Commentary
In June, I ruptured my Achilles tendon. That necessitated me going to the local hospital for check-ups and physiotherapy. Given my inability to drive as my right foot was injured, I used Uber to get to and from the hospital. Unsurprisingly, most of my drivers were immigrants, mostly recent ones. Given the understandable lack of job opportunities for new immigrants, especially ones with limited English skills, leasing a car and driving for Uber seemed to be a good opportunity.
One of my drivers was a Ukrainian gentleman who informed me that he had been in Canada for about four months. I naively assumed he must be happy and grateful to get out of a war zone. I was wrong. He informed me that he was having difficulty supporting himself and his family. He was working as a line cook full time and driving Uber at the equivalent of another full-time job. I could see he was physically and mentally exhausted.
Even though this man was in his late 30s and of military age, he spoke of how his life was better in Kyiv. He had a nicer place to live, at less cost, and food was more affordable. Given that the GDP per capita was US$4,828 in Ukraine in 2021 compared to about US$55,000 in Canada, this is remarkable. This man would prefer living in a war zone than in Toronto. Nor was he unique. I have had drivers from Turkey (a Kurd, to be exact), a Bulgarian, a Pakistani, a couple of other Ukrainians, a Taiwanese fellow, and an Afghan. Only the Afghan man felt he was better off in Canada, though even he expressed his disappointment and dissatisfaction with his adopted country.
Average rent in Canada has doubled during the last eight years to $2,150 a month. The rule of thumb is that lodging costs should not exceed 30 percent of pre-tax income. Therefore, an individual or household would need to earn $86,000 annually to afford the average apartment in Canada. In 2020, only slightly over 20 percent of Canadians earned over $75,000 a year and slightly over 10 percent made over $100,000. This situation is a result of contradictory and maladaptive government policies that simultaneously stifled income growth, kept housing supply low with poorly thought-out tax, environment, and zoning policies, while increasing demand dramatically with a relatively open immigration policy.
Good luck earning over $80,000 a year driving an Uber or flipping burgers. The huge increases in food prices over the last few years is not making life any easier for anyone, especially new immigrants.
The disappointment that new immigrants feel towards their new home is a matter of poorly managed expectations coupled with a lag between reality and reputation. Previous generations of immigrants came to Canada in pursuit of freedom, economic opportunity, and in many cases to escape violence and persecution. Frankly, most recent immigrants seem to be motivated by perceived economic opportunity. I seldom hear recent arrivals voice their gratitude the way my parents and their generation did for their newfound freedom and equality.
Canada has declined economically especially with respect to other Western nations. In 1980, the GDP per capita of the United States was about 10 percent above that of Canada. Ontario had about the same standard of living as the United States. Now, the United States, which has had its economic ups and downs, had a 40 percent higher GDP per capita in 2019, the last full year before the pandemic. The standard of living gap between the United States and Canada seems to have widened since then.
Immigrants probably thought they were coming to an economy resembling that of the United States and found one closer to Southern Europe, which seems headed for a Latin American standard of living if current trends continue. A nation Canada is compared to frequently is Australia. In 1980, the two countries were about equal in GDP per capita, with Canada having a slight advantage. Now, Australia has between a 15 percent and 20 percent higher living standard.
Countries that had much lower standards of living than Canada are catching up quickly, and people in those nations do not have to endure the brutal winters and deteriorating cities of the once Great White North. They include countries like South Korea, Taiwan, Israel, Hungary, and Poland, which were significantly poorer than Canada a generation or two ago but have caught up, or will soon. If current trends continue, these countries will surpass Canada.
Historically, immigrants don’t leave to go to poorer countries. Consequently, Canada may be sliding further and further down the food chain for new immigrants. Many nations are so poor that desperate people will still come to Canada, but they may be ill-suited to adjust to the Canadian economy and culture.
Canada may soon experience a significant brain drain. The most productive Canadians, especially the younger and better educated, may leave for greener pastures south of the border and elsewhere as the average productivity potential of new arrivals declines. Rich and well-educated people in even poor nations have better options than Canada.
An interesting microcosm of our current situation may be Canada’s Jewish community. They are disproportionately well-educated, productive, and, due to our progressive tax system, pay taxes out of proportion to their numbers. Young Jews may opt for better opportunities in Israel, which has gone from half the Canadian standard of living to about the same. The United States and elsewhere are also possibilities.
Furthermore, the fact that hate crimes against Jews have been increasing in Canada since the outbreak of the Israel-Hamas war, makes the case for leaving stronger. However, young Jews won’t be the only productive people leaving.
