Thursday, November 17, 2011

A Proposal for the Reform of Canada's Immigration Policy

On October 25, 201, I had the opportunity to discuss with the members of the Standing Committee on Citizenship and Immigration (CIMM) of the Parliament of Canada my views on how the government should deal with a large existing backlog of applicants for immigration.

This backlog was created by a Liberal government policy enacted in 2002, which promised consideration for immigration permits to anyone who had paid a small submission fee. The backlog consists of about one million applicants and keeps on growing, in spite of the fact that the government has increased the acceptance of applications and raised the level of immigration to the highest levels in decades.

Here is my message to the Committee:

Let me begin my presentation with a radical proposition. The question before this committee should be whether or not to get rid of the backlist altogether, not on how to make is shorter.

The question about the best immigration levels to shorten the list involves a moral, bureaucratic, political and practical morass. As you will have noticed already, no witness has produced any objective criteria for determining the number of immigrants. The reason is simple. There are none. All recommendations of numbers are basically arbitrary and driven by hidden moral and political motives.

Let me suggest that instead moral and political criteria should be replaced by the following fundamental principles:

• Let us set policies so that immigrants benefit Canada, not so that Canada benefits immigrants – a slogan clearly inspired by President Kennedy’s famous “Do not ask what the country can do for you, ask what you can do for the country”.

• Let us use our country’s desire to help foreigners only after we have provided adequately for the many of our compatriots who need healthcare, caregivers, housing, special educational attention, help with their addictions and many other problems. If we want to contribute to the welfare of foreigners, let us continue to admit genuine refugees and send foreign aid to the needy abroad.

My suggestions are based on the realization that there is almost universal agreement among economists that immigration has no significant positive effect on the incomes of Canadians but if it involves large numbers, depresses wages and raises profits, effects which are deemed undesirable by many citizens.

This traditional view on the merit of immigration that I have taught and written about for decades as a professor of international economics has become obsolete with the existence of the welfare state in which everyone in Canada is entitled to a large array of social benefits and the progressive income tax system requires recent immigrants with average low incomes to pay fewer taxes than the average Canadian.

In a joint study with Patrick Grady, we have estimated that these provisions of the welfare state are putting a fiscal burden of about $20 to $30 billion on Canadians every year. Since we do not wish to get rid of the welfare state, immigration does not benefit Canadians. Instead, it results in higher taxes and contributes to the current deficit.

All traditional arguments about the merit of immigration are bogus and do not stand up to careful analysis. To mention just a few of these arguments, immigrants are not needed to fill job vacancies, in fact they can create shortages with their demands for housing, infrastructure and doctors. They do not solve the problem of unfunded liabilities of social programs and may worsen it. Their contributions to multi-culturalism are marginal and at the border line of becoming negative. Many countries without immigration are doing very well indeed economically and socially, from Korea and Singapore, to China and India.

For these reasons, I recommend that we should adopt policies, which bring into Canada only immigrants who pay taxes high enough or have access to funds that match the costs they impose on our social programs.

Before I offer some thoughts on a system for attaining this objective, let me present my radical proposal for dealing with the backlog. Simply, pass a law, which repeals the existing legislation promising that anyone who pays a fee is guaranteed consideration for an immigrant visa. Dissolve the existing backlog by sending each applicant a letter saying, in diplomatic language of course, that “the parliament has decided that Canada is no longer obligated to consider your application. Attached to this letter is a refund of the fee you have paid, including interest.”

Parliaments pass this kind of legislation all the time. The Wheat Board will be dissolved. The Gun registry will be scrapped. The National Energy Policy no longer exists. Transfers to the Provinces were changed in the 1990s. I could go on, but the point is clear. No past legislation is immune from change or repeal by current parliaments. All such changes are accompanied by much opposition and debate, sometimes very heated, but this is not something to be regretted or feared. It is intrinsic to democracy. Elections are the ultimate arbiter of the public on the merit of such changes.

Now to a brief discussion of an immigration policy that brings benefits to Canadians living in the welfare state. Issue immigration visas only to applicants who have a pre-approved employment contract at a pay at least equal to the average earned by Canadians and subject to passing normal health and security standards. Parents and grandparents should be given such visas only if their offspring posts a bond large enough to cover their expected costs of healthcare and pays for their living expenses they might need. Under these provisions, immigrants no longer impose fiscal burdens on Canadians.

The principle underlying my proposal is simple and clear. Let market signals, not politicians, technocrats and vested interests determine who should be admitted and how many immigrants should enter Canada annually. Relying on market signals in the operation of the economy has served Canadians and the rest of the world well. It should do so for the selection of immigrants.

Let me conclude with some observations about the politics of immigration policy. Recent opinion surveys show clearly that most Canadians are in favour of reduced levels of immigration or the maintenance of current levels.

In considering these survey results it is important to note that these sentiments are strongest in the country’s largest cities, where immigrants have settled in the past but where, importantly also, the largest numbers of parliamentary seats are at stake.

Through my own limited contact with immigrants I have noticed that they are very much aware, more than the average Canadian, of the cost immigrants impose on us, fiscally, through congestion and pollution, high housing costs and other channels.

For these reasons, parties that embrace policy reforms of the sort I am proposing can expect electoral gains rather than losses in ridings in which immigrants reside in large numbers. To verify the correctness of my views, I urge politicians to make their own surveys and remain critical of survey results produced by organizations that may be supported by the immigration industry and allege to show that Canadians want more immigrants.

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