The Foundations of Canada's Mass Immigration Policy
by Dr. Rodrigue Tremblay, Emeritus Professor of Economics, Université de Montréal
(Author of the books "The Code for Global Ethics", and "The New American Empire")
"Economic thinking about immigration is generally quite superficial. It is a fact that in different [rich] countries, reproducible national capital is on the order of four times yearly national income. As a result, when an additional immigrant worker arrives, in order to build the necessary infrastructure (housing, hospitals, schools, universities, infrastructure of all kinds, industrial facilities, etc.), additional savings equal to four times the annual salary of this worker will be needed. If this worker arrives with a wife and three children, the additional savings required will represent, depending on the case, ten to twenty times the annual salary of this worker, which obviously represents a very heavy burden for the economy to bear." Maurice Allais (1911-2010), French economist, Nobel Prize in economics in 1988, (in his book 'Nouveaux combats pour l'Europe', 1995-2002', Paris, 2002, 502 p.)
"You cannot simultaneously have free immigration and a welfare state." Milton Friedman (1912-2006), Emeritus Professor of Economic, University of Chicago, August 20-22, 1999.
"What is the role of the Canadian government [in regards to immigration]? If it follows the recommendations of immigration advocates, it makes policies to maximize world welfare and its goal should be high, if not unlimited immigration. If its policies are to maximize the welfare of the native [Canadian] population, immigration policies should be designed to eliminate the fiscal burden [of between $20 and $26 billion a year] so that only positive economic benefits occur through immigration." Herbert Grubel (1934- ), Emeritus Professor of Economics, Simon Fraser University, (in a Fraser Institute Report entitled 'Canada's Immigrant Selection Policies: Recent Record, Marginal Changes, and Needed Reforms', 2013)
Last October 30, without much fanfare, the minority Canadian government of Justin Trudeau announced its intention to not only refuse to lower the annual numbers of legal immigration, in these times of a serious pandemic crises and of a crushing economic slowdown, but rather to increase them substantially over the next three years.
Indeed, Federal Immigration Minister Marco Mendicino announced that his department is raising legal levels of immigration to Canada to reach 401,000 people by 2021; 411,000 in 2022; and 421,000 in 2023. Remember that these levels were 310,000 in 2018; 330,000 in 2019; and 340,000 in 2020.
If one compares these levels to those of the last two years, the new immigration targets would represent a 25 percent increase, a substantial jump from former levels, which were already judged to be very high. The Federal Minister of Immigration made those announcements in an interview with Bloomberg.
A few days later, on Monday, November 2, Mr. Mendicino doubled up on his intentions and told Bloomberg that the Trudeau government also plans to speed up the path to permanent residency and to citizenship for more than 1 million temporary foreign students, foreign workers and asylum seekers now living in the country.
Since it is widely believed that there will be a general election in Canada next year, is it possible to make a connection between this intention by the Liberal minority government to make it easier for so many temporary residents to qualify to eventually vote in the coming election?
Let us recall for the record that the Liberal government of the day, a few months before the Quebec referendum of October 1995, also granted residency and citizenship, in advance, to tens of thousands of newly arrived immigrants, so the latter could vote in the referendum.
It may be useful, also to note that a recent Bloomberg-Nanos Research poll, published on November 6, indicated that 83 percent of Canadians were opposed to increasing immigration levels at this time. Indeed, the poll revealed that only 17 percent of Canadians wanted an increase in the immigration levels, while a plurality of 40 percent wished these levels were reduced, and 36 percent said they wanted to keep the 2019 status quo.
If the opposition parties in the House of Commons do not object to the decisions of the current Liberal government, the result would be that Canada would welcome, in just three years, more that 1.2 million new immigrants while many Canadians are out of work. This would translate into a level of immigration, for example, that would exceed half of the population of the City of Montreal. One can imagine the economic, social and political consequences of such a phenomenon, in such a short time.
Again, to put things in perspective, consider that the projected level of legal immigration to the United States has been set at 601,660 people for the year 2021. As the populations of Canada and the United States will approach 38 million and 332 million respectively, at the end of this year, this would mean that by 2021, Canada would accept almost six times as many legal immigrants per capita as the United States.
If Canada were to accept the same proportion of immigrants, relative to its population, as the United States, its levels of legal immigration should instead be in the range of 66,000 to 135,000 per year, not the more than 4000,000 immigrants each year that the minority Trudeau government is planning.
On must add to the above figures the influx of refugees, and considering the Trudeau government's "no border" policy on refugees, the annual levels of total immigration to Canada could easily rise to 500,000 per year. This would translate into a migratory inflow equal to 1.3 percent every ten years, a rate of increase unheard of in any industrialized country. With the current policy of super massive immigration, the Canadian population could double every 45 years, a dramatic demographic transformation.
The current liberal government should explain why its immigration policy is, at this time, the most massive of any industrialized country, and why it is a policy of sharply increased immigration, rather than being adapted to the country's difficult economic situation.
Mass Immigration and a Replacement of Population?
According to Statistics Canada, considering the very high yearly levels of immigration recorded in recent years, the percentage of the foreign-born population to the total Canadian population is expected to reach 24.5 percent next year, in 2021.
Under the realistic hypothesis of high immigration levels, the percentage of the population born abroad in relation to the total Canadian population should approach 30 percent in 2031. This would be the highest percentage in 160 years, the period during which data are available.
A great shift is also expected as to the origin of immigrants to Canada in the coming decades. Statistics Canada has estimated that by 2036, the proportion of immigrants born in Asia could reach around 56 percent of new immigrants, up from the proportion of 44.8 percent observed in 2011.
Conversely, only around 16 percent of future immigrants to Canada would be coming from Europe, a drop by half from the 31.6 percent recorded in 2011. This could have the look of a population replacement policy.
Mass Immigration when a Country is a Free Trade Economy
It should be understood that labor needs are by no means the same when an economy is in a free trade situation, as it has been the case with the Canadian economy since 1988. In fact, Canada has concluded three important free trade treaties in the last thirty years. The first was concluded with the United States in 1988; the second with the US and Mexico in 1994, and the latest, the new Canada-United States-Mexico Agreement (CUSMA), came into force on July 1, 2020.
For the Canadian economy, access to the large American market is a natural substitute for a protectionist trade policy and for the need to have a rapidly expanding domestic market. In such an environment, economic growth is more dependent on exports and on productivity gains, rather than on mass immigration of foreign workers. Only a targeted immigration policy, based on skills, is really then necessary, depending on the specific requirements of expanding industries.
Private Interests behind the Canadian Mass Immigration Policy
In Canada, the pressure in favor of ever increasing immigration levels originates from three main sectors. These are identified interest groups who benefit from mass immigration but do not necessarily bear the costs.
a) The professional services that are offered to individuals who wish to immigrate to Canada. The providers of such paid services constitute a powerful lobby in favor of ever increasing immigration.
b) Low productivity and low wage industries competing with imports, and the construction industry.
The advent of free trade has meant that labor-intensive industries, such as textiles, have seen their outputs gradually replaced by imports. Likewise, some industries with little mechanization, such as the service industries, may have trouble raising their productivity. For the latter, paying low wages to employees is a way of remaining profitable.
One sector that benefits from the flow of immigrants is the group of the construction, real estate and housing industries. They benefit from the increased demand for housing and higher prices, especially in large metropolitan areas.
c) Political parties and organizations that need foreign support to ensure partisan or political success.
It could happen that a particular political party or an organization could profit financially or electorally from an increasing flow of foreigners. These would be private interests, which may or may not coincide with the general interest of the country.
A Mass Immigration Policy may result in a Chronic Labor Shortage: The Creation of a Vicious circle
The Canadian government's policy of mass immigration and of population replacement is not only about bringing in foreign workers to relieve identified labor supply bottlenecks in certain industries. It also encourages an inflow of economically dependents from abroad, (spouses, children, elderly grandparents, etc.). Such economically dependent immigrants inflate the overall demand for labor by creating an increased demand for goods and services, which could worsen labor shortages in some industries, such as the education, health and housing industries.
This could result in creating an endless spiral: The longer mass immigration endures, the more artificial labor shortages pop up in some sectors, and the more it becomes necessary to raise immigration levels, and so on!
Conclusion
The excessive mass immigration and population replacement policies of the Justin Trudeau government are bound to erase the historical reality that Canada was founded and developed by two founding peoples, the French and the English.
Economically, these are also policies that go far beyond the real requirements of the Canadian economy. For example, rather than alleviate labor shortages in some identified sectors, it an easily result in creating labor shortages in many other sectors.
The economic arguments advanced to justify such policies of mass immigration and population replacement, in the current economic context of a crushing pandemic, high unemployment levels, a prolonged economic slowdown and a high level of indebtedness, are very weak and even, in some cases, fallacious and counterproductive. Such policies seem to be based primarily on ideological and political motives rather than on sound economic arguments.
Ideally, the Canadian federal government should hold a national referendum on this vital issue. This would shed light on all facets of the question. In the absence of a serious national debate, it could nevertheless be the duty of all political parties to take a clear position on these issues, which are binding on the future of the country.
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N.B. This is a condensed version of a longer article. To read the complete article (in French), please click here.
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International economist Dr. Rodrigue Tremblay is the author of the book "The code for Global Ethics, Ten Humanist Principles" of the book "The New American Empire", and the recent book , in French, "La régression tranquille du Québec, 1980-2018". He holds a Ph.D. in international finance from Stanford University.
Please visit Dr Tremblay's site or email to a friend here.