Economic impact of immigration to Canada

rdf:langString Economic impact of immigration to Canada

rdf:langString May 2021

rdf:langString The economic impact of immigration is an important topic in Canada. Two conflicting narratives exist: 1) higher immigration levels help to increase economy (GDP) and 2) higher immigration levels decreases GDP per capita or living standards for the resident population and leads to diseconomies of scale in terms of overcrowding of hospitals, schools and recreational facilities, deteriorating environment, increase in cost of services, increase in cost of housing, etc. A commonly supported argument is that impact on GDP is not an effective metric for immigration. Another narrative for immigration is replacement of the ageing workforce. However, economists note that increasing immigration rates is not an effective strategy to counter this entirely. Policy Options found that mass immigration has a null effect on GDP. Increased immigration numbers and the associated soaring housing prices has significantly contributed to the rise of inflation in 2021 to the highest in 18 years. Canada is one of the top western countries that accepts most immigrants per capita and was ranking 9th in 2015 in terms of immigrants as a percent of the population among western countries while Liechtenstein ranked first. The per capita immigration rate to Canada has been relatively constant since the 1950s, and in the first and second decades of 21st century there was a steady increase in the education and skill level of immigrants to Canada due to the focus on higher average productivity based applicants and thus immigrants to Canada on average were better educated than Canadians. This trend was enhanced for income redistribution in the third decade of the 21st century by opening low-skilled immigrant pathways that only required minimal scores for immigration to achieve target of 400,000 immigrants per year. In 2022, Justin Trudeau revealed the immigration strategy is to bring in more newcomers as set out in the 2021-2023 immigration levels plan (that is to increase the number to 411,000 in 2022) and announced immigration level plan for 2024 to be 451,000. Trudeau's government also stated that the focus of new immigration changes would be to expand pathways to permanent residency for international students and temporary foreign workers by lowering scores, considering passing of an academic program, removing English and French language proficiency test results requirement, and also by removing work experience requirement as in 2021, this further solidifies the notion that getting a study permit is an unannounced official pathway for getting Canadian residency, and some consider this to be cracks in the system and others as a convoluted pathway for migrant justice. An article by an ex-policy maker states that Canada is rooting for the low-wage-low-productivity model of competitiveness that it has been locked in from the mid-1980s with this move. The article further observes that it is imperative that Canada and the “government for the people” require a fundamental re-commitment to pre-1970s dominating national objective and efforts for a steady improvement in raising the living standard of Canadians by embracing the supply and demand concept of labour economics, and improving the economic efficiency of the system. Recent immigrants are far more likely than native born Canadians to initially have low incomes due to differences in culture, difficulties due to English as their second language, discrimination, and racialization. There are no employment equity policy prescriptions that helps immigrants to participate in the economy on equal footing with other Canadians against the hostile labor market. There are no governmental incentive programs that would encourage organizations for hiring educationally qualified immigrants to positions they are fit for work but lack aspects a native-born Canadian initially would have for the workplace. A 2006 Canadian government report shows that 22 percent of racialized persons lived in poverty compared to 9 percent of non-racialized persons and in major cities more than half of the people living in poverty were those who were racialized and the comparative poverty rate was exponentially growing, and later in a 2019 study it was found that the rate of poverty amongst recent immigrants is 2.4 times higher than that of native-born Canadians and identified it to be a ever-widening trend. In certain provinces there are active local immigration partnerships that aid immigrants in getting jobs that commensurate with their level of education and work experience. A 2001 study found successful interpellation is possible if young people are considered for immigration, the study found a positive correlation between age and earnings for immigrants with acculturation effect, and the study observed it in immigrants who were visible minorities or whose mother tongue was not English.