Canada needs more immigrants — and not only for the economy

Good nuanced commentary and the need for a broader lens than just demographic and economic:

There’s a problem in persistently defining immigrants as economic drivers that will take Canada to a more prosperous place.

It’s not that the pitch is wrong.

It’s that it is myopic, and it’s pushing Canada to evaluate the movement of people as a pure dollars-and-cents exercise. And that’s short-sighted at a time when we need all the compassion we can get.

Canadians’ impressions of their country as an open and tolerant nation that thrives on diversity have been deeply challenged over the past two weeks — first with the discovery of the remains of 215 children in unmarked graves at the site of a former residential school in Kamloops, B.C., and then by what police say was an intentional attack on a Muslim family in London, Ont. that left four people dead.

“There’s a growing feeling that we aren’t holding together as best we should,” says Sen. Ratna Omidvar, a vocal proponent of ramping up immigration — and in a way that is not just about economics.

“We need to be more intentional about social cohesion,” she says.

Repeatedly making the case for increasing diversity almost solely on an economic basis doesn’t help — as the federal Liberals themselves used to sense.

In 2016, a group of influential economic advisers led by Dominic Barton, now Canada’s ambassador to China, came up with a list of strategies to ensure Canada’s prosperity over the long term — a list that carries weight to this day. Barton told the federal Liberals that among other things, they should dramatically ramp up immigration as a way to propel Canada’s economy forward

A few cabinet ministers thought it was a great concept at first, but even as the Liberals embraced most of Barton’s other growth recommendations, they eventually balked at the idea, unsure of their ability to sell the public on a complex argument.

Five years later, however, not only are they making the argument, it’s almost to the exclusion of anything else when it comes to immigration. And yes, it’s complex.

Canada’s economy isn’t growing fast enough to maintain our standard of living and fund all the social safety nets we have come to expect, it goes. Plus, labour shortages are all around us, and if they’re not here now, they soon will be.

Since Canadians are retiring faster than they can reproduce, we need to replenish the workforce and bolster the financial foundation of our social safety net by adding many, many more immigrants.

The pandemic set us back in our immigration plans because of closed borders, but the federal government is now actively making up for lost time and then some — a key plank in the recovery strategy. The economic messaging is central — everywhere in Immigration Minister Marco Mendicino’s comments in the House and speeches to the public, the policy documents issued through the immigration department and the pitches Liberal MPs make to their constituents. 

Immigrants create small businesses, fill job vacancies, make our health-care system work, spend money, and support their children to make more money than they did, the message goes.

While Omidvar makes those arguments herself, she says there’s a danger in thinking narrowly.

“You make it about one thing only,” she says. “We have turned immigration into too much of a transactional experience.”

She talks about her own experience moving to Canada from Iran in 1981 and finding her way by joining a local gardening club and planting daffodils with her neighbours.

While she appreciates all the politicians’ speeches about diversity and inclusion in the wake of the London attack, she warns that social cohesion — an essential for quality of life, economic and beyond — comes from a community-based, proactive approach and not the reactive approach she has seen on display over the past couple of weeks. And that means a focus on immigrants as whole people who are valuable members of our communities.

Economist Mikal Skuterud, a professor at the University of Waterloo, doesn’t buy many of the economic arguments around immigration that the federal government is making these days. “It’s hyperbolic, it’s completely exaggerated, and it’s not honest in a lot of cases,” he says.

He argues that immigration could bolster Canada’s prosperity if newcomers are more productive than existing workers, but that’s not always the case. He also points out that if immigrants have the same age distribution as the existing workforce, they won’t do much to change the way the labour force pays for a growing contingent of retirees.

But he does agree with Omidvar that it’s important to evaluate immigration on factors that go well beyond labour and economics, especially if we want to enrich our culture and not just our wallets.

Public opinion polling suggests that Canadians generally view immigration as beneficial to Canada, but the top reasons people give for being pro-immigration are around diversity and multiculturalism. Contributions to the economy come second, says Andrew Parkin, executive director of the Environics Institute for Survey Research. 

For the sake of social peace, perhaps our political rhetoric should take its cue from the public in this case.

Source: https://www.thestar.com/politics/political-opinion/2021/06/10/canada-needs-more-immigrants-and-not-only-for-the-economy.html

Mahboubi, Skuterud – An Economic Reality Check on Canadian Immigration (Part I), Part II link

Good and needed critical thinking regarding the limitations and weaknesses of the government’s immigration plan and approach:

COVID-19 travel restrictions hobbled Canada’s immigrant admissions in 2020. In response last fall, the federal government revised its 2021 targets upwards, saying it was necessary for our economic recovery.

Showing its commitment to the ambitious target, on February 13 the government issued invitations to a record-breaking 27,332 applicants in its Canadian Experience Class (CEC) program, which targets applicants with Canadian work experience, and are therefore more likely to be living in Canada.

But to issue so many invitations, it was forced to drop its Comprehensive Ranking System cut-off score in its Express Entry system to an all-time low of 75, far below the previous record of 413. This strategy is analogous to a university doing away with entry standards to significantly boost enrolment. If history is an indicator, there is good reason for concern.

The primary objective of Canada’s economic-class immigration programs is to leverage immigration policy to boost the economic well-being of Canadians. To do that, we need immigration inflows to raise GDP per capita, not simply increase the population.

To assess if we are achieving this objective, Canadian researchers examine earnings of new immigrants. Since workers’ earnings comprise roughly two-thirds of GDP, we need new immigrants to earn more than the national average if we are to raise GDP per capita.

Unfortunately, the evidence is that Canada has historically struggled to achieve this objective, and continues to struggle. The hard reality is that we saw a substantial deterioration in the earnings of subsequent cohorts of new immigrants and an increase in their relative poverty rates from the early 80s to the early 2000s.  

This prompted numerous reforms of skilled immigration policies since 2005, primarily directed at improving immigrant selection, including introducing pre-migration mandatory English/French language testing and education credential assessments. A key piece of the policy reform was the 2015 introduction of the Express Entry system.

Rather than admit applicants who have met the minimum requirements of one of Canada’s economic-class programs on a first-come, first-served basis, the Express Entry system skims the cream of the applicant pool on a regular basis using a tool known as the Comprehensive Ranking System (CRS). The CRS assigns each applicant a score between zero and 1,200 using a set of criteria, including age, education, and work experience. The factors and their relative weightings were determined by a statistical analysis predicting immigrants’ earnings during their first 10 years in Canada.

While there is evidence that these reforms have helped curtail the deterioration in immigrants’ earnings, they continue to experience significant economic integration challenges. For example, a recent Statistics Canada study shows that international students who graduated in 2010-2012 earned considerably less than domestic graduates in their first five years after graduation.

Shortfalls of former international students are also evident when their earnings are compared to domestic graduates with similar degrees in similar fields of study.

The economic challenges of Canadian university-educated immigrants are, in fact, exceptional. Whereas university-educated immigrants from India who settle in the United States outperform their US-born counterparts with similar education, the average earnings of Indian-born university-educated immigrants in Canada fall significantly below their Canadian-born counterparts. This reflects the continuing truth that US universities and salary premiums attract the world’s best and brightest while Canada’s relatively generous welfare state attracts migrants less sure of their talents.

Examining the 2016 earnings of recent immigrants admitted under an economic-class program, we find that CEC principal applicants had higher average earnings than the non-immigrant population. When we also include their spouses and dependants, their combined average earnings were only slightly lower than prime-age non-immigrants (Figure 1). This small difference reveals both the success of Canada’s CEC program, but also the risk of forgoing CRS standards to reach immigration targets.

Immigration, Refugees and Citizenship Canada (IRCC) has held 170 Express Entry draws since January 2015. The median CRS cut-off score in past draws was 461 and has never dropped below 413. Lowering the standard to 75 means admitting immigrants who will experience more significant economic-integration challenges. Doing so during an economic crisis with high levels of joblessness seems ill advised.

In the government’s defence, all 27,332 CEC applicants who received invitations in February’s draw have at least one year of Canadian experience, and it is likely that a high percentage are currently employed, and in all likelihood many close to the front line during the pandemic. There are unquestionably compelling ethical reasons for providing these workers and their families with pathways to permanent residency.

But there is a risk in using economic-class programs to achieve humanitarian objectives; it compromises the ability of the Express Entry system to achieve its economic objectives.

The Tinbergen Rule says that for every policy target there should be at least one policy instrument. When there are fewer instruments than targets, the ability of policy to achieve its targets is compromised. Let us make sure that all our immigration programs do at least one thing well, instead of everything badly.

Tomorrow, we examine the potential consequences of increasing immigration during the crisis.

Source: https://www.cdhowe.org/intelligence-memos/mahboubi-skuterud-–-economic-reality-check-canadian-immigration-part-i

Part II: https://www.cdhowe.org/intelligence-memos/mahboubi-skuterud-–-economic-reality-check-canadian-immigration-part-ii

Douglas Todd: Economists question decision to boost immigration during pandemic

Good and needed questioning:

Canadian economists are questioning why Ottawa is setting record immigration targets in the middle of unprecedented unemployment caused by the pandemic.

More than 1.7 million Canadians are looking for work, and the economists are warning that the Liberals’ aggressive new target of more than 400,000 new immigrants in 2021 will likely hurt the country’s low-skilled workers, particularly those who have recently become permanent residents.

Source: Douglas Todd: Economists question decision to boost immigration during pandemic

Canada lowers threshold for immigrants to get permanent residency

Money quote by Mikal Skuterud: “What the government did on Saturday is signal very clearly, our only objective here is to hit the target,” rather than a substantive policy rationale:

Ottawa has made it easier for thousands of immigrants living in Canada to become permanent residents, a sign that policy makers are focused on hitting an aggressive target for 2021 after last year’s intake fell way short because of the COVID-19 pandemic.

Immigration Canada invited 27,332 people to apply for permanent residency through Express Entry, a system designed to approve applications in six months or less. The candidates were part of the Canadian Experience Class category, which requires immigrants to have at least one year of recent work experience in the country.

The weekend invitation was more than five times larger than the typical draw under the program. Draws tend to happen every couple weeks and usually result in just 3,000 to 5,000 invitations. This time, to send out significantly more invitations, Immigration Canada slashed the number of points required to get an invite.

Nearly all of those people – 90 per cent – are already living in Canada, the federal government said. The move reflects efforts by Ottawa to prioritize those already in the country to add 401,000 new permanent residents in 2021, a target that has been complicated by border restrictions because of COVID-19.

Canada is coming off an exceptionally weak year for immigration. Roughly 184,000 new permanent residents were added in 2020, the lowest since 1998, and well short of the 341,000 target. To make up for that setback, Ottawa has ramped up its intake goals for the next three years.

Express Entry is one avenue for becoming a permanent resident. In gaining entry to that pool of candidates, people are assigned a score that’s based on a number of factors, including English or French language skills, age, education and work history.

For each draw, a cut-off score is set. Typically, the minimum score for those in the Canadian Experience category is above 400. Successful candidates were often younger than 30, had strong language skills, advanced degrees and extensive Canadian work experience.

This time, however, the points threshold for the weekend draw was just 75, essentially allowing all available candidates to qualify.

For many observers, the lowered cut-off was a seismic event for the Express Entry system. Mikal Skuterud, a University of Waterloo economics professor, likened Saturday’s move to a university dramatically lowering its grade requirements to boost enrolment.

“What the government did on Saturday is signal very clearly, our only objective here is to hit the target,” he said.

The abrupt shift sent immigration lawyers scrambling to contact clients on the weekend who had been advised to hold off on applying because their scores were considered to be too low.

The changes open a path for many immigrants to become permanent residents who may have otherwise struggled, such as people in their 40s and older and who may have a bachelor’s degree or less education, said Mark Holthe, an immigration lawyer in Lethbridge, Alta., who specializes in Express Entry applications.

“These people are here. They’ve been working, they’ve been paying taxes, they speak the language, they’re adjusted,” he said. “They’re quality candidates every bit as much as those with super-high human capital.”

But the weekend draw also cast uncertainty over the Express Entry system, raising questions about whether Ottawa intends to keep its criteria lowered for future draws, or boost targets for other immigration streams.

“What the government has done is basically throw away the playbook,” said Toronto immigration lawyer Sergio Karas. “They have really transformed the Express Entry system into a lottery ticket. The message that has been sent overseas is that this is a government that is desperate to meet their quotas.”

Mr. Karas said the aggressive targets in this recent draw have exhausted the pool of domestic candidates in the Canadian Experience Class program, meaning future draws will likely have to target people living overseas.

Prof. Skuterud questioned the timing of Ottawa’s immigration push, given tough labour conditions during the pandemic. As of January, there were nearly two million people who fit Statistics Canada’s definition of unemployed – largely, that one must be available and searching for work – while another 700,000 wanted work but weren’t looking.

“The evidence is overwhelming, that immigrants who enter labour markets during recessions … struggle more than immigrants who don’t,” he said. By lowering the points cut-off, “that means having immigrants who are going to struggle more.”

The sheer size of the weekend draw is also likely to upend immigration targets set by various provinces under the Provincial Nominee Program, which frequently draws from the same pool of domestic candidates. The Alberta government, for instance, had planned to restrict its provincial nominees to only those immigrants already working in Alberta.

“Instantly their whole pool of candidates is going to be gutted,” Mr. Holthe said. “They’re going to have to look at people that are outside of Canada now, I believe, in order to meet those targets.”

Source: https://www.theglobeandmail.com/business/article-ottawa-goes-on-blitz-to-boost-immigration-make-up-for-pandemic-induced/?utm_medium=email&utm_source=Morning%20Update&utm_content=2021-2-17_6&utm_term=Morning%20Update:%20Canada%20lowers%20threshold%20for%20immigrants%20to%20get%20permanent%20residency&utm_campaign=newsletter&cu_id=%2BTx9qGuxCF9REU6kNldjGJtpVUGIVB3Y

Heather Scoffield: Hey, election-weary Americans, Canada would love to take you in

Valid approach to target foreign nationals currently working or studying in the USA:

In the difficult, bewildering days right after Donald Trump won the presidential election in 2016, then-vice-president Joe Biden made a quick trip to snowy Ottawa for a state dinner.

It’s worth remembering what he told Canadian leaders at the time: Canadians and Americans are deeply united in their values, Biden said, especially “the abhorrence of the abuse of power, whether it’s physical, economic or political, as well as the notion that every person deserves to be treated with dignity.

“It’s about dignity.”

The words were probably meant to console Canadians as much as to console himself at the turn of events and the coarsening of politics that a Trump victory would surely herald.

Fast-forward four years, and the day after the 2020 election was equally bewildering for many Canadians who could not digest the fact that, regardless of who the eventual president is, about half of American voters chose Trump for a second time.

But when we’re done reeling over the stark, pervasive divisions within the American electorate and move on to grappling with what next, perhaps we can put our own appreciation of dignity to good use, and make it work to our advantage — through immigration.

Just last week, Immigration Minister Marco Mendicino set out a very ambitious plan for Canada: to boost immigration to never-seen-before levels and pull the country’s economic growth out of its funk.

“We are at a unique juncture in Canadian history. We are facing the challenge of our generation, and we will meet our moment,” Mendicino said. “Before the pandemic, our government’s goal to drive the economy forward through immigration was ambitious. Now, it is simply vital.”

Canada will aim to bring in 1.2 million new immigrants over the next three years, partly to make up for lost ground during the pandemic but also raising the target substantially from previous plans. Instead of 351,000 people targeted for 2021, Ottawa is now aiming for 401,000. Instead of 361,000 in 2022, Ottawa hopes for 411,000.

For sure, there are many reasons to increase immigration. Family reunification and a safe haven for refugees are what dignified, decent countries do. But since the federal government’s overriding goal is to boost the economy, it’s time to take a strategic look at the U.S. landscape.

Of course, the move-to-Canada idea was all the rage after the 2016 election, and especially after Trump kicked off his term in power by cracking down on immigrants from specific countries — a move that prompted Justin Trudeau to famously tweet #WelcomeToCanada because “diversity is our strength.”

The Canadian dream bubbled up again on Wednesday in the media and on social media.

But initial efforts over the past few years to recruit large numbers of skilled immigrants from the ranks of disaffected Democrats didn’t really materialize.

We have a second chance this time around and can take steps, and have money, to make it happen.

“There is an opportunity there,” says Mikal Skuterud, an economics professor at the University of Waterloo who specializes in immigration and labour.

Not all immigration automatically boosts Canada’s pace of growth, which is why Mendicino is putting more weight on the economic class of immigration than on family reunification and refugees. The hope is that by attracting skilled workers from other countries, Canada can expand the population of entrepreneurs, consumers, taxpayers, homebuyers, hard workers and wealth contributors in our economy.

People educated in the United States come with easily recognized credentials and are a quick fit into Canada’s labour market.

“If you want to leverage immigration for economic growth, you have to look at talent,” Skuterud says.

But Canada has long had stiff competition from the Americans next door in attracting those people, he adds, pointing to research that shows skilled immigrants to the United States prospering while those with a similar profile in Canada have struggled with lower wages.

Canada’s best bet to attract highly-skilled immigrants from the United States is to look there for foreigners and migrants, especially students and recent graduates, since they’re usually more mobile than the rest of the population, says Skuterud.

If Canada is to bolster growth over the long term, not just to recuperate from the pandemic but also to improve our standard of living and our ability to care for the most vulnerable in our society, we will need to make some bold, strategic moves to make our mark.

So much of Canada’s policy and recovery from the pandemic is in slow motion right now, waiting to see where Washington lands and how the U.S. political dynamic washes over the border.

Immigration is one area where we have already dared to stick our neck out and go our own way, at least in the targets and the rhetoric that comes from our political leaders. Dignity looks like a selling point these days.

Source: Heather Scoffield: Hey, election-weary Americans, Canada would love to take you in

Which workers are being hit hardest by the COVID-19 lockdown? These 6 graphics paint a stark picture of Canadian inequality

Good analysis and series of charts (go to article link for charts) by Mikal Skuterud showing the different groups most affected:

The COVID-19 lockdown is proving to be a “highly unequal economic shock,” hitting not only low-wage hourly workers the hardest, but also women in non-unionized jobs, according to an analysis of Statistics Canada labour force data by Waterloo professor of economics Mikal Skuterud.

The data also shows women with small children are losing more hours of work, compared to those with older kids, and that self-employed workers, who include small business owners, are feeling the pinch much more than employees in the private or public sector.

Skuterud says many of those jobs may be lost forever and the impact of those losses will widen the gap between the “haves” and the “have nots.”

This recession “has hit lower income people and families, more than people like me,” says Skuterud, who continues to work from home. “It’s been very unequal. And that’s a concern.

“The question is what’s this going to do to inequality.”

By his estimates, three to five million workers in Canada have been affected and Skuterud believes many of those people will not go back to the jobs they once did.

“People are going to have to move and find jobs in other sectors, and maybe these are sectors where they don’t have the skills they need,” says Skuterud. “All of this is going to become a big issue coming forward.”

Skuterud’s analysis is based on Statistics Canada’s labour force survey from April. The survey, of up to 60,000 people, is done each month online or by phone. Like the census, participation is mandatory under the Statistics Act.

Not your traditional recession

Typically, recessions come from the demand side of the market, says Skuterud. Consumers stop buying goods, companies don’t need to produce as much and, when production slows down, they lay off workers.

In the COVID-19 crisis, workers were told to stay home practically overnight.

And instead of the typical job losses in manufacturing and construction, the initial economic shock is happening in jobs where people have human interactions, says Skuterud.

A lot of those jobs are in the lower-wage service and retail industry, with lower hourly wages, where the workforce is predominantly female, he says.

“The financial crisis of 2008 didn’t happen overnight. It just wasn’t nearly the same magnitude, not nearly as many workers were affected as this.”

Non-unionized women hit hardest

The biggest job losses are in areas with human interaction, such as cashiers or any kind of retail. “It’s the type of jobs that women are concentrated in and lower wage workers are concentrated in,” says Skuterud.

Job losses among non-unionized women paid by the hour have been three times larger than among unionized women paid by the hour, such as nurses, says Skuterud.

As a result of the lockdown, women with young children have experienced the biggest loss in total working hours.

“We know from lots of research that caregiving falls on women,” says Skuterud. “For sure that’s what’s happening.”

Women in science have complained of not being able to work as much as their male counterparts during the pandemic and, in the university environment, Skuterud has noticed a bigger decrease in the number of academic papers from women compared to men.

He says it’s critical to address child care when we begin to turn the corner.

How families are faring

In general, recessions hurt families more than individuals, often because spouses work in the same sector and layoffs affect both spouses.

Skuterud says that’s not happening this time around, although the percentage of couples who’ve both lost their jobs went up from February to April this year.

In “this recession, the effect at the individual level has been massive,” he says.

Self-employed workers

Hours on the job for self-employed workers dropped by nearly 50 per cent between mid-February and mid-April, and private sector workers experienced a higher proportion of job losses.

“There are a lot of self-employed people: marginal business owners, workers in the gig economy, people driving Ubers,” says Skuterud. “These people have really been hit hard.”

“Going forward it will be interesting to see how many people move into self-employment,” he says. “And not because there’s good opportunity, but because of survival.

“There’s going to be more and more people looking for those jobs just to survive.”

Impact biggest in people who rent

From February to April 2020, a larger proportion of people who rent lost their jobs compared to people who owned their own homes.

It’s another indicator “that the recession has really hit lower income people harder,” says Skuterud. “That’s the bottom line in all of these charts.”

Source: Which workers are being hit hardest by the COVID-19 lockdown? These 6 graphics paint a stark picture of Canadian inequality