and purposes have been widely compromised by the drive to recruit international students. Universities, and especially colleges, including private colleges, have come to depend on the international student enrolment fees. Access to higher learning may only be partially the motivating factor behind the scramble for foreigners trying to access Canadian post-secondary education.

Being an international student also opens the door to permanent residency in Canada. This is a big draw for students from abroad. It has been turned into a business by some post-secondary institutions. Even Ontario’s auditor general has identified the dependence on these fees as a vulnerable point in post-secondary educational finances.

About 500,000 international students contributed  $16.2 billion in 2017 and $19.7 billion in 2018 to this country’s GDP and supported more than 218,000 jobs in 2018. These international students are also being used as a cheap way to combat labour shortages. Recent rule changes allow some international students to work up to 40 hours a week while attending classes. This is to serve the need of the labour market, rather than advance international students’ education. To accommodate their schedule, institutions are arranging classes in the evenings and on weekends. In Toronto, for example, young South Asians dominate the landscape working as delivery workers and van drivers. If they are students, one wonders how much time they can spend on their studies after working a full-time job.

The enrolment of large numbers of international students affects the quality of educational programs in post-secondary institutions. International students generally add to the quality of learning experiences. Many international students are among the brightest. But the aggressive recruitment — combined with studies becoming a path to permanent residence and employment — have affected the classroom. Classes dominated by students from abroad with wide variations of language skills and motivation inhibit discussion and compromise learning. This is hardly the Canadian education for which they paid.

Immigration is a positive force for the Canadian economy, making up for labour shortages and a potentially decreasing population. Yet it has been used for many unethical ends. The downdraft of capabilities and status that immigrants experience on arrival is well-known. The infusion of hundreds of thousands of new job-seekers a year prompts abuses in the labour market.

Gig jobs rather than careers have become the norm. Foreign workers are hired to replace Canadians whose seniority has raised their salaries. Many economists argue that immigration at least initially affects wages of Canadian workers in the fields where immigrant labour supply increases.

In many professions, anecdotal evidence suggests that Canadians and long-standing immigrants are displaced after they have worked out new initiatives and routinized procedures. Foreign workers and new immigrants are then brought in at lower rates to run the programs. This means new immigrants and temporary workers often compete with second-generation Canadians in the labour market.

This affects the mainstream economy. International students and undocumented workers may be paid below minimum wage and off-the-books. A continual supply of young workers at lower salaries pushes older, more expensive and more experienced Canadians off the job market. It is not a surprise that businesses lobby for more workers from abroad.

The ethical responsibilities of attracting professionals in the fields of health and other critical areas from poor countries does not appear to register in discussions of Canadian immigration policies. The Global South needs professionals for development, yet rich countries such as Canada are attracting them to leave their homes with incentives for immigration.

This brain drain has long been an issue for the poor countries. It is particularly damaging in the case of medical professionals, who are direly needed in those places. The World Health Organization has taken note of the dilemma of health professionals emigrating from the Global South. It has established a global code for their recruitment, balancing individuals’ rights of movement and the social costs borne by poor countries.

Problems of housing adequacy, affordability and availability have buffeted Canada in one way or another for a long time. The demand-and-supply laws tell us that accommodating a million persons a year should exacerbate the housing shortages, particularly in major cities. This strain is expected, but what is of equal public concern are the abuses and illegal practices that the excessive demand is fostering.

Immigration funnels “black” money from abroad into real estate, leaving many housing units vacant for speculative gains. Toronto and Vancouver have lately recognized this problem and are restricting foreign buyers and taxing housing units kept vacant for six or more months.

More egregious is the practice of international students and other immigrants crowding in illegal housing, sharing rooms among many other, with their possessions spilling into the driveways. Neighbourhoods become noisy, choked with garbage and traffic. Brampton and Mississauga have been in news for the illegal basement rentals targeted at international students recruited from India.

Of course, a house is more than just a building. It requires infrastructure, schools, parks, sidewalks and roads. Housing requires major public investments and can result in higher taxes at local and provincial levels. Canadian cities are in a frenzy of increasing densities. Regardless of their success, these measures will change the quality of urban life for everybody. Immigration policies will change the form of our cities, potentially creating even more urban sprawl if there’s no careful planning.

Canada undoubtedly needs immigration, but post-secondary education and labour market policies are so interconnected that attention must be paid to the effect of an increase of a million new permanent residents. More enforcement against immigration scams, particularly aimed at post-secondary students, and the over-reliance of those institutions on foreign students should be deterred. The implications of more migrants on a housing market, particularly in specific cities, means a need for more careful planning. All of this suggests that these new immigration targets cannot be viewed as merely an issue of welcoming more faces. It requires careful planning, which to date does not appear to be happening.

Source: Canada needs new immigrants, but must plan for the consequences

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ICYMI – Green: No, immigration is not some magic pill for saving the economy

2023/01/02 1 Comment

Useful reminder…:

“When all you have is a hammer, all the world’s a nail.” This saying isn’t usually seen as a complimentary description of any policy approach but it appears to capture Canada’s immigration policy.

Immigration, undoubtedly, touches on nearly every aspect of our economy – from employment to output growth to health care to housing. And to hear the government speak, you would think it’s the right tool for the job in every one of them. The problem is, it’s at best an ineffective hammer for every one of them, and using it more will cause more problems than it will solve.

The size of the hammer is big and getting bigger. At the start of November, the federal immigration minister announced the new levels plan, taking Canada from receiving 405,000 permanent immigrants last year to 500,000 in 2025. Matching that is an expansion of the number of temporary foreign workers, to more than 770,000 in 2021 – almost double the high levels under the Harper government 10 years ago.

I am in favour of immigration at the levels of the recent past. But now the main argument made to ramp up immigration is that it will spur economic growth, and this is a tantalizing promise that turns out not to be true. Study after study after study shows that sudden expansions in immigration increase the size of the economy (the GDP) but don’t change GDP per person or the average wage – how well off people are. The research shows that immigration tends to lower wages for people who compete directly with the new immigrants (often previously arrived immigrants and low-skilled workers) and improves incomes for the higher skilled and business owners who get labour at lower wages. That is, it can be an inequality-increasing policy.

But isn’t this time different? Don’t we have such a high number of unfilled jobs that the economic machine is threatening to break down? First, the employment rate is now much higher than in the past and GDP per capita growth is strong. There is no evidence the machine is breaking down from lack of workers.

Second, the economy is not a machine that breaks down when parts are missing. It is an organic being that flows, guided by prices. If we didn’t bring in immigrants to match the vacancies, that does not necessarily lead to catastrophe.

When that happens, wages would have to increase to attract domestic workers. Some firms would not be able to pay the higher wages and might shut down or not undertake some projects. But those would be the least productive projects – the ones that don’t warrant the market wage. There’s nothing wrong with that. It’s the way markets work.

Immigration thus keeps wages down in occupations in high demand, and that reduces incentives for firms and workers already here to invest in the skills needed to fill those positions, reducing opportunities, missing an opportunity to increase the skill level of the work force and getting in the way of training and education policies intended to help workers with those opportunities.

Using immigration to solve the labour crunch therefore has the potential to weaken productivity and lower wages.

Linked to the argument about labour shortages is the aging of our population. The retirement of the baby boom will lead to substantial increases in the ratio of non-workers to workers over the next decade. Surely, bringing in more immigrants is the right solution to this? The answer is that it will help a little bit but immigrants aren’t that much younger than the people already living here, and adding 100,000 more immigrants a year won’t move the age dial enough to seriously alter the dependency ratio.

And while it’s not solving these problems, a jump in immigration will put strains on other parts of our economy and society. Adding 100,000 more immigrants a year will mean a big increase in people looking for housing in our cities each year, where the housing markets are already at the breaking point.

The government’s response to this most obvious of problems is that immigrant trades workers will fill shortages in construction trades, increasing housing production. But the construction sector isn’t grinding to a halt because of lack of workers – employment in the sector is already above 2019 levels and there is plenty of activity. The problem in housing supply is rooted in municipal regulations around density and offshore buyers treating our housing as an investment. Immigration won’t hit those nails. It will make problems worse. And when it does, it will put a strain on Canadians’ much vaunted immigration-welcoming attitudes.

Further strains on the health care system are also concerning. A case might be made for bringing in the front-line health workers our system needs now. But the current system underutilizes foreign-trained immigrants, and the problem lies with rigid professional associations, not with the federal government. Bringing in more health workers without solving this problem is unfair to the people we are bringing in, adding them to the large number of frustrated foreign-trained health workers already here. Again, increasing the numbers is not the solution to the problem.

Immigration is both necessary and positive. Immigrants make our society more vibrant. And the evidence is they don’t lower standards of living. But neither do they raise them. Labour markets are finally poised to give workers the wage gains they have been waiting for. Housing markets are straining. Blocking the first and worsening the second in pursuit of pounding nails that immigration doesn’t even hit well isn’t wise policy. A sudden jump without better preparing housing markets and creating mechanisms to integrate the new immigrants is irresponsible.

David Green is a professor in the Vancouver School of Economics at the University of British Columbia and an international fellow at the Institute for Fiscal Studies in London.

Source: No, immigration is not some magic pill for saving the economy

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Andrew Potter: Trudeau is risking our pro-immigration consensus

2022/12/17 Leave a comment

Indeed. Encouraging to see more articles focusses on the impact (my first article questioning the government’s approach and Canada’s ability to address these and other externalities dates from May 2021):

Justin Trudeau’s strong desire to push his unique brand of progressive cosmopolitanism onto audiences domestic and foreign has always stood uneasily beside his equally strong obsession with keeping the peace with Quebec, which is led by the increasingly nationalistic François Legault. Indeed, when these two goals have come in conflict, his tendency has been to either take Quebec’s side (such as the application of Bill 101 to companies under federal jurisdiction) or largely ignore it (Bill 21). But things are coming to a head now over immigration, and this is one area where it is hard not to think that Legault has a point. 

Last month, the federal government announced that Canada would be trying to bring in 500,000 immigrants a year by 2025, an almost 25 per cent increase over last year’s target. Thanks to current immigration levels, Canada’s population growth rate is already considerably higher than that of the U.S., the U.K., and Australia. As Statistics Canada reported this fall, immigrants currently make up almost a quarter of the population, the highest level since Confederation, and one of the highest levels in the world. 

Quebec seems to think things have gone just about far enough. The recent provincial election, which saw Legault’s CAQ re-elected in a landslide, was fought largely over questions of Quebec identity and the status of the French language, with the debate over appropriate levels of immigration serving as a flashpoint. The Liberals bid highest,  suggesting the province could accommodate 70,000 newcomers a year, while the PQ came in with a lowball pledge of a maximum of 35,000. The governing CAQ set the limit at 50,000, with Legault saying anything higher would be “suicidal” for the province. 

Given this all-party Quebec consensus around relatively low levels of immigration, it was surprising to see Trudeau assert in a year-end interview that Quebec has “all the tools” it needs to bring in as many as 112 000 immigrants a year, which would be its per-capita share of the 500,000 national target. In response, Legault’s immigration minister Christine Fréchette called Trudeau “insensitive” and said that Canada could bring in as many people as it likes but no more than 50,000 are coming to Quebec. 

The fact is, Quebec’s concerns over its ability to successfully integrate tens of thousands of newcomers are not frivolous, and it would be helpful if the federal government would recognize that these concerns apply as much in the rest of the country as they do in Quebec, if for different reasons. 

Ottawa’s rationale for ever-increasing levels of immigration is overwhelmingly economic. We are told that immigration leads to higher economic growth, will help alleviate labour shortages, and will mitigate the effects of an aging population. But even if this were true (the evidence is mixed on all of these), it is striking how little attention is paid to our capacity to successfully integrate a steadily increasing number of new Canadians. 

For starters, where are they all going to live? Housing in Canada is notoriously expensive, especially in the major cities where the majority of newcomers tend to settle. And we’re not adding anywhere close to the number of new houses that we need; as a recent Globe and Mail featureabout the challenges of immigration noted, the basic mismatch between the demand for housing and its supply is getting worse, not better. 

Then there is health care. The system, as anyone paying attention can see, is in a major crisis. There is a widespread shortage of nurses, and somewhere around six million Canadians can’t even find a family doctor. Ottawa will argue that the solution is to bring in more foreign-trained medical professionals, but the problems they have getting their credentials recognized in Canada are long-standing. 

And all of this assumes the prospective immigrants can even get into the country in the first place: The federal government is currently facing a surge of lawsuits over the backlog of 1.2 million unprocessed immigration applications, with some applicants waiting years for a decision. 

In short: We make people wait an unconscionable long time while we decide if we will admit them; once they are here we have no plan for providing them with affordable housing or accessible health care; and then we make it exceedingly difficult for them to practice the professions for which they are trained. And all of this comes at a time when the wave of right-wing populism that has swept across the West over the past half decade has made itself at home in Canada. 

It is easy to forget just how recent it was that Canadians became comfortable with high levels of immigration. When Brian Mulroney basically doubled Canada’s immigration targets overnight in the late 1980s, it sparked a substantial backlash, and was in part responsible for the rise of the Reform Party. The late 1980s and early 1990s saw a great deal of national anxiety over immigration, with many critics worried that growing numbers of “hyphenated Canadians” would lead to cultural balkanization and social disintegration. It was only at the end of the 1990s that popular opinion switched from being predominantly anti-immigration to generally in favour. 

Canada’s great multicultural experiment over the past quarter century is largely a success story, with a healthy majority of Canadians continuing to support current levels of immigration. Most of us probably have personal stories about how and why immigration has made our lives better, and, thankfully, there aren’t yet loud calls for less immigration. 

But it wasn’t always this way, and it is important to remember that the current consensus around immigration (and multiculturalism more generally) was a hard-won achievement. With what appears to be a single-minded push to get immigration levels up to half a million a year, with no plan for dealing with the increasing number of obstacles to successfully integrating them, one worries if the Liberals are taking that achievement for granted.

Source: Andrew Potter: Trudeau is risking our pro-immigration consensus

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