Interesting article about Immigration during a recession and some history

April 5, 2012

OTTAWA — The decision of successive Canadian governments since the early 1990s to maintain high immigration flows during tough economic times has contributed to the poor performance of newcomers over the past 30 years, according to a study released Wednesday.

“During recessions economic outcomes deteriorate more among recent immigrants than among the Canadian-born,” wrote Arthur Sweetman and Garnett Picot in a paper published by the Institute for Research on Public Policy, a Montreal-based think-tank.

Reducing immigration during recessions probably would improve the overall performance of immigrants and reduce the damage caused when newcomers to the labour market can’t find work for lengthy periods of time and become disengaged from the labour force, they argue.

The proposal was one of a number made in the IRPP paper to improve the weak economic performance of immigrants relative to other Canadians over the past three decades, though the authors noted that some of these measures have been initiated already in recent years.

Immigration Minister Jason Kenney said he agrees with the main thrust of the report but didn’t voice any support for the idea of a sharp reduction in immigrant intake during recessions.

He noted that he’s trying to maintain a “balance” between critics who say immigration is too high, and demands for an even higher intake from the business community, provincial governments and opposition parties.

“I think the findings confirm what I’ve been saying” about the struggles of recent immigrants, said Kenney, who has announced a number of initiatives to promote the selection of immigrants who meet the Canadian economy’s needs.

“This is why I’m saying we need transformative change.”

Canadian immigration flows used to rise and fall based on Canada’s economic performance, but that changed in the late 1980s under Brian Mulroney’s Progressive Conservative government.

That government’s policy of bringing in roughly a quarter-million immigrants and refugees each year continued under subsequent Liberal governments and under Prime Minister Stephen Harper, despite the recession of 2008-09.

In 2007, when the economy was still robust, the total number of immigrants and refugees was 236,753. That figure rose to 247,245 in 2008, 252,174 in 2009, 280,691 in 2010, and 248,660 in 2011.

These figures don’t include temporary foreign workers, who numbered 163,543 in 2007, 190,768 in 2008, 176,192 in 2009, 179,192 in 2010, and 190,769 in 2011.

Fraser Institute economist and former Reform MP Herb Grubel, a longtime critic of high immigration levels, said Canada’s immigration policy is driven by politics.

“It is time to reduce immigration during recessions and high unemployment, ending the buying of votes of immigrants through high levels regardless of economic conditions that was started by Prime Minister Mulroney in the 1980s and has been continued by all governments since,” Grubel said Wednesday.

Among the points in the report:

Canada has one of the highest intakes of immigrants in the world, with a per capita rate double that of the U.S. rate, even after taking into account the flow of illegal migrants from Mexico and Central America.

Data from the 2006 census shows that immigrants are earning 60 to 70 per cent of the wage earned by the average Canadian-born worker in their first few years in the country, compared to 85-90 per cent in the late 1970s.

The poor performance is the result of a variety of factors, led by the shift from “traditional” source nations — the U.S. and Western Europe — to Asian, African and Caribbean countries. Language barriers, education issues, discrimination and cultural differences were also factors.

Despite political rhetoric to the contrary, “the age profile of immigrants has accentuated rather than alleviated the demographic bulge of Canada’s baby boom.”

Unlike the Fraser Institute, which argues that immigrants cost Canada billions every year, the IRPP report concluded that “immigration has a very modest impact on measures such as (gross domestic product) per capita and the government’s balance sheet, although whether it is positive, negative or zero is open for debate, with most observers favouring ‘small positive.'”

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