Sunday, October 29, 2023

Can Canada afford to continue current levels of immigration?

A long article in the Globe and Mail about Canada's immigration policy is food for thought. I am never going to agree with author Konrad Yakabuski's political stance, based on prior experience, but he has some interesting points to make.

It has - quite suddenly, it seems to me - become acceptable in Canada to talk about immigration being too high. The country has always had a pretty liberal view of immigration, and immigration as a policy has always been a popular one. To say that the country  was built on the backs of immigrants is even truer here than in many other countries that may claim that. But the question remains: how much is too much?

Most of those who are arguing that immigration under Justin Trudeau's Liberal government has got out of hand still believe that we need some immigration, just that the recent levels are unsustainable. And, for the first time in generations, a majority of the population is starting to agree. While a Nanos poll conducted in October 2022 concluded that 69% of Canadians supported the then current levels of immigration, a similar poll in September 2023 showed a huge turnaround with more than half of Canadians believing that current immigration projections are too high. Separately, Environics polls also show a dramatic increase in Canadian who think that immigration is too high, from 27% last year to 44% this year.

Now, the main reason for this turnaround is not so much anti-immigrant sentiment and xenophobia than it is the nationwide housing and housing affordability crisis, and the general insecurity brought about by high inflation and economic uncertainty. But many see high immigration as a large part of the reason behind this uncertainty. 

In fact, it's probably just a small part of it. A failure to invest in machinery and technology and a general productivity deficit are probably more to blame, combined with external factors like wars in Ukraine and the Middle East, and an aggressive geopolitical stance by China. Our productivity is just not growing fast enough to sustain our standard of living. But, in times of uncertainty, immigration is an easy target to blame. 

And it is a fact that, although Canada's GDP has been rising in this era of record immigration, GDP per capita has been falling, and we have not been keeping pace with other developed counties with less ambitious immigration policies. The OECD recently ranked Canada dead last among its 38 advanced country members in terms of its potential GDP per capita growth by 2030.

All that being said, immigration, even if we need it to compensate for falling birth rates and an ageing population, does seem to be poorly managed at the moment. The  Comprehensive Ranking System, the points system used for decades to identify promising immigrants to Canada based on language ability, education, skills, job experience, etc, has been degraded of late, and often all but ignored (a score of 75 out of a possible 1,200 now suffices in some cases, rather than the 400-500 levels traditionally required). 

And any consideration of our "absorptive capacity" - the ability of the country to accommodate an influx of new Canadians from the point of view of infrastructure, labour markets, housing, education, etc - also seems to have been unlinked from immigration policy since the 1990s, despite being a central plank of governments since the immigration boom after the 2nd World War

It is certainly hard to see how the Century Initiative - the push to increase Canada's population to 100 million by 2100 - could be a practical proposition. With a population newly arrived at 40 million just this year, the country already seems to be creaking at the seams. Although we have plenty of space, new immigrants do not want to live in no-name towns in the middle of the Prairies or Northern Ontario; they want to live in Toronto, Vancouver and Montreal, where the potential good jobs are. The more I think it it, the more the prospect of a Toronto with a population of 33 million (as projected by the Century Initiative) is hard to imagine. Indeed, it's hard to see what the point of such a massive population would be, although current immigration levels put us on track for just such a population.

In addition to the immigration of permanent residents, we seem to have lost complete control over the growth in the number of temporary residents entering the country as low-wage workers and students (this has surged by 46% in the last year alone), and over how many of them remain in the country after their temporary visas expire. Statistics Canada is in the process of revising its methodology for counting temporary residents, and the government has recently announced plans to better control the numbers of overseas students (controversial plans, it must be said) in an attempt to address the housing shortage.

Some researchers have even thrown doubt over the ability of immigration  to slow the ageing of our population. There may be a short term advantage, but immigrants age too and eventually retire. They also tend to bring their spouses and, later, their ageing parents and other family members, under a rather liberal family reunification program. Once again, family reunification is a commendable goal, but it also has a knock-on effect that may have been unanticipated.

I'm all for "doing the right thing" and taking in large numbers of refugees from the more war-torn areas of the world. I'm also conscious that the Liberals may be going all out on immigration while they are in a position to do so, because they can see a time coming soon when a much less open government is in power. But there is a risk that, in trying to do too much too fast on immigration, it causes a backlash. And we seem to be seeing the start of just that. 

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