What is immigration for? Canada seems to be confused by that question.
Right now, the country’s immigration system is digging out of a hole created by a failure to control a boom in the number of foreign students and temporary foreign workers.
But it’s worth addressing the bigger, long-term question now. Canada’s immigration system needs saving.
Above all, it’s time to discard the misguided notion that the purpose of immigration is to fill labour shortages and build a bigger work force. That idea has been promoted by Canada’s business associations and adopted by the Liberal government.
More immigration doesn’t necessarily reduce labour shortages. A bigger labour force won’t necessarily make Canada richer. But a better labour force will.
Of course, there are also non-economic goals for immigration, such as family reunification, and humanitarian protection for refugees and asylum-seekers.
But roughly 60 per cent of Canada’s permanent immigrants come under the economic class. The goal should be to bring in skills, knowledge and innovation – human capital, in the lingo of economists.
Using immigration to relentlessly expand the labour force and to fill all manner of perceived labour shortages – including programs for everything from estheticians to caregivers to truckers to low-wage workers – is not good for the economy.
Start with this: research by Pierre Fortin, professor emeritus of economics at the Université du Québec à Montréal, found that the pre- and post-pandemic efforts to bring in more people to reduce Canada’s labour shortages didn’t actually reduce labour shortages across the economy.
Immigrants do “supply” additional labour, Mr. Fortin noted in an interview. But they are also consumers, so they increase the demand for labour – possibly even increasing economy-wide shortages a little. The assumption that immigration reduces generalized labour shortages is a “dangerous fallacy.”
Business groups like the idea because it can be good for individual companies. Mr. Fortin recalled that he was once a director of a manufacturing company that benefited from recruiting machinists from Poland. But business leaders make the mistake of assuming that if it is good for them, it is good for the economy.
Immigration to reduce some specific labour shortages, such as nurses in the publicly-funded health care system, might be good for the country. But in the private sector, labour shortages can be reduced by companies offering higher wages, encouraging people to earn qualifications for unfilled jobs.
In the 1990s, it had become clear the government is bad at micro-managing the labour force through immigration. Ottawa brought in people to fill in-demand occupations that were not in demand a year later. Reforms under both Liberal and Conservative governments moved to requirements that helped immigrants thrive in Canada, such as education, skills and language.
But since the pandemic, the Liberal government has been on a quest to fill perceived shortages, putting various occupations at the front of the line, allowing provinces to do more of that, too, widening temporary foreign worker programs – and repeating old mistakes.
Recruiting immigrants is a bit like importing a piece of the future economy. Selecting those who will be more productive than the average Canadian will make Canadians richer on average, Mr. Fortin noted. That means seeking human capital. That doesn’t necessarily mean dramatically fewer immigrants in the long run. It means a different goal.
“Do you want a bigger Canada or a richer Canada?” Mr. Fortin asked.
There is also the notion that the goal of Canada’s immigration should be expanding the labour force to pay for all the costs of an ageing population. This has become such an article of faith that Ottawa has lost a sense of balance.
As Mr. Fortin notes, the overall impact of immigration on ageing will always be minimal unless the number of newcomers is drastically increased to millions every year. There are only so many 25-year-olds coming each year into a population of 41.5 million, and once they arrive, they get older every day.
So, as the Liberal government works to repair its way out of its immigration mistakes, it’s time to question the assumptions. Already, Canada’s immigration system is in trouble. Polls show Canadians are starting to sour on it.
To save the immigration system, it’s time to discard the fallacies that have caused such damage.