ICYMI – Douglas Todd: The brain drain from B.C. — and Canada — is worsening

The more skilled, the more mobile and higher expectations:

…The best way to measure individuals’ standard of living is through overall gross domestic product, or GDP, per person. And on that score Williams has a disturbing message: “Canada had the second-weakest GDP per capita growth” out of the 38 well-off countries of the Organization for Economic Co-operation and Development in the period since 2014.

Western University economist Mike Moffat, a founder of the Missing Middle Initiative, is also concerned. Last year, Moffat says, a record-setting 120,000 Canadians moved out of the country, with 50 per cent of them between the ages of 25 and 45. The OECD estimates roughly half move to the U.S, followed by Britain and Australia.

These figures understate the exit phenomenon, Moffat said, because they exclude recent immigrants who leave, as well as “shadow emigration.” By that he’s referring to Canadians who typically keep filing Canadian tax returns and holding Canadian bank accounts while living elsewhere for years.

The worst thing is that the largest cohort leaving B.C. and Canada, according to Williams and Moffat, are educated and talented. They’re engineers, scientists, business specialists, health professionals and high-tech experts.

“One of the challenges for Canada is having a post-secondary education system subsidized by taxpayers and parents, only to see some of the best young people graduate and leave soon after for other countries,” Williams said.

“The loss of young, highly educated workers — often called the brain drain — is concerning because they tend to be net contributors to the tax base. That is, they pay more in taxes than they consume in public services.”

It shouldn’t come as a surprise that many are leaving Canada for the U.S., says Williams. He points to remarkable differences in Seattle, a global tech hub a three-hour drive south of Vancouver.

A highly skilled, recent graduate who aspires to earn a top salary will be heavily taxed in B.C., Williams said. “Once they earn above $261,000 Canadian, they will lose 53 per cent of every extra dollar in personal income tax. B.C. has the fourth-highest combined top personal income tax rate among the 60 U.S. states and Canadian provinces.”…

Source: Douglas Todd: The brain drain from B.C. — and Canada — is worsening

Moffatt: A wave of young digital nomads is leaving Canada for cheaper, warmer countries

Need better data. But if they file Canadian taxes and thus technically remaining Canadian citizens, does it matter that much compared to those who leave and don’t file Canadian taxes?

…These visas have caused a form of shadow emigration, where talented young Canadians have left the country, but they are not counted in our statistics, forcing policymakers to rely on anecdotes to determine the extent of the issue and how it is growing over time. 

The Canadians who live in work in those countries typically file Canadian tax returns each year, they continue to have Canadian bank accounts and Canadian passports, so in the eyes of data collectors, they still are domestic residents in Canada, even if they have been living elsewhere for years.

Their absence, however, is a loss for Canada. A 2024 study from the Bank of Canada found that two-thirds of Canada’s labour productivity gap with the U.S. stems from differences in the productivity levels of high-income workers in the two countries, and that the emigration of the high-talent workers from Canada to the U.S. is likely a contributing factor….

Source: A wave of young digital nomads is leaving Canada for cheaper, warmer countries

Moffatt | Mark Carney’s promise on housing was to build build build. What happened?

It is both supply and demand that need to be matched which was not the case under the Trudeau government, save for the correction that started under Minister Miller:

…The message in the Budget could not be any clearer: the government is increasingly relying on reduced population growth, rather than building more, to address Canada’s housing shortage. This comes at a high cost, as newcomers to Canada do much to add to the social, economic, and cultural fabric of our country, and the changes in immigration rhetoric risk painting newcomers as the cause of housing shortages, when often they are its biggest victims.

Source: Opinion | Mark Carney’s promise on housing was to build build build. What happened?

Mike Moffatt: My remarks to the federal cabinet on housing, immigration, and the temporary foreign worker program 

Really quite striking how academics like Moffatt, Skuterud, Worswick and other have changed the discourse around immigration, focussing on selection criteria, productivity and impact on housing, healthcare and infrastructure.

Another further indication that immigration is not a third rail issue, and Moffatt speaking to Cabinet and sharing his remarks on the conservative outlet The Hub is a further illustration:

..On population growth, yesterday’s temporary foreign worker reforms are welcome news, but Canada must go much further. The TFW program, particularly the low-wage non-agricultural stream, suppresses wage growth, increases youth unemployment, creates the conditions for the exploitation of foreign workers, and reduces productivity, as it disincentivizes companies from investing in productivity-enhancing equipment. The low-wage stream should be entirely abolished, and the other streams should be substantially reformed, including creating a system of open permits.

Population growth targets, including both permanent and non-permanent residents, and housing growth targets, should all be incorporated into the annual release of the Immigration Levels Plan. The targets must be aligned, to ensure population growth does not outpace homebuilding, which will require substantial reductions in the permanent resident target over the next few years.

Like most economists, I support a robust immigration system and believe the current targets are achievable in the long run. In the meantime, however, we need to give ourselves time to allow homebuilding to catch up to past population growth, requiring a substantial reduction in the permanent resident target back to the levels of a decade ago.

We should be clear that this is not about blaming immigrants for Canada’s issues. Rather we must recognize that when we invite people to our country, we need to ensure that we have in place the conditions for them to succeed. We do them no favours, and us no favours, by setting them up to fail.

And we should be clear that we are setting people up to fail, particularly Millennials and Gen Z. Rents on new leases in Halifax are up 75 percent in the past five years. It should come as no surprise that the 2024 World Happiness Report found that Canadians under the age of 30 are the 58th happiest in the world. They are being denied a path to middle-class prosperity.

We can and must do better. Thank you for having me here today.

Source: Mike Moffatt: My remarks to the federal cabinet on housing, immigration, and the temporary foreign worker program

Federal government planning sharp cut to low-wage stream of temporary foreign worker program, sources say

Highlighting the contrasting views between a business group and the more objective Mike Moffatt:

…Dan Kelly, president of the Canadian Federation of Independent Business, said temporary foreign worker programs have been around for decades and have frequently been tightened or loosened over the years based on evolving labour-market needs.

He said the government’s moves to ease access to the program in 2022 were entirely justified at the time.

“There’s absolutely no question that coming out of the pandemic, the labour market was broken. There were hundreds of thousands of vacant positions, particularly in lower-skilled occupational categories, that desperately needed filling,” he said.

Mr. Kelly said he understands that Ottawa is now under pressure to cap access to the low-wage stream, but also urged the government to find the right balance.

“The challenge for government is I think most of them know that the politically popular solution is at odds with the economically viable solution,” he said. “Yes, the labour market has cooled a bit in Canada, but if we take out the temporary foreign worker program, then you better not complain about the line at the local restaurant or the increase in menu prices.”

Mike Moffatt, an assistant professor of business, economics and public policy at Western University who has previously advised the Liberal cabinet, said the 2022 changes went too far. He said reducing the use of the temporary foreign worker program would be good for wages in Canada, would help students find work and would encourage businesses to innovate.

He said he questions why fast-food restaurants in college towns such as London, Ont., are using the program.

“We’ve got thousands of students, thousands of international students, and we can’t find somebody to work at a Dairy Queen next to a college? It just doesn’t seem reasonable to me,” he said. “I think we have lost the plot here.”

Source: Federal government planning sharp cut to low-wage stream of temporary foreign worker program, sources say

LILLEY: Trudeau changed foreign workers program at your expense

Valid critique with some humour:

The Trudeau Liberals are channeling Captain Louis Renault as they react in shock to problems with Canada’s temporary foreign worker program. Movie fans will know Captain Renault as the corrupt police chief in Casablanca.

After Captain Renault barges into Rick’s Cafe — more of a nightclub and casino — Rick Blaine, played by Humphrey Bogart, walks up and asks on what grounds his establishment is being shut down.

“I’m shocked, shocked to find out that gambling is going on in here,” Captain Renault says.

“Your winnings sir,” says a card dealer handing money to Renault, who thanks him and continues his bust.

The Liberals are Captain Renault, guilty of gambling in the illegal casino and now threatening to throw everyone out. It was the Trudeau Liberals who changed the rules to ramp up Canada’s temporary foreign workers program and now they are promising to punish anyone abusing it, using the rules they changed.

“Abuse and misuse of the TFW program must end,” Employment Minister Randy Boissonnault said last week.

“Bad actors are taking advantage of people and compromising the program for legitimate businesses. We are putting more reforms in place to stop misuse and fraud from entering the TFW program.”

The number of people coming in under the TFW program has been ramping up for years, especially under the Trudeau Liberals. Conservative Leader Pierre Poilievre, who was employment minister in 2015, called this out during a recent news conference.

“Trudeau has destroyed our entire immigration system, and he has expanded our temporary foreign worker program by well over 200% at a time when we’re losing jobs,” Poilievre said during an event at Stelco Steel in Hamilton last Friday.

Poilievre noted that when he was responsible for that program there were only 60,000 people admitted under the TFW program but now that number is near 200,000.

“On top of that, you have international students who are effectively temporary foreign workers who came under the wrong stream.”

There was a time, let’s call it 2014, when Justin Trudeau was leader of the third party in Parliament, that he railed against this program. Trudeau said the Harper government was allowing the program to drive down wages of Canadians.

“The government has allowed the temporary foreign worker program to become a force that drives down wages across the country and takes advantage of vulnerable people from abroad,” Trudeau said in April 2014.

Even as recently as this past April, Trudeau was saying that out of control immigration was hurting wages.

“Increasingly, more and more businesses are relying on temporary foreign workers in a way that is driving down wages in some sectors,” Trudeau said five months ago.

If only he knew someone who could do something about this!

He truly is Captain Renault, shocked that there is gambling going on and pocketing his winnings at the same time.

It was Trudeau who changed the rules in April of 2022 to allow a massive deregulation of the program. Under the changes announced then, seasonal industries could hire under the TFW for the full year while the cap on an employer having only 10% of their workforce come from the TFW program was lifted to 20% in most industries but higher in others.

The feds raised the cap to 30% for manufacturing, food and accommodations, hospitals and nursing homes. They also got rid of a stipulation that if unemployment was above 6% then TFW approval would not be granted.

“This was a deliberate move by the federal government to suppress wage growth for low-income Canadians, and increase the number of temporary workers, who have much weaker labour rights than permanent residents,” Mike Moffat posted on X last week.

Moffat is an academic and self-styled progressive who has advised the Trudeau government and worked for the Canada 2020 think tank that is closely tied to the PM. That’s what makes Moffat’s criticism sting so much for the Liberals.

That and the fact that he pointed out these changes were announced less than two weeks after the coalition deal with the NDP was announced.

The Trudeau Liberals say they are there for the little guy, the middle class and those working hard to join it. If actions speak louder than words then that is clearly not true, by the PM’s own admission, his policies are driving down wages for low-income Canadians.

Now he’s claiming he’s shocked, don’t believe him.

Source: LILLEY: Trudeau changed foreign workers program at your expense

Op-ed from Moffatt:

Moffatt: Justin Trudeau’s government radically transformed Canada’s temporary foreign worker program. Young people and low wage workers are paying the price

If you know a young person who struggled to find a summer job they are not alone. This has been the worst summer on record for youth employment outside of the pandemic. Many factors — from a weak economy to a population boom of young people — are at play with one of the largest being the federal government’s 2022 decision to deregulate the low-wage stream of the temporary foreign worker program.

On April 4, 2022, a mere 13 days after the Liberals and NDP signed their Supply and Confidence Agreement, the federal government announced arguably the largest deregulation of the Temporary Foreign Worker program in Canadian history. The program’s low-wage stream, which allows employers not in the agricultural industry (they have a separate stream) to bring in workers and pay them wages under the provincial median (currently $28.39 in Ontario), was radically transformed. The government removed the rule that employers could only bring in workers in some low-wage occupations if the local unemployment rate was less than six per cent allowing firms in areas of high unemployment to access the program. Companies had been limited to having only 10 per cent of their workforce be low-wage temporary foreign workers; this was raised to 20 per cent. In seven sectors, including accommodation and food services, this was raised to 30 per cent.

Mike Moffatt is the Senior Director of the Smart Prosperity Institute and co-host of the podcast The Missing Middle.

Source: Justin Trudeau’s government radically transformed Canada’s temporary foreign worker program. Young people and low wage workers are paying the price

Mike Moffatt and Cara Stern: Bold solutions to the housing crisis must be front and centre in budget 2024

On immigration, sensibly propose a reduction to 2022 levels (arguably, might need further reduction given housing construction timelines, healthcare capacity and the like):

Address demand while waiting for supply

Canada’s housing crisis was largely caused by our housing stock not keeping up with population growth. Supply-side reforms are needed to increase the absorptive capacity of the housing system to support the newcomers that contribute so much culturally and economically to the fabric of this country. However, that will take time, so demand-side measures are needed while the country builds that capacity.

In the last 18 months, the number of non-permanent residents in Canada nearly doubled, from 1.37 million to 2.5 million. This rapid growth led to a crisis for international students and other non-permanent residents who did not have the housing or supports needed to thrive in Canada. The federal government has responded by capping international student visas, but there is more work to be done.

They could develop a plan to reduce the number of non-permanent residents to 2022 levels of roughly 1.5 million. This one-million-person reduction can happen through attrition by slowing the intake of non-permanent residents (as with the international student visa cap) to levels that are exceeded by the outflow. This includes those both leaving the country and those gaining permanent residency. The purpose of this would not be to close the border to those who contribute so much to Canada but rather give the country time to increase its absorptive capacity. This would then create the conditions for both newcomers and existing residents to thrive.

Source: Mike Moffatt and Cara Stern: Bold solutions to the housing crisis must be front and centre in budget 2024

Moffatt: Canada is failing the grade on housing. Fixing that starts with international students, but it shouldn’t end there

Good overview of issues and needed steps. Perhaps overly optimistic regarding possibility of “doing it all:”

Beyond individual policies, though, what Canada needs most are co-ordination and alignment between our housing and population growth policies, as well as robust population forecasts to plan our needs not just in housing, but in schools, hospitals and other public infrastructure, too. Capping yearly non-permanent resident growth, in the same way that the country caps immigration, is essential for this planning. Canada may have been caught off-guard by how quickly our population has grown in the past two years, but this failure to forecast cannot happen again, as it doesn’t just affect our housing market – it puts Canada’s entire immigration system in disrepute with Canadians.

The good news is that we have a chance to do it all: simultaneously solve Canada’s housing crisis, grow our population, address the climate challenge and have a flourishing high-education system. We can build enough housing for existing residents and the newcomers who contribute so much to Canada’s economic and cultural vibrancy. And the vision to attract the best and brightest to the country to offset the effects of an aging population is sound, too: Integrating the higher-education system into the immigration system to give newcomers Canadian credentials and experiences is fantastic and should not be abandoned. But to achieve this, we need public policies that meet the ambition of our vision to ensure that everyone in Canada, regardless of how long they have been here, has a safe and secure place to call home. A reactionary cap from one level of government, while necessary, cannot be the limit.

Source: Canada is failing the grade on housing. Fixing that starts with international students, but it shouldn’t end there

Clark: Time to address the immigration number that matters now

One of the better assessments, particularly on the lack of action on temporary residents, whose numbers have ballooned over the last 10 years:

Don’t look too closely at the immigration targets the federal government set Wednesday. They’re not the numbers that matter right now.

Immigration Minister Marc Miller kept the already-planned target of 500,000 in 2025, but said there’d be no increase in 2026. But that isn’t Canada’simmigration number.

The figure that matters more is the 2.2 million in temporary residents who are in Canada. That number has surged for reasons that have nothing to do with immigration planning. And the Liberal government should be screwing up their courage to do something about that, right away….

Source: Time to address the immigration number that matters now

Canada’s population sees biggest one-year increase on record, StatCan reports

Quoted on need for annual levels plan to include temporary residents and political will to curb growth:

Canada’s population is growing at its fastest pace since the distant days of the baby boom.

According to the latest Statistics Canada report, the population last year grew by more than a million — a 2.9 per cent rate, the highest since the late 1950s and one that outstrips, by a wide margin, every other G7 country.

At that rate, observed StatCan’s Patrick Charbonneau, the population, now at slightly over 40 million, would double in just 25 years.

The question those figures and that projection raise is this: Is Canada — famously in the midst of both a housing crisis and a health-care crisis — ready to deal with that many more people?

The growth — 98 per cent of it — has been driven by immigration, both permanent and temporary, and particularly by the numbers of non-permanent residents coming to Canada. Those include refugees, temporary foreign workers and international students.

In 2022-23, Canada took in some 1.13 million immigrants, the highest such figure on record, and almost half a million more than the previous year. Over the same period, the number of non-permanent residents increased by 697,701.

As of June 2023, the number of non-permanent residents stood at nearly 2.2 million, about 5.5 per cent of Canada’s population.

“Temporary immigration has surpassed permanent immigration for the first time last year in a context where permanent immigration was already close to a record high,” said Charbonneau.

Andrew Griffith, a former director general at the federal Immigration Department, said Ottawa has a well-managed immigration system of permanent residents, but the exponential growth of the temporary resident admission has made the population growth unsustainable.

Ottawa has an annual plan that sets admission targets for different classes of permanent resident, but the entry of temporary residents is uncapped.

“We have to have an integrated immigration plan that actually looks at both the permanent residents and the temporary residents, given that the temporary residence is largely uncontrolled and has been increasing at a very high rate,” Griffith said.

“If you look at its explosive growth over the past few years, the past 20 years, that obviously contributes to all the pressures on housing, health care, infrastructure and the like.”

He said the government’s immigration plan is developed in silos and doesn’t address infrastructure capacity issues when it comes to health care, housing, education and transportation.

Although public sentiment still largely favours the continued immigration boost and its economic and workforce benefits, many regions are already struggling to manage housing and health-care shortages.

Across Canada, rising prices and limited supply create difficulties for those seeking home rental and ownership. The Canada Mortgage and Housing Corp. said in a Sept. 13 report that Canada needs 3.5 million more units, on top of those already being built, to restore affordability. Sixty per cent of the demand for housing is in Ontario and B.C., largely due to supply lagging behind demand for 20 years.

On the health side, about six million people across Canada lack access to a family doctor, according to Canadian Medical Association data. Of those who have a family doctor, about a third experience overly long wait times to access them.

It’s a system already under strain, with doctors and nurses increasingly reporting stress and burnout, and some quitting.

An increasing population doesn’t necessarily dictate a health-care calamity, said Ruth Lavergne, a Canada Research Chair in Primary Care at Dalhousie University.

But she said the segment of the population supporting and working in health care needs to grow proportionately to the population. And we need to “rethink the organization of health care, to make it more efficient and better use the capacity that we have.”

Some of that capacity exists within the ranks of the newcomers, in the guise of foreign-trained health professionals. The problem is Canada doesn’t have a great record in helping them work here.

But streamlining the credentialing process can’t be the only fix, said Canadian Medical Association president Kathleen Ross.

She said the country will have to reconsider health-care delivery.

And that, to her mind, means reconsidering who’s doing what, where and when in the health system, and how to plug gaps without opening up new ones.

It also means changing how primary care works, reducing the administrative burdens on health professionals and better retaining them.

“We’re in a really unique time. Our emergency rooms, which are sort of the backstop, if you will, for a primary care system that’s not functioning well, are already over capacity and struggling with closures relating to our human health resource challenges.”

“These are all things we need to take into consideration, whether or not our population increases by a half a million or one-and-a-half million this year. It still behooves us to get back to the big discussion about how we are going to deliver access to care for all residents in Canada, whether they’re temporary or permanent.”

On the housing shortage side, the responsibility falls on provincial and federal governments to ensure Canada can withstand rising demand, said John Pasalis, president of Toronto brokerage Realosophy Realty. Over the past decade, he feels that has broken down as governments failed to scale investments in vital services in line with population growth.

Although immigrants often feel the brunt of the blame for these pressures, Pasalis said culpability lies with leaders who set ambitious immigration targets and allow universities to accept significant numbers of international students without investing in upgrading capacity.

“The people who are moving here are the ones that are kind of paying the biggest price in many, many cases.”

If governments don’t step up, all Canadians will eventually feel the squeeze, said Mike Moffatt, assistant professor in business and economics at Western University.

“We certainly either need to increase the amount of infrastructure built and housing built or slow down population growth,” Moffatt said. “If we continue to have this disconnect, we’re just going to have more housing shortages, less affordability and more homelessness.”

Instead of looking at newcomers as the source of housing strain, Moffatt says leaders should impose stronger restrictions on investors taking advantage of scarcity to drive up prices.

But it’s not just the supply of houses; it’s the type of supply. Those stronger regulations will need to be aimed at developers, too, said Marc Lee, a senior economist for the Canadian Centre for Policy Alternatives. The housing in highest demand — for low- and middle-income families — is not as profitable to build.

David Hulchanski, a University of Toronto professor of housing and community development, noted that Airbnb has also taken up available housing across the country, something he said could be curbed through stronger regulation.

“There’s this effort to blame our housing problem on an increase in population,” said Hulchanski. “It isn’t just supply, it’s the type of supply.”

Against this backdrop, Immigration Minister Marc Miller has talked about the need to rein in admissions of international students — around 900,000 this year — by developing a “trusted system” to enhance the integrity of the international student program.

Griffith said that’s not enough — Canada needs to impose a hard cap, though that will take a strong political nerve.

“The business sector will squawk about the fewer temporary workers. Education institutions will go bankrupt if they don’t have their international students. The provincial governments will get in the way because they have to actually pay for university (education) rather than allowing the universities to be subsidized by foreign students.”

Shutting down the international student program and the temporary foreign worker program, or making major reductions to those programs, seems unlikely, he said, but freezing at current levels and gradually reducing those numbers might be viable.

“It would be very contentious,” he said. “It boils down to a lot of political will.”

Source: Canada’s population sees biggest one-year increase on record, StatCan reports