Globe Editorial – Immigration: Canada’s economy can’t rely on temporary workers and study permits forever

2023/06/09 Leave a comment

The Globe continues its shift towards being more critical of Canadian immigration policies and distancing itself from Century Initiative and other large scale immigration advoccates:

Canada has big, enduring demographic challenges ahead. So why are we trying to paper them over with ever-larger temporary band-aids?

This approach provides wasteful subsidies to low-wage employers, distorting labour and housing markets, and sets up promising newcomers for exploitation.

The numbers are breathtaking. In 2015, the year Justin Trudeau’s Liberals were first elected, 352,000 international students came to Canada on temporary study permits and 251,000 workers came through the International Mobility Program, a type of temporary work permit that doesn’t require employers to look for local help first.

By 2022, each of those categories had more than doubled, with 808,000 people coming to Canada to study, and about 800,000 coming to work, as the chart below shows.

Immigration Refugees and Citizenship Canada confirmed to The Globe there are “not set levels or limits” to the number of the work or study permits, as they are “driven by demand” from employers and postsecondary institutions. Ottawa has effectively created a shadow immigration department. “Increasingly, our immigration system has moved from state-run immigration to a system that is really controlled by non-state actors – the employers, the educational institutions,” said Rupa Banerjee, a Canada Research Chair in immigration and economics at Toronto Metropolitan University.

Colleges and universities can accept all the international students they want, and charge them through the roof, even if doing so jacks up local rents and students have to pack into movie theatres because there aren’t enough classrooms.

Schools argue they need to do this because domestic enrolment and government funding have flatlined. The Ontario Auditor-General found in 2021 that domestic enrolment at the province’s colleges had fallen 15 per cent over the previous decade, while the number of international students had increased 342 per cent. International students made up 30 per cent of the student body that year, but contributed 68 per cent of the tuition revenue. At some schools, it’s more than 90 per cent.

These students do not travel thousands of kilometres to study hotel management at a small college for the academic thrill. They make the journey for the one-in-three chance (according to Statistics Canada) of getting permanent residency.

So instead of forcing postsecondary institutions to make necessary, if painful, decisions to ensure long-term financial sustainability, Ottawa is allowing schools to sell permanent-residency lottery tickets – even though it can have devastating effects on those who don’t win the draw.

The federal government is likewise providing subsidies to some businesses in the form of cheap labour through the temporary foreign worker program. There may be a case for foreign workers in the agriculture sector, with its seasonal, time-sensitive work, as long as those employees are treated well. But industries such as fast food are also frequent users of the program. If the local Tim Hortons can’t find enough workers, it should raise wages, innovate or close. There is no economic imperative to prop them up; doing so makes it easier to put off productivity investments such as automation.

Ottawa should immediately begin to rein in these immigration streams through annual caps, forcing schools and low-wage employers to face their respective realities. International students can contribute much to Canada, and we to them, as long as it is at levels at which they can be properly supported. For critical sectors that badly need workers, such as health care and construction, we should look to permanent streams that don’t tie workers to their employers.

Canada wants and needs bright young people to move here to build their future. But exploitative band-aids are not the way to do it.

Source: Immigration: Canada’s economy can’t rely on temporary workers and study permits forever

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What’s the right number of immigrants for Canada?

2023/06/06 Leave a comment

In contrast to Globe editorial, Immigration: Canada needs more newcomers and (much more) housing, this article asks the needed questions, featuring business and academic economists who are increasingly challenging the current general political and economic consensus:

How many immigrants should Canada be admitting?

Economists are asking that question with increasing intensity – and for good reason. Canada’s population jumped by more than a million people last year. The surge was the largest annual increase in the country’s history, and one that was driven nearly entirely by immigration.

The skyrocketing number of new Canadians is putting added pressure on an already drum-tight housing market. People are scrambling “for a place to live in a market with no housing supply,” Bank of Nova Scotia warns. Home prices are climbing, while the rental vacancy rate is at “a generational low,” according to National Bank of Canada.

For now, the Liberal government in Ottawa is sticking to the aggressive pro-immigration policy that it introduced after being elected in 2015. It is targeting nearly half-a-million immigrants a year– roughly double the 261,000 that Canada admitted annually in the 2010 to 2014 period.

However, a growing number of critics are challenging the logic behind Ottawa’s great immigration ambitions.

Prominent business economists say they are baffled by the government’s insistence on sticking to supersized immigration quotas at a time of widespread housing shortages. Stéfane Marion, chief economist at National Bank of Canada, and David Rosenberg, president of Rosenberg Research, have urged Ottawa to consider revising its targets to allow housing supply to catch up to demand.

Meanwhile, a new working paper from a trio of Canadian academic economists digs deeper into the issues around immigration. The paper, currently circulating in draft form under the title, The Economics of Canadian Immigration Levels, offers a scholarly but withering critique of current policy.

The authors – Matthew Doyle and Mikal Skuterud of the University of Waterloo, and Christopher Worswick of Carleton University – argue that policy makers are mistaken to conclude “that if some immigration is good for the economy, then more must be better.”

Granted, how you view this issue depends on how you define “better.” The three economists acknowledge that if Ottawa’s goal is simply to swell Canada’s geopolitical clout then, yes, it does make sense to fling open the doors and welcome a massive influx of newcomers. More workers and more consumers will mean a larger economy.

But size isn’t everything. Imagine a case in which Canada’s economic output doubled while its population did, too. Would this improve life for a typical Canadian? Not really. The average person would wind up seeing no improvement in their standard of living. The increase in the size of the economic pie would be matched by an equivalent increase in the number of people sharing it.

There is also morality to consider. On paper, it’s possible to show that a country can generate an “immigration surplus” by bringing in masses of low-skilled workers to take menial jobs. This underclass of low-paid immigrants can free up the existing population to pursue better-paid occupations.

However, it’s questionable how far this idea can or should be pushed in an egalitarian country such as Canada. The notion of an immigration surplus downplays the stresses faced by low-paid immigrants. It ignores issues of income inequality and focuses only on the benefits reaped by the people already in the country.

The three professors argue for a more equitable, more inclusive approach. They say the fairest and most reasonable test of Canadian immigration policy is whether it helps to grow output per person – or gross domestic product (GDP) per capita, in the jargon.

Research has demonstrated that measures of per capita GDP are closely tied to feelings of well-being and life satisfaction. If immigration offers a surefire way to boost this number, then there is good reason to think it is benefiting the nation as a whole.

Unfortunately, for the pro-immigration camp, there is no evidence that it does much of anything to help accelerate growth in GDP per capita.

The opposite is often true. When immigration is limited and labour is in short supply, businesses can find it profitable to invest in new capital – tools, computers, factories and other gear – to boost the productivity of scarce workers. This capital investment can help to swell per capita GDP.

In contrast, when immigration is surging, the case for capital investment may look less attractive. Businesses can find it cheaper to hire an additional worker to meet new demand instead of investing in new equipment. The result can be a larger work force, but one with lower productivity and lower per capita GDP.

The three professors look back at past decades and see nothing to indicate that immigration has ever been an economic tonic.

“Using evidence for Canada and the U.S., we find either a negative relationship, or no relationship, between periods of high immigration and subsequent growth in GDP per capita,” they wrote in their paper.

Just to be clear here: The lack of any obvious economic payoff from immigration doesn’t mean Canada should slam the door shut on newcomers.

The economists point out that federal legislation lists 12 goals for immigration, ranging from family reunification to supporting minority official languages communities. Many of those goals aren’t economic in nature and can still justify substantial levels of immigration.

But the dubious economic case for immigration raises questions about why Ottawa has been basing so much of its immigration policy on economic rationales. The government’s most recent targets allot roughly 60 per cent of immigrant slots to economic-class applicants – that is, people who are, in theory, being chosen for their ability to contribute to Canada’s prosperity.

This emphasis on economic-class immigrants may reflect misconceptions.

Consider, for instance, the idea that immigration is needed to fill low-skill, essential jobs. This doesn’t make a lot of sense, according to the economists. Admitting people to fill low-wage jobs pulls down, rather than pushes up, GDP per capita.

Just as questionable is the idea that immigration can offset the effects of Canada’s aging population.

Immigrants age and eventually retire just like anyone else. While there may be a short-term demographic dividend from immigration, “leveraging this demographic dividend to produce ongoing growth would require a Ponzi-type strategy of continually increasing the immigration rate to undo the increasing size of the retirement-age population,” the economists wrote.

So what can Canada do to improve its economic-class immigration system?

The three co-authors suggest that Ottawa should focus on admitting immigrants with higher levels of skills and education than it is currently targeting. They argue that the goal should be to select immigrants who can earn at least as much as, if not more, than the average Canadian within 10 years of arrival. Over time, this policy should boost GDP per capita.

The economists don’t offer any estimate of how such a policy would affect the number of immigrants being admitted, although Prof. Skuterud and Prof. Worswick both acknowledged in interviews that the impact, at least at first, would likely be a significant decline in the number of newcomers.

They suggest this might be wise, given the stresses being put on social systems by today’s massive influx of immigrants. Their paper cautions that “the strains currently being placed on the public health care system, the public education system and the highly regulated housing sector suggest even more reason to be cautious about setting high levels of economic immigration.”

Pro-immigration voices can, of course, find plenty here with which to take issue. That is absolutely fine. A vigorous debate over immigration is exactly what Canada now needs.

Source: What’s the right number of immigrants for Canada?

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Trudeau can’t keep juicing the economy with more spending

2023/05/31 Leave a comment

Some interesting nuggets in this op-ed by Argitis and Asselin, suggesting that some of their “cheerleading” of increased immigration may be undergoing a rethink. Needed greater emphasis on productivity and per capita GDP is an implicit admission that their support for the government’s permanent and temporary immigration has run counter to increased productivity.

And their suggestion for a slowdown in immigration, albeit not for economic class, to give housing a chance to “catch up” again is an implicit admission that their focus on levels (“more”) neglected the very real impacts on housing (in addition to healthcare and infrastructure).

Further (needed) cracks in the overall consensus?

The unexpected pick up in Canadian inflation last month — even if it turns out to be a blip — is a fresh reminder that Prime Minister Justin Trudeau’s government is facing a more perilous economic policy landscape going forward, with difficult trade-offs on the horizon.

The natural economic instinct of this government has been generous budget spending and open international migration.

Yet, Trudeau doesn’t need to look much further than Statistics Canada’s inflation numbers or last week’s call from the G7 for global “de-risking” to see how things are changing.

With the world entering a period of scarcity — from more expensive money to supply constraints — the rationale to juice the nation’s economy is weakening.

The housing crisis is a manifestation of that, as are broader price pressures and the Bank of Canada’s historically aggressive run of interest rate hikes.

Trudeau came to power in 2015 on an anti-austerity platform to reverse his Conservative predecessor’s sluggish growth record which, as the Liberals were quick to remind Canadians at the time, was the weakest since R.B. Bennett was prime minister in the 1930s.

The economics were sound at the time, even if the growth dividend didn’t pay off.

Canada’s economy was demand deficient early in Trudeau’s mandate as commodity prices slumped, while the extra spending helped ease financial stability risks by taking some pressure off the Bank of Canada to stoke growth.

Higher international migration drove gains in labour income and provided support to a housing market that was still largely within reach of affordability. Inflation wasn’t a worry. In fact, the concern for policymakers was it may not have been high enough.

New social programs, meanwhile, allowed the government to make significant strides on equality and redistribution — particularly with respect to lowering poverty.

The Trudeau administration’s weighty policy objectives were synergetic to the economic environment. Policies were rowing more or less in the same direction.

The current post-pandemic environment, though, is no longer as accommodating.

While many policymakers and economists still buy into a moderately optimistic outlook, with continued growth and inflation brought into check, less favourable outcomes are increasingly plausible.

There is a real possibility that inflation and interest rates will remain well above pre-pandemic levels, growth becomes more anemic, budget dynamics worsen and the climate transition proves costly.

Instead of working in concert, the government’s three core economic policy objectives — growth, equity and price stability — could become increasingly in conflict.

For example, increasing immigration is a long-term positive for an economy threatened by aging demographics. And more social spending is typically associated with less inequality.

But higher borrowing costs stoked by large increases in population and government spending will impact disproportionately lower income Canadians and young families, potentially creating divisions and threatening new sorts of inequality.

Add energy transition to the mix and national security issues and the landscape becomes a minefield.

The policy arena will be more ambiguous and the government pulled in multiple directions. Policy paralysis, wasted effort and poor allocation of resources are real risks.

There are certain fundamentals and policy guardrails, however, that can help the government navigate this challenge.

First, policymakers should prioritize growing GDP on a per capita basis and increasing productivity over expanding the overall aggregate economy. Both are important, but the former is where true prosperity lies and where Canada is failing. Masking underlying weakness with gains in national income is just a recipe for stagnant wages. Enhanced productivity also helps dampen inflationary pressures.

Second, toolkits and policy precision matter.

For example, supply side solutions are critical to productivity, but policymakers also need to be cognizant of short-term impacts in an inflationary world. Focusing more on economic migration and temporarily slowing the pace of new entrants to allow housing supply to catch up appears a reasonable solution to the current housing crisis.

Another example is industrial policy, which needs to become more sophisticated. Advanced economies will compete in advanced industries, where there is a concentration of R&D and skilled workers. Quick fixes through corporate subsidies, however, are not the answer. Canada needs a modern science and technology architecture that translates ideas into economic outputs, higher wages and better living standards.

The third guardrail is the most Canadian: be reasonable and pragmatic.

This seems obvious but we should not take this principle for granted, particularly as we rush (rightly) to meet ambitious climate targets. Canada remains a resource economy. The sector pays a lot of bills, keeps our currency stable and government finances flush with cash.

It’s also where any global power we may have as a nation lies. That makes an orderly climate transition paramount.

Theo Argitis is managing director at Compass Rose Group. Robert Asselin is senior vice-president, policy at the Business Council of Canada.

Source: Trudeau can’t keep juicing the economy with more spending

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“The Times They Are A-Changin’?” – Immigration debates and discussions

2023/05/29 Leave a comment

A few years ago, it was rare to find critiques of the government’s expanding levels of immigration, and the overall consensus among the provinces, business organizations and lobby groups, media and academics organizations in favour of this approach.

However, over the past year or so, there has been significant commentary questioning the approach given the impact on housing availability and affordability, healthcare and infrastructure. In addition to my 2021 Increasing immigration to boost population? Not so fast, former head of the British Columbia public service, Don Wright, wrote one of the stronger critiques, Will Trudeau make it impossible for Eby to succeed?

National unity and the demographic weight of Quebec in Canada has become a second major critique. A series of articles in Quebecor papers (LE QUÉBÉC PRIS AU PIÈGE PAR OTTAWA) highlighting an accelerating decline of Quebec’s population relative to the rest of Canada, reflecting different immigration rates has provoked considerable political debate and commentary in Quebec and English Canadian media.

While the Quebecor were written in an incendiary manner, the substance was correct. The approaches continue to diverge, there is, IMO, an unhealthy consensus in favour ot the current and projected levels of permanent and temporary migration among federal and provincial politicians, business organizations, academics among others.

Some of the commentary recognized that. Stuart Thompson the The Hub, A new era of immigration politics has started in Canada was one of the first to recognize the potential importance to immigration debates and discussions. Chris Selley chimed in, noting that Ottawa has no answer to Quebec’s anti-immigrant narrative. Campbell Clark stressed that Two solitudes emerging on immigration in Quebec, and noted the lame arguments on both sides of the debate. Formally, the Quebec government reject[ed] Trudeau’s immigration plan, fears decline of French.

The role of the Century Initiative received increased prominence given that these debates were happening around the time of one of its Globe and Mail sponsored conferences. Immigration Minister Fraser’s denial that the government had not adopted the 100 million population goal of the Century Initiative was met with understandable cynicism by Robert Dutrisac, Blanc bonnet, bonnet blanc, Konrad Yakabuski, L’«initiative du siècle» n’est pas l’idée du siècle among others, along with more reporting and analysis, Serons-nous vraiment 100 millions de Canadiens en 2100?.

English media commentary focussed more on the politics, with Chantal Hébert asking whether Hébert: Quebec’s separatists were searching for a way to revive their cause. Is this it? and Konrad Yakabuski, another rare journalist who writes in both English and French media, noting that François Legault’s anti-immigration crusade is coming back to bite him. Andrew Phillips in the Star dismissed Quebec concerns, framing it as a Panic attack in Quebec over immigration threat. Althia Raj, also in the Star, argued that: Pierre Poilievre is courting voters by capitalizing on immigration fears in Quebec, both discounting the substance of Quebec concerns and not questioning the federal government approach.

And of course most English language was focused on the less important issue of the passport redesign (not a fan, but my worry is that the controversy will make the government even more skittish about releasing the revised citizenship guide, Discover Canada, first promised in 2016).

Surprisingly, Andrew Coyne focussed more on Quebec, politics and demography, rather than contributing his usual economic take on issues. Almost a childish approach in 100 million Canadians by 2100 may not be federal policy, but it should be – even if it makes Quebec howl, largely ignoring the negative impacts on housing, healthcare and infrastructure and, more bizarrely, falling into the trap of overall GDP rather than productivity and per capita GDP (which most of his economic-related columns focus on).

All this being said, the Quebec government took advantage of the controversy to announce changes to its immigration program Six éléments à retenir des annonces de Québec en immigration, including increased levels to 60,000 new permanent residents while allowing ongoing temporary resident growth. This slight-of-hand was of course noted by Michel David, Et la lumière fut and Plus d’immigrants pour éviter une « louisianisation » ici ? 

This modest increase will not, of course, make any significant change to the ongoing divergence in population growth between Quebec and the Rest of Canada and Quebec’s relative weight in the country.

A recent Statistics Canada study, Unemployment and job vacancies by education, 2016 to 2022, highlighting the disconnect between immigration policy, which favours university-educated immigrants, and immigrant employment, which favours lower-skilled immigrants, provides another example of how our immigration policies appear more to be “policy-driven evidence” rather than “evidence-based policy.”

Questions on immigration levels have broadened from housing, healthcare and infrastructure impacts to the impact on the Canadian federation given the imbalance between Quebec and the Rest of Canada. A potential sleeper issue, parallel to Quebec’s relative share of the population is with respect to Indigenous peoples, given that high immigration levels dwarf Indigenous growth (visible minorities increased by 26.5 percent, Indigenous peoples by 9.4 percent, 2021 compared to 2016).

As I have argued previously, we need to find a way to have more productive discussions on immigration rather than the various solitudes between the “more the merrier” and “great replacement” camps (where most Canadians are). The disconnect between Quebec and the Rest-of-Canada is a long-term threat to the federation.

A focus on the practicalities – housing, healthcare and infrastructure impacts – is likely the best way forward and may provide a means to reduce the divergence between the “two solitudes.”

Ideally, of course, some form of commission examining demographics, immigration, and these impacts would provide deeper analysis and recommendations than current IRCC consultations or any other internal review.

To end with a quote from another favourite musician of mine:

Ring the bells that still can ring
Forget your perfect offering
There is a crack, a crack in everything
That’s how the light gets in

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Scofield: Believe it or not, Canada’s population will hit 40 million in June. It’s time we learned how to retain newcomers [IMO, also question levels and impacts]

2023/05/10 Leave a comment

Disappointing in that Scofield doesn’t question some of the assumptions behind the immigration levels and their support by the business community, education institutions and others. So much easier to turn up the immigration dial, so much harder to address housing, healthcare and infrastructure needs:

Canada’s population is about to break the 40 million mark this June.

Chief Statistician Anil Arora took to the stage last week to illustrate Canada’s surging society, and that number was his starting point for a very good reason.

Canada’s population is growing quite quickly by historical standards and compared to the rest of the world, and almost all of that growth is thanks to immigration. At the same time, it’s important to note that in any given year, there are thousands of Canadians who leave the country — either permanently or temporarily. You can actually see it happening in real time, thanks to a “population clock” built by Statistics Canada, which shows a couple thousand people per day coming into Canada mainly as immigrants or non-permanent residents.

And what’s true for the country is even more so for the GTA, the centre of the country’s vibrant and dynamic diversity.

The implications are far-reaching and profound, as Arora pointed out in the prestigious, annual Manion lecture to public servants — especially for the economy.

To make the obvious point, it’s essential that policymakers and employers alike anticipate the change coming at us, and make the most of it. That’s not lost on any employer desperately trying to fill job postings these days, nor is it lost on our political leaders.

Immigration Minister Sean Fraser and his entourage are travelling the country, looking for bold ideas for the long term, practical ideas for the short term, and tight timelines to deliver a new vision to his colleagues in cabinet.

At stake is our standard of living, our ability to compete with other countries, our regional development and, importantly, our ability to get along with one another.

Here are a few more numbers to add to Arora’s headline.

Last year, permanent residents coming into Canada reached a historic high, and the same goes for temporary workers. In other words, Canada has a healthy flow of people moving here for the long term, along with a more haphazard intake of stopgap workers whose future is uncertain.

Employers are scrambling to fill more than 731,000 positions right now, but this is down from the one million job vacancies that dominated the news last fall. The vacancies reflect an underlying labour shortage in Canada as the population ages and retirements pile up. But layered on top of that is an expected shorter-term slowdown in hiring as the country’s employers grapple with rising interest rates and stagflation.

House prices in the GTA were up four per cent in April but down 7.8 per cent from a year ago. Similarly, the volume of sales was up nine per cent on the month, but down 5.2 per cent compared to a year ago. In other words, Toronto homes are really expensive and the market is very much in flux. It’s a confusing array of short-term mismatches and long-term demographic trends that require a nuanced approach, if the country’s economy is to set itself on a growth trajectory.

There’s no doubt that we need a growing labour force over the long term, and that immigration is the source of that growth. There’s also no doubt that business leaders routinely list labour supply as their top challenge, and they’re constantly reassessing the mix of skills that they need. There’s no doubt that the challenge of expensive housing repeatedly throws a wrench in the best-laid plans. And there’s also no doubt that Canada’s reputation as a magnet for the world’s best and brightest is under pressure because other countries are mirroring our approach and taking us on.

Canada has fallen behind on key issues that impact our reputation, including administrative backlogs, inadequate housing, and poor recognition of foreign credentials. In the 2022 Global Talent Competitiveness Index, Canada fell to 15th place — down from 9th place in 2015, with its lowest scores for immigrant retention. 

Helpfully, the federal government separates out the “acute” short-term dynamics from the “chronic” longer-term pressures and is actively talking to business about how to collaborate and make sure the mix of newcomers adds to our ability to build homes, fill job vacancies and set the stage for longer-term productivity.

There’s talk of fast-tracking the flow of newcomers attached to trusted employers and trusted institutions such as universities. There’s creative thinking around how large-scale employers can work together to recruit pools of workers overseas. The discussion with professional organizations to streamline credential recognition is vigorous. And there’s some promising use of technology to speed up approvals in a way that also helps with matching people with jobs and smooths out integration.

And of course, on top of the push for speed and the right mix of workers, Canada’s immigration policy is also about a humanitarian approach to refugees and family reunification, as always.

We’re in the midst of a promising collective brainstorming around how — a brainstorming that will become more complicated in the next months as government drives towards decisions and as the economy slows down.

Luckily, most of the public, the government and business are on the same wavelength in making immigration work well for the economy, and the country as a whole.

Let’s keep that consensus in mind as policymakers and employers figure out how.

Source: Believe it or not, Canada’s population will hit 40 million in June. It’s time we learned how to retain newcomers

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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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Theo Argitis: Why economists – not politicians – are raising alarms around immigration

2023/04/20 Leave a comment

More questioning of increasing levels of immigration and their impact on housing and productivity, along with legitimate worry regarding ongoing support for high levels:
One of the most encouraging national polls in recent weeks was a survey done by Nanos Research for Bloomberg News that showed large flows of international migration into Canada continue to be widely supported by the public.
This is a relief. I’ve been worried, and not because I’m an immigrant.

Source: Theo Argitis: Why economists – not politicians – are raising alarms around immigration

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ICYMI – Keller: Why the Trudeau government was right to close Roxham Road

2023/04/11 Leave a comment

Good commentary pointing out the reality of trade-offs and the unreality of “open borders” and permanent residence for all:

If you’ve been dreaming of a guilt-free, morally pure, no-hard-choices solution to the problem of irregular border crossers into Canada, illegal border crossings in the United States, overwhelmed refugee determination systems in both countries and people smuggling in all directions, I offer you this simple answer: open borders.

Under open borders, anyone who wanted to move to Canada could. Simple as that. If 10 million immigrants wanted to come to Canada this year, then 10 million would.

There’d be no more refugee claimants sent back to the United States under the Safe Third Country Agreement. Anyone would be free to enter Canada, work as soon as they arrived, remain as long as they liked and become a citizen. There would be no need for an Immigration and Refugee Board to determine who is or isn’t a genuine legal refugee; there’d be no need for refugee claims at all. We would also get rid of Canada’s immigration points system, which gives priority to people with advanced educations and in-demand skills. We’d admit everyone, and give priority to no one.

There would be no annual immigration targets, such as this year’s target of 465,000 immigrants, including 266,000 economic immigrants, 78,000 spouses and children, 28,500 parents and grandparents and more than 92,000 refugees and compassionate cases. Under open borders, Canada would not select immigrants, and “no one is illegal” would not be a slogan. It would be the law.

While you ponder that, I should make it clear that I don’t think an open border is right for Canada. But unless you do, there’s no way to design an immigration system that doesn’t involve choices – sometimes hard and unpleasant ones – about who gets in and who doesn’t. There’s no avoiding it.

Many Canadians are uncomfortable with the closing of the Roxham Road-sized loophole in the Canada-U.S. Safe Third Country Agreement. I believe the government made the right move, but the discomfort of the critics is not without reason – real people are affected, and not in pleasant ways.

However, unless you go all the way to open borders, every approach to immigration and refugee policy involves at least some people who want to come to Canada being denied entry. It’s inevitable.

The Roxham Road loophole was not a principled response to any of that. A Canadian family hoping to bring in their grandparents still had to apply from overseas and wait in a queue. Ditto regular immigrants from overseas. Same story for refugee claimants from Syria or Afghanistan in a refugee camp.

But if you were from a country where U.S. visa rules are loose enough, and you had enough cash for a plane ticket, you could fly to the United States and then slide into Canada’s refugee-determination system at Roxham Road. Or if you were able to get to Mexico, make it across the U.S. border and then head north, you could similarly jump the queue and make your claim directly on Canadian soil.

But every successful refugee claim at Roxham Road was quietly but effectively reducing the number of spots available to people in refugee camps an ocean away.

What’s more, unless our policy is that everyone who claims asylum gets asylum, we need some sort of legal process to figure out who is a refugee and who isn’t. Canada has such a system and, after detailed investigations that tend to last for years, it finds that many refugee claimants are not refugees, and orders them deported. That’s what happened to one of the families that recently died trying to illegally cross from Canada into the United States though Akwesasne Mohawk territory.

And then there’s the underpinning of our entire immigration strategy. The Trudeau government aims to raise immigration to 500,000 permanent residents a year by 2025 – roughly double the level under the Harper and Chrétien governments. That move was justified in 2016 by the government’s Advisory Council on Economic Growth as a plan for, well, economic growth. A higher population, said the council, would expand the economy, but only if new immigrants are more productive than average Canadians will each slice of pie grow faster than the number of forks. If immigrants are less productive than Canadians, the number of forks will grow faster than the pie.

“An increase in overall economic output (GDP) is a positive thing for Canada,” wrote the council, “but only if the expansion translates to a rise in living standards for the average Canadian (GDP per capita). This goal can be achieved by focusing the recommended increase in immigration flows among educated and highly skilled workers, and those with specialized skill sets lacking in Canada.”

In other words, Canada’s immigration policy is not just about having more Canadians, but more educated, skilled and productive Canadians. To do that, newcomer immigrants have to be mostly young, educated and skilled. One big knock against the Liberal government is that while many new immigrants meet the criteria, too many do not. Immigration can raise everyone’s living standards, but only if we’re selective about who we let in, and who we do not.

To govern is to choose. There’s no getting around it. Nowhere is that more true than at the border.

Source: Why the Trudeau government was right to close Roxham Road

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Wudrick: Canada needs immigration reform that is fair and constructive

2023/03/08 Leave a comment

Right-leaning outlets cautioning on the risk to the social consensus in favour of immigration, particularly perceptions of queue jumping. But not xenophobic to raise these and other concerns:

Much has been written recently on rising concerns about Canadian immigration levels, and specifically the Trudeau government’s announcement of significantly higher immigration targets. As commentators have noted, Canada has historically had cross-party consensus on immigration that can be legitimately described as a uniquely Canadian phenomenon.

This good news has been a point of Canadian pride (or smugness) in a time of global political turbulence, given that in many of our peer countries, immigration backlash has manifested itself in sometimes ugly and xenophobic ways.

But here’s the bad news: This consensus is at risk, and may already be little more than a mirage. It’s consoling that immigration skepticism has not coalesced around any single political party, where it could become a political wedge issue. But fraying support for immigration across party lines exposes an even greater risk: that the issue will be ignored by all parties until it reaches a dangerous boiling point.

Part of the challenge is that Canadians concerned about immigration are often afraid to say so out loud for fear of being called racist or xenophobic. And to be clear, there are racist and xenophobic Canadians, as in every country. But it would be a colossal mistake for our political class to wave away any misgivings about our immigration policy as mere prejudice.

Politicians must understand some of the factors that stoke concerns with our policies and targets. Start with the Roxham Road border crossing between New York State and Quebec, where unlawful (irregular) refugee crossings have skyrocketed in recent years. Recently, news broke that New York City is paying for bus tickets to help asylum-seekers reach the border.

Roxham Road matters because it is about fairness. It represents a legal loophole that people are exploiting. Refugees are a legitimate humanitarian issue, but allowing a class of people to essentially “skip the line” will undermine support for a rules-based system that the public can believe is fair to all.

Second, for many Canadians the concern is not who is coming, so much as how many: for a population already dealing with serious supply strains, immigrants represent a demand spike that will only worsen the situation. Housing is an obvious example; so is access to health care. Just ask the six million Canadians who cannot find a family doctor.

Some argue, fairly, that new immigrants actually represent part of the solution to these supply challenges, providing much-needed additional labour, from construction workers to nurses and doctors. But such tangible factors are not used to inform government immigration targets, which smack of central planning. Perhaps it’s time we shifted away from immigration by fiat and adopted a more market-based approach.

Consider the relative success of refugees to Canada based on their path of entry. Experience shows that privately sponsored Syrian refugees have a better chance of finding employment than those brought in under government programs. This suggests that when migrants have non-government partners invested in their success, their integration into Canadian society is likely to go more smoothly.

While humanitarian refugees require sponsorship and charity from individual Canadians and communities, for many economic immigrants the relevant invested partner will be employers who, given labour supply challenges, are often among the loudest champions of high immigration levels.

Here, too, a legitimate criticism is often raised, since efforts by employers to create cheap pools of labour can drive down wages for all Canadians. But this blurs the immigration discussion with a separate issue: the difference between employers unwilling to pay higher salaries, and those who simply cannot find job candidates at any economically viable salary level.

Canada’s immigration consensus has served our country well for half a century. If we are to salvage it, we will need to listen to those with legitimate concerns about high immigration rates — and more importantly, adjust our approach away from government targets towards a system that prioritizes matching our supply of and demand for immigrants and refugees as smoothly as possible.

Aaron Wudrick is Director of the domestic policy program at the Macdonald-Laurier Institute.

Source: Wudrick: Canada needs immigration reform that is fair and constructive

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John Pasalis: Canada’s immigration policies are driving up housing costs

2023/02/04 Leave a comment

Although correlation is not causation given that other factors given domestic migration (rural to urban, interprovincial) and housing policies, high immigration levels are one of the more significant factors. Signal that some of the various analyses and commentary making the link are becoming more widespread, with Pasalis challenging a “third rail” of Canadian politics, immigration:

Ask a Canadian why home prices are so high and you’ll certainly get a whole host of answers from foreign buyers to greedy investors and, up to recently, a long period of low interest rates.

But the most common answer you are likely to hear is that a lack of supply of new housing in Canada is the primary cause of the high cost of housing.

The lack of supply narrative has been the dominant explanation for high home prices in Canada over the past five years. Every level of government in Canada cites a lack of supply as the primary cause for high home prices and countless academic and bank economists have made the same argument. Scotiabank’s chief economist went so far as to argue that a lack of supply was the underlying cause “for rising prices and diminished affordability”. When an economist says A causes B they mean that the relationship is a statistical fact rather than an opinion.

The debate regarding the key drivers of high home prices has been so one-sided it led Howard Anglin, former deputy chief of staff under Stephen Harper, to write a column in The Hub in 2021 titled, “The one factor in the housing bubble that our leaders won’t talk about.”

What’s the one factor not talked about? How Canada’s immigration boom is impacting the demand for housing and, by extension, increasing the cost of housing.

Over the previous decade, Canada admitted roughly 275,00 new immigrants each year. In 2022, Canada saw a record 431,645 new permanent residents and this number is expected to reach 500,000 annually by 2025.

An unequal two-sided problem

When considering these two demand and supply factors alone, demand for homes due to changes to Canada’s immigration level and the lack of supply of new homes to meet this demand, we see an interesting phenomenon. One factor, the lack of supply, has been discussed for many years, and year after year, political efforts to mitigate this issue have failed. The other factor, immigration, is one that policymakers have far more control over.

Policymakers don’t have any direct control over the number of new homes developers launch and complete each year, a number that has always been hard to achieve due to labour shortages and other factors, and is only expected to decline in the years ahead due to higher interest rates and the current economic uncertainty.

So why has the debate about the high cost of housing focused on a solution that policymakers have no direct control over, building more homes, as opposed to addressing the demand for housing from changes in our immigration level, something policymakers have direct control over?

I’ll highlight what I believe are the two primary reasons.

The false lure of the zoning panacea

A popular area of academic research has been to explore the role that local zoning policies have on the supply of new housing and home prices, and the academic conclusions on the surface sound very intuitive.

Municipalities that have relatively few zoning restrictions on the supply of new housing tend to have more affordable homes and experience more moderate growth in house prices because builders can more easily adjust to changes in demand by building more homes. Academics also argue that these cities with few zoning restrictions have fewer and shorter housing bubbles.

I’ll admit, it’s a wonderful story! If cities simply remove zoning barriers to new housing, builders will flood our market with new homes putting an end to years of rapid price growth and leaving us with an affordable housing market for all.

Unfortunately, the academic theories don’t hold up very well in the real world. Many of the cities that economists cite as having relaxed zoning policies which, in theory, should see modest price growth, such as U.S. cities like Houston, Atlanta, and Charlotte, have all seen a significant surge in home prices over the past decade. Cities like Phoenix in the U.S. and Dubai more globally which have relatively relaxed zoning policies experienced housing bubbles during the first decade of the 2000s because the supply of housing wasn’t able to keep up with the sudden surge in demand from investors.

The fact is that even with relaxed zoning policies, it’s very hard for the construction sector to respond to a rapid surge in demand for housing.

A report by the Bank of Montreal found that countries with higher rates of population growth also saw the most rapid increase in home prices, a result that is intuitively obvious, and one we are seeing in Canada. While it’s very easy for our government to double the number of immigrants moving to Canada each year, it’s extremely hard for them to double the number of homes being built to house these new Canadians. When housing completions don’t increase enough to match a country’s immigration goals, the result is what we are experiencing in Canada: a spike in the cost of housing.

Despite the evidence, the solution to our housing crisis promoted by our policymakers and expert economists continues to be rooted in the delusion that housing supply can respond to any sudden surge in the demand for housing if we simply reform zoning policies.

This does not mean supply-side reforms that encourage more housing and more density are not important, they are. But supply-side policies alone are not the panacea to our housing crisis that some academics and economists make them out to be.

A politically sensitive issue

The other likely reason that many economists have argued that a lack of supply is the cause for high home prices is because any suggestion that Canada’s record high immigration levels may in fact be the bigger driver of home prices runs the risk of being called xenophobic. I’ve experienced this myself from self-described “housing advocates” who believe that with the right zoning reforms, there is no limit to how many homes Canada can build.

But questioning what is the right level of immigration for our country, and whether the current level is doing more harm than good, isn’t xenophobic at all. It’s a critical policy question that for a long time has been ignored out of fear that one might be called a racist for even raising the question.

But the times are changing.

Over the past month we have seen a significant shift in this discussion. More journalists, economists, and editorials are questioning the goal of our federal government’s immigration strategy and whether their current immigration targets are doing more harm than good.

After years of silence regarding the impact our government’s immigration policies are having on healthcare, housing, and wages, more and more experts are starting to ask some very important questions. And not surprisingly, in virtually every column the author clarifies that they are not xenophobic or against immigration, but are noting some of the negative side effects of our country’s aggressive immigration strategy.

Why are more experts starting to talk about our government’s immigration targets?

It’s becoming clearer that the federal Liberal government’s strategy to nearly double the number of immigrants admitted to Canada each year without making the necessary investments to support them is straining our housing markets and health-care system.

A demand crush that further hurts renters

The other important factor is that many of the negative side effects of Canada’s immigration strategy are starting to be felt most by the poorest and most marginalized communities in Canada—including many of these immigrants themselves.

While the discussion about Canada’s housing crisis often centres around the high price of homes and its impact on first-time buyers, a bigger concern should be how our government’s policies are driving up the cost of renting as renters typically have much lower household incomes as compared to homeowners, and unlike homeowners they don’t benefit financially from the rising cost of housing.

To provide some context to the recent acceleration in rents, it is helpful to compare how average rents have changed before and after the current Liberal government took office in 2015.

Under the previous federal Conservative government, the average rent for a Toronto condominium went from $1,570 in 2006 to $1,866 in 2015, a $297 (or 19 percent) increase in nine years. In contrast, average rents under our current Liberal government have climbed from $1,866 in 2015 to $2,657 in 2022, a $791 (or 42 percent) increase in just seven years.

Am I suggesting that our current government’s change in immigration policy alone is responsible for this outsized increase in average rent in Toronto? Of course not, but of the most common explanations for the high cost of housing, from foreign buyers to low interest rates and even irrational exuberance, this one has the most direct impact on rents.

Calculating the demand and price of a property is more complex as the source of capital and the cost of debt are all important factors, alongside the usual factors such as the number of households requiring housing. Rent, on the other hand, is simply the cost of housing services, a cost more closely linked to the demand and supply for housing services, and not as impacted by other factors.

It’s worth noting that the higher appreciation in condo rents since 2015 was not due to a lack of building. Average annual condo completions were 12 percent higher after 2015 when compared to the period before 2015. This additional supply didn’t cool condo rents because Canada’s population was growing faster than these housing completions.

The impact of—and on—foreign students

The other aspect of Canada’s immigration policies that is often overlooked is the growth in the number of international students attending universities, which are not directly included in Canada’s immigration numbers today. An important part of Canada’s immigration pipeline, the number of foreign study permit holders in Canada has climbed from 352,330 in 2015 to 621,565 in 2021.

The Globe and Mail’s Matt Lundy argues that there is a simple explanation for this boom in foreign students: money.

The annual tuition for foreign students is five times what domestic students pay, so post-secondary institutions are doing what any profit-maximizing corporation would do: they are admitting as many foreign students as they can.

But unlike Canada’s program for permanent residents, there are no targets for foreign study permit holders—post-secondary institutions can admit as many students as they want each year. But while these institutions have the right to maximise their profits by admitting as many foreign students as possible, they have no obligation to ensure there is adequate housing for the students they are admitting. The lack of planning and investment from post-secondary institutions into the housing needs of their students means that the burden of Canada’s housing crisis has fallen in part on these often financially stretched students who are moving to Canada for a better life but are left feeling exploited. When foreign students are fighting for the most affordable rentals in their community, it also puts pressure on low-income households looking for the same.

It’s time to start asking harder questions about the negative side effects of Canada’s immigration policy. As economist David Green wrote, immigration is not some magic pill for saving the economy.

John Pasalis is President of Realosophy Realty, a Toronto real estate brokerage that uses data analysis to advise residential real estate buyers, sellers, and investors.

Source: John Pasalis: Canada’s immigration policies are driving up housing costs

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