Commentary
Immigration is a hot topic lately. Until recently, anyone questioning the “immigration is good for the economy” mantra was ruthlessly shouted down and labelled a bigot.
The Canadian fondness for immigration is certainly understandable. Canada was, and to some extent still is, an underpopulated nation. Out of 249 countries and dependencies, Canada ranks 238th in population density at four people per square kilometre. For most of its history, Canada has grown in wealth as its population expanded. We are a nation of immigrants as the French, English, Scots, Irish, and other groups from Europe and eventually elsewhere came to Canada. Since the beginning of the Industrial Revolution, populations and standards of living have increased.
As we are told, seemingly ad nauseum, correlation is not causality. That is true, but much of the time correlation reveals causality. Importantly, multiple factors can cause a phenomenon. Also, sometimes high correlations are merely coincidental. The question Canadians are increasingly asking themselves after two years of unprecedented immigration levels and a six-year growth depression is: “Is immigration a benefit, or has it become a root cause of our economic problems?”
The answer is not as simple as it appears based on data. The benefit of immigration is based on the desire for increasing the population. Given the crashing birth rates of people born in Canada, more immigration seems logical. However, many less developed nations have exploding populations but remain mired in poverty. Some are seeing the amount of starving people increase. Also, countries like South Korea and some European countries are seeing no population growth, or even slight decreases, and are doing quite well. The new consensus that population stagnation leads to economic catastrophe is not playing out. It really depends on the country, and nations like Italy have many economic issues apart from a decline in population.
The benefit of immigration depends on largely two factors. One is the potential productivity of new immigrants relative to the existing population base, and the other is the ability of the host nation to provide infrastructure and an economic system that allows new arrivals to flourish. Many talented immigrants came here and saw their standard of living skyrocket relative to their experience in their country of origin because Canada provided them with the right environment to flourish. For most of our history, Canada has done a phenomenal job using immigration to build what was, until recently, the envy of many around the world.
Lately, however, something that was a strength has become a significant weakness. The two factors needed for immigration to add to prosperity are absent. First, immigrants in recent years seem to be less skilled than in the past. Many don’t have English- or French-language skills and are from countries with low educational attainment. Of course, there are many exceptions, but in aggregate, that appears to be the case.
In the past, Canada would attract the best and brightest from other nations in search of opportunity. As Canada has declined economically relative to the rest of the world, fewer high-potential immigrants come here and all too many want to leave soon after arrival. Canada has dropped from a top 5 nation in terms of living standards to not even being in the top 20. High-talent immigrants have better alternatives than those to be had in Canada.
The second issue is that Canada is losing its ability to provide an environment where immigrants can flourish. There is a shortage of affordable housing and high-paying jobs. Taxes are high and food prices have soared to the point that average disposable income is declining if we look at the issue honestly. I find it remarkable and depressing that so many of my Uber drivers are skilled professionals from other countries who are driving 60 hours a week to avoid homelessness. The huge influx of immigrants increases the supply of labour more than the additional demand, further depressing wages.
At this point, immigration has become a net economic negative although it is not our only problem. There is little doubt that average GDP per capita and wages would be significantly higher now if it were not for the government’s reckless immigration policy. Canada has used immigration as a panacea to hide dysfunctional and redistributive economic policies, like a drug abuser uses opioids to deal with pain and to avoid the causes of his discomfort.
Canada needs an immediate immigration reset. The number of immigrants flooding into the country needs to be severely curtailed. Those allowed to enter should have the potential to be productive. The economic framework of Canada needs to be repaired and reformed before we can start accepting previous levels of newcomers. We are doing immigrants no favours encouraging them to come to a country in rapid decline.
