Wednesday, March 9, 2011


There has been much huffing and puffing by politicians, the media and immigrant lobbyists about the government’s plan to reduce the number of parents and grandparents joining their immigrant offspring in Canada next year.

Yes, the policy change is unfair. Many immigrants have come to Canada having been promised that their parents and grandparents could join them so that they can continue the cultural traditions of their homelands and receive help with family chores and child care.

While immigrants clearly benefit from the existing policy, the reality is that the benefits to immigrants come at the expense of Canadian taxpayers. New data and studies show just how great this fiscal burden is.

Official statistics indicate that recent immigrants have lower average incomes and tax payments than other Canadians, even ten years after their arrival. At the same time, these immigrants on average absorb at least the same amount of social benefits as other Canadians.

As a result, $6,000 is annually transferred to the average immigrant at the expense of Canadian taxpayers. In 2006 the value of these transfers to all of the 2.7 million immigrants who arrived between 1987 and 2004 and still live in Canada came to $16.3 billion. Taking account of the 1.5 million immigrants who arrived since 2004 the fiscal burden comes to $25 billion in 2010. These fiscal costs represent a significant proportion of the $55 billion deficit of the federal government projected for the fiscal year 2011.

Important here is the fact that parents and grandparents lower the observed low average incomes of all immigrants. The reasons are obvious. They tend to be elderly, have poor language skills and possess few marketable skills. The numbers of immigrating parents and grandparents are high: 84,917 or 6.7 percent of the 1.3 million immigrants admitted during 2006-2010.

The fiscal transfers to parents and grandparents are much higher than those of the average immigrant not only because of their low incomes but also because they tend to be of an age where their demand for costly medical services is at its highest level. In addition, many arrive in Canada with medical conditions that went untreated in their home countries. Recently, at the Dubai airport I noticed a long line-up of elderly persons in wheelchairs about to enter a plane headed for Toronto, presumably in transit from India.

In the light of these facts it is obviously in the interest of Canadian taxpayers to end the admission of parents and grandparents. This can be done fairly by stipulating that immigrants arriving after some future date will no longer have the right to have their parents and grandparents join them as permanent residents, though temporary visits would be allowed. Important for the present debacle, immigrants already in Canada or arriving before the set date should continue to be able to have their parents and grandparents join them permanently.

Under the proposed policy, the number of parents and grandparents admitted into Canada annually would decrease and ultimately become zero. The fiscal burden they impose on taxpayers would similarly decrease through time. These outcomes are not as prompt and large as is desirable fiscally, but this disadvantage is outweighed by the absence of the ethical and political costs of the alternative of reneging on past promises.

One problem with the proposed policy is that it may discourage some potential and otherwise desirable immigrants from applying for visas. However, Canada’s pool of applicants for immigration is very large and while it may shrink somewhat, there should remain enough highly qualified economic immigrants to be selected for admission.

Politically, the proposed policy would be a winner. All Canadians would welcome the fiscal benefits it would bring, including recent immigrants whose offspring would also face lower tax burdens in the future.