Canada’s Housing Strategies in Perspective

The federal government’s newly announced housing strategy is a sham. It will do nothing to end the rapid rise in the cost of housing because it does not address excess demand, which according to the iron law of economics, drives up prices. The excess demand has persisted for many years because the supply of housing produced by the private sector has been insufficient to meet the demand.

This failure of the private sector is due mostly to municipal regulations that require the completion of red tape and use much costly time to issue building permits, prevent the creation of greater population density and the construction of housing on land dedicated to other uses like agriculture and parks. Municipal politicians are aware of this problem, but easing them has been prevented by the political opposition from influential voters.

 

Municipal politicians have faced less opposition to the imposition of taxes on speculating foreigners, who have no votes in elections, but this policy has no impact on supply. Speculators typically hold their purchases for only a limited time since they have to sell their investments to realize their profits. As a result, speculators merely move forward in time price increases that would otherwise have taken place later.

At the same time municipal politicians maintain rent controls, which protect them from the loss of votes by renters but which reduce the supply of housing

Municipal politicians unwilling to deregulate the housing sector or eliminate rent controls have pressured the federal government to end the housing crisis by adopting policies that increase supply. The response by Ottawa has been the adoption of a “housing strategy”, which was announced with great fanfare. It promises to lead to the construction of up to 60,000 new homes over the next 10 years, the repair of up to 240,000 existing community homes and the payment of rental subsidies of up to $2,500 annually to 300,000 needy families.

The policy adds only 600 new houses a year to the supply in all of Canada, which is shown below to be trivial given the annual additions to demand. The renovation of existing stock will not increase supply and subsidies to renters will, if anything, increase the demand for housing.

The federal housing strategy is silent on the demand for housing, which is determined mostly by the growth in population through natural increases (birth minus deaths) and immigration from abroad. In recent years the growth in population has been dominated by immigration, which during the years 2006-2016 (net of emigration) has increased Canada’s population by 240,000 annually, which is equal to 65 percent of the total increase of 3.8 million (http://www5.statcan.gc.ca/cansim/a47).

Assuming that on average three immigrants make up a family requiring housing, immigration policies have added an average 81,126 housing units a year to the country’s demand. This figure will rise to 120,000 a year by 2020, when immigration will reach the government target of a maximum 360,000. That year the federal housing strategy will provide 6,000 housing units above those created by the private sector, which clearly is a sham.

However, this is not the end of the story. Immigrants tend to settle predominantly in the metropolitan areas of Vancouver, Toronto and Montreal, which in 2011 have received 14, 37 and 15 percent of all immigrants, respectively (http://www.metrovancouver.org/). For the Vancouver area this means that during the 2006-2016 period an average 11,357 immigrant families have settled there, which means that they have demanded 947 housing units per month or about 237 per week. The analogous figures are 625 for Toronto and 257 for Montreal. By 2020 these numbers will rise by 50 percent as a result of the announced higher level of immigrants.

The implication of the foregoing analysis is that to prevent the development of an ever increasing housing crisis, municipal governments will have to relax existing regulations to increase the supply of housing. Increased federal subsidies would help, but to be effective they would have to so high as to add intolerable amounts to the fiscal deficit.

Therefore, the only federal policy with any chance of dealing successfully with the housing crisis is to reduce immigration levels to perhaps 50,000 or 100,000 a year for a limited time. Once the private supply of housing has eliminated the backlog and prices have stabilized, immigrant numbers can be raised again to levels reflecting the economy’s absorptive capacity and their contribution to the well-being of Canadians.

Thriving Nationalist/Anti-Immigrant Parties in Europe Why not in Canada?

The German federal elections on September 24, 2017 produced an electoral earthquake. The country’s ruling coalition headed for 12 years by Germany’s Chancellor Angela Merkel lost its majority, mainly because of the success of the nationalist/anti-immigrant party Alternative for Germany (AfD), which won 97 seats, up from zero in the preceding elections. On November 16^th, Merkel made unprecedented announcement that she had been unable to form a new governing coalition and refused to head a minority government, preferring a new election instead.

Nationalist/anti-government parties in other important countries of Europe also have gained much support from voters. The percentage of the total vote and the number of seats gained in these countries after the most recent elections were:

Switzerland 29.4 and 65/200; Denmark 21.1 and 37/179; Austria 26 and 51/183; Finland 17.7 and 38/200; Norway 15.2 and 27/169; Netherlands 13.1 and 20/150; Sweden 12.9 and 49/349; Germany 12.6 and 97/631.

In France the National Front in 2017 received 13.2 percent of the votes, more than the percent gained by the AfD, but because of the country’s electoral system gained only 8 out of 377 seats in parliament. In Poland the Law and Justice party received 37.6 percent and with a majority of 235 out of 460 seats has formed the government. Nationalist/anti-immigrant parties have also been successfully attracting votes in the Czech Republic, Hungary, Bulgaria, Latvia and other former communist countries of Eastern Europe.

Voters dissatisfied with their countries’ immigration policies also played important roles in the victory of the British referendum that led to Brexit and of President Donald Trump in the United States.

The platforms of the nationalist/anti-immigrant parties in Europe appealed to voters who had personal experiences and learned from media reports that immigrants were responsible for many growing social and economic ills in their lives: the number and scope of terror attacks and criminal acts; threats to cultural and religious institutions and practices; the cost of housing; the crowding of schools, hospitals and public spaces and the scarcity of jobs taken by immigrants.

The establishment politicians in the countries with strong nationalist/anti-immigrant parties obviously have not been able to counter these views by claiming that their supporters are  racist, xenophobic and fascists and that they do not understand the large benefits brought by immigrants: the elimination of labor shortages; reductions in the financial problems of social programs; increases in global solidarity with needy people in the rest of the world and the benefits of greater cultural and religious diversity.

Canadian politicians and intellectual elites have been ignoring the growth of nationalist/anti-immigrant parties in Europe. The current government has instead increased the planned annual number of immigrants from the recent 250 thousand to a high of 360 thousand by the year 2020.

It seems that this policy is out of touch with the views of the public. An Angus Reid poll in the middle of 2017 found that 57 percent of Canadians agreed with the statement that “Canada should accept fewer immigrants and refugees.” The latest annual poll by the federal Department of Immigration reported in November 2017 that increasing numbers of Canadians hold negative views about the current level of immigration.

Why the persistence of the difference between government and public views on immigration policies? The answer is that Canada uses the first-by-the-post system to allocate seats in parliament. In Europe most countries use proportional representation to assign seats, which enabled the creation and success of the nationalist/anti-immigrant parties.

Canada’s establishment parties will not abandon the present electoral system. Their assured protection from anti-immigrant parties brings them too many opportunities to use immigration policies to buy the votes of employers of cheap immigrant labor, the firms and professionals wanting larger domestic markets for their output, the real estate and construction industries, the communities of recent immigrants and the immigration industry of lawyers and consultants – even as they know that the public disapproves of the mass immigration they create.

The majority of Canadians who want to see fewer immigrants will have to wait a long time before they get their way.

This essay has been published in the Vancouver Sun on December 8, 2017:

https://www.pressreader.com/canada/vancouver-sun/20171208/281681140215066

SUPPLY MANAGEMENT AND THE INTEREST OF CONSUMERS AND FARMERS

This article has been published in the Fraser Institute Blog found at SUPPLY MANAGEMENT AND THE INTEREST OF CONSUMERS AND FARMERS

A leading politician recently explained to me why the last Conservative government in Ottawa did not abolish supply management: “It was not in the party’s interest”, implying that in fact it would have been in the public interest to have done so.

   

Why all governments since the inception of the system in the 1970s allowed the party over the public interest to dominate is easy to explain. The beneficiaries of the system spend large amounts of money lobbying politicians to retain it and punish those who do not. On the other hand, for the vast majority of voters the existence of supply management and the costs it brings are of relatively little importance and politicians would expect few electoral gains from ending the system. In fact, the results of a recent Angus Reid poll revealed that 58 percent of Canadians had “no idea” and 38% “knew little” on how the system works and therefore how much it costs them.[1]

However, the status quo is now threatened by President Donald Trump’s demand for an end to Canada’s supply management system during the renegotiation of the NAFTA treaty.[2] As a result, Prime Minister Justin Trudeau’s Liberal government faces a problem. If it insists on maintaining the system, US negotiators will demand reciprocal concessions that decrease Canadian exports, the exchange rate, employment and economic growth. 

If, on the other hand, the Liberal government agrees to abolish supply management, consumer prices will fall and the present level of US restrictions on Canadian exports will be maintained or even lowered and bring other benefits to the middle class the Liberals have promised to help.

The loss of the current electoral and financial support from the beneficiaries of the system can be made up by a government program explaining to voters why this policy is in their interest. The focus of such a campaign should be the simple explanation of how this system operates and how it affects their cost of living.

The explanation[3] should start by pointing to a very important and simple fact: Anyone in Canada who wants to produce or import dairy products, poultry and eggs and sell them must buy a quota from other farmers or face persecution resulting in fines or jail. With the ownership of the quota comes the right to sell a specified amount these products at prices fixed by a government-sanctioned association of producers.

By controlling the quantity of quotas in the market, this association determines the total amount produced and thus the prices at which demand equals supply in Canada. These prices are supposed to allow farmers to pay their capital and running costs and earn a normal profit. In fact, however, they are higher by amounts farmers need to pay the interest on the loan they had to take out to purchase the quota. Recently, according to a non-profit organization that represents Alberta’s dairy producers, the cost of a quota in Alberta came to $36,000 per cow or $3.9 million for an average-sized dairy herd of 108 cows.[4]  

The very existence of the quota price, which is found on the internet,[5] is incontrovertible evidence that consumers in Canada pay more for dairy products, poultry and eggs than it costs farmers to produce them and that without supply management consumer prices for these products would be lower. How much lower would these prices be? According to one recent peer-reviewed publication[6] the average family in Canada would save $444 annually. This burden is greater for the poor and families with children smaller for the rich and childless.

One reason why politicians may have been reluctant to end supply management in the past is that it will conflict with Canadians’ sense of fairness and will bring financial hardships or even bankruptcy to farmers whose income is curtailed but whose debt obligations remain, all caused by governments and for reasons beyond their control.

The government can deal with this problem by creating a financial adjustment program, the basic features of which are found in Australia’s recent experience.[7] That country in 2000 had ended supply management and assisted farmers through quarterly payments over eight years. Farmers leaving the industry were paid a lump sum.

An important feature of the program was that its cost was covered not by funds drawn from general government revenue but by the imposition of a surcharge of 11 cents per litre on the buyers of milk scheduled to last eight years. These costs in effect are an investment lasting eight years, which will bring a return of lower milk prices into the indefinite future.

It was not easy to design a compensating package that was fair to all Australian farmers and it would not be easy to do so in Canada, especially since the termination of supply management will impact farmers differently, depending on the time and price at which they had obtained their quotas. Some had received them free of charge when the system was created in the 1970s while the rest have enjoyed gains in the ever increasing value of their quotas depending on the time of their purchase. Most seriously hurt would be farmers who had bought their quotas recently.

However, these issues of compensation can and will be overcome simply because ending supply management will bring large and lasting benefits to Canadian consumers and in addition, will remove one of the greatest irritants in Canada’s relations with its global trading partners, increase economic and personal freedoms and allow free market forces to improve through time the quality, variety and costs of all agricultural products.

References:

Alberta Milk (2017), “How much does quota cost for a 108 cow dairy?”, found at https://albertamilk.com/ask-dairy.../how-much-does-quota-cost-for-a-108-cow-dairy/

Canadian Dairy Information Center (2017), Monthly Milk Quota Exchange, found at http://www.dairyinfo.gc.ca/index_e.php?s1=dff-fcil&s2=quota&s3=qe-tq

Cardwell, Ryan, Chad Lawley and Di Xiang. 2015. “Milked and Feathered: The Regressive Welfare Effects of Canada’s Supply Management Regime.” Canadian Public Policy 41(1): 1-14.

Edwards, Geoff (2003), “The story of deregulation in the dairy industry”,  The Australian Journal of Agricultural and Resource Economics, 47:1, pp. 75–98 *

Globerman, Steven and Christopher Sands (2017), The Fate of NAFTA: Possible Scenarios and their Implications for Canada, The Fraser Institute, found at https://www.fraserinstitute.org/sites/default/files/fate-of-NAFTA-possible-scenarios-and-their-implications-for-canada-execsum.pdf

Grubel, Herbert and Richard Schwindt (1977), The Real Cost of the BC Milk Board, The Fraser Institute, found at https://www.fraserinstitute.org/sites/default/files/real-cost-of-the-bc-milk-board.pdf

Reid, Angus (2017), “Supply Management: Most Canadians say scrapping system should be on the table during NAFTA talks”, found at http://angusreid.org/supply-management-nafta-renegotiation/

---

[1] See Reid (2017)

[2] For a discussion of the demand and broader issues surrounding it see Globerman and Sand (2017).

[3] For an early study of supply management and its cost see Grubel and Schwindt (1977)

[4] See Alberta Milk (2017)

[5] See Canadian Dairy Information Center (2017)

[6] See Cardwell et al (2017)

[7] See Edwards (2003)

LOWER IMMIGRATION TO CATCH UP

This article has been published in the Vancouver Sun on October 2nd, 2017. It is found at http://vancouversun.com/opinion/op-ed/opinion-curb-immigration-to-let-housing-catch-up-to-demand

Joffre Lakes Provincial Park is one of the most scenic recreation areas in Canada, if not the world. A 500 meter walk from the road reaches a small turquoise lake, an exhilarating five kilometer hike after two hours and an altitude gain of 400 meters reaches a second, a further 30 minutes a third lake. The path goes through an ancient forest, across avalanche chutes covered with slide alders and is bathed in the sound of rushing waters from a nearby creek and waterfalls.

The views from the lakes are spectacular. Evergreens line the shores and the waters reflect the sight of the large glacier descending from the 2,700 meters high Joffre Mountain. The highest lake is so close to this glacier that one can see serrated columns of ice and occasionally thundering falls of ice and rocks.

On this year’s Labour Day Sunday my wife’s and I drove to the park, where we encountered a traffic jam near the entrance and a long search for the last spot in one of three parking lots. The wait for the use of the single toilet at the start of the trail was 20 minutes. An RCMP officer at the scene told me that these conditions prevailed also during weekdays in the summer.

On the hiking path, we stopped every few minutes to let lines of younger and more vigorous hikers pass us. As we found out later, these hikers had parked on the side of the road, obviously willing to pay the tickets that a large sign had announced. It simply made more sense for them to pay this fine than to drive 3-hours back to Vancouver without stopping at the Park. Most unpleasant were the large crowds at the prominent viewpoints at the lakes, which offered standing room only and were bathed in loud chatter spoiling the normal silence of the environment.

Such unpleasant overcrowding of the Joffre Lakes Park is typical of all recreational facilities in the Lower Mainland. It also afflicts the region’s roads, bridges, public transit, hospitals, schools, universities and water supply and most importantly, Vancouver’s housing market.
  

What causes these problems? The simple answer is that for these facilities demand exceeds supply, but for the design of remedial policies, the fundamental but also more difficult question is why is there this excess demand?

Currently, the most popular answer is a shortage of investment in housing and infrastructure. Governments for some time have adopted policies to remedy this situation. The very existence and growth of the excess demand is clear evidence that these policies are inadequate and are likely to remain so. The relief from recently announced increases in publicly subsidized housing will quickly be overwhelmed by the torrent of additional demand for it.

Popular are also policies designed to reduce demand. They are focused on the housing market and involve taxes on foreign buyers, raising the cost of mortgages and reducing regulation. These policies at best have had only transitory effects on demand for housing. More investment in infrastructure has been promised by all parties at every election but obviously has failed to eliminate the problems.

However, there is one simple way to reduce demand. Lower immigration from the present rate, which sees about 250 new immigrant families settle EVERY WEEK of the year in Greater Vancouver. This rate of increase has brought the total population of British Columbia from 2.2 million in 1972 to 4.8 million in 2017. The projection that it will reach 6.0 million in 2037 strongly suggests future worsening of excess demand.

Parliament could easily reduce the number of immigrants temporarily from the present national 300,000 per year to 50,000. While in place for perhaps five years, the construction of housing and investment in infrastructure can catch up with demand. Thereafter, the number can be raised again but only to a level equal to the economy’s absorptive capacity marked by the sustainably matched demand and supply in housing and of infrastructure services.

Canadians really face no costs resulting from such a temporary reduction in the number of immigrants. Politicians proposing this policy run the risk of electoral losses from some powerful interest groups, but these could easily be exceeded by the gain in votes from suffering Canadians who benefit from it and let the politicians know about their preferences.

What Motivates Kim Jong-un and Why it Matters

In April I traveled to Seoul to deliver a paper at a conference of economists and public policy experts. On this occasion I learned much about life and politics in Korea by touring the Korean War Museum, an art museum, a university, a hospital, historic palaces, commercial centers and the Demilitarized Zone. Most informative were discussions with local leaders, academics, doctors and a general who recently had commanded the US forces stationed in Korea.

This visit to Korea has caused me to take more than the usual interest in the current political problems surrounding North Korea’s development of a nuclear arsenal and missile delivery system. I therefore eagerly attended a public lecture on the topic delivered by Paul Evans, a specialist on Asian Pacific international relations at the University of British Columbia who has served on a number of committees that regularly advise governments on the politics of the region.

To my surprise Evans argued that Kim Jong-un’s development of a nuclear arsenal is the result of his belief that the United States was planning to invade his country and destroy his regime. This long-standing belief explains North Korea’s maintenance of one million soldiers on active duties that are backed by several million reservists and paramilitary units. These troops are equipped with thousands of tanks and artillery pieces capable of using chemical and biological agents soon missiles equipped with nuclear warheads.

Evans’ interpretation of the reasons for North Korea’s nuclear policy leads him to the conclusion that the country’s fear of invasion and its aggressive rhetoric can be ended by the withdrawal of US troops from South Korea and regional military bases.

However, many experts disagree with this recommendation on the grounds that Kim Jong-un’s policies are not motivated by national security concerns but the ideologically driven desire to create one communist Korea on the Peninsula. This goal has motivated North Korea’s policies since 1945 when the cold-war foes United States and Russia agreed on the creation of the two countries north and south of the 38^th parallel.

This view of North Korea’s true motives is backed by strong evidence. The Korean War was started when in 1950 the North Korean army invaded the South Korea in a surprise attack and without any provocation or threat of an attack on its territory.  That war ended in 1953 with North Korea agreeing only to a cease fire not a peace treaty, signaling that it did not accept the permanent division between the two countries. The country’s recently created nuclear capacity is not needed to defend its territory from invasion but to support its grand scheme for a unified Korea.
 

This grand scheme includes North Korea’s use of its nuclear capability to blackmail the United States into withdrawing its troops from South Korea or face a nuclear missile attack on its territory. The experts believe that if this threat causes the United States to withdraw its troops and prevent it coming to the aid of the South Korean army in case of a military conflict, North Korea will invade South Korea, defeat its army and establish a communist government.

If this analysis is correct, the challenge is not to persuade the United States to withdraw from the region but to persuade Kim Jong-un that the United States will never be blackmailed into withdrawing its troops and abandoning its support for South Korea. If he accepts this proposition, he will end his provocative rhetoric about attacks on US territories and the United States in return will accept the fact the North Korea is a nuclear power, as it has in the case of other countries like China, India, Pakistan and Israel.

President Donald Trump’s policies are designed to signal America’s resolve to resist the nuclear blackmail by North Korea. It is an open question whether this will be enough to persuade Kim Jong-un to end his provocations with or without offers of financial assistance and the ending of existing sanctions. Past efforts made in this spirit have failed and the world can only hope that they will be successful in the future.

Justin Trudeau needs to deregulate to innovate, but we didn’t see that in the federal budget

Canada’s 2017 federal budget failed to offer any plans for deregulation. This is ironic because regulations are among the most important obstacles to innovation, the holy grail of the government’s plan for future growth. Planned subsidies will not prevent the death of nascent innovations in garages or on desktop computers too small or distant from Ottawa to get the attention of the new, large federal bureaucracy.

The irony is worsened by the policies of President Donald Trump and the Republican Congress, which have begun to deliver on their promise to reform the regulatory system. As they do so, they will encourage Canadian innovators to move south to escape the costly time and red-tape paperwork they face here.

The American reform plans are the response to the staggering costs of existing regulations. Large banks claim that one worker is required to make sure that four others comply with regulations. Government regulations account for 24.3 per cent of the final price of a new single-family home. The burden of compliance is symbolized by the fact that in 2014 the Federal Register for Regulations mentions 1.1 million times the words “shall,” “must,” “may not,” “required” and “prohibited.”

The total cost of U.S. regulations has been estimated to have been US$1.88 trillion in 2015, not including the effect regulations have on future rates of innovation. This figure is equal to more than half of the federal government’s spending that year and while it is on the high end of available estimates, there is no doubt that the costs of regulation are enormous.

To deal with the cost of regulation and the public complaints it has created, Trump has issued an executive order that requires all regulatory agencies to eliminate two existing regulations for every new one they adopt. To prevent the repeal of only regulations that impose little cost, the savings they bring must be at least as great as the costs resulting from the new regulation. Trump also ordered a temporary stop to the hiring of all new government employees including those in regulatory agencies. In his first budget he proposed severe spending cuts for regulatory agencies, such as the 31 per cent facing the Environmental Protection Agency, and appointed known critics as heads of regulatory agencies, such as Scott Pruitt for the EPA.

Congress has also has gotten into the act. On January 6, 2017, it passed the awkwardly named Regulations from the Executive in Need of Scrutiny Act (REINS Act), which will return to politicians the right to approve or reject any new regulations that have an economic impact on the economy greater than $100 million a year. Even before the election, in 2016 the Republican majority in the House of Representatives introduced the Agency Accountability Act, which will require all regulatory agencies to transmit to the treasury fines and fees they have collected from the public, and which reduces their financial resources and incentives to impose fees and fines.

At the core of these reforms is the desire to return the regulatory process to elected politicians and away from unelected bureaucrats in regulatory agencies who, according to Senator Mike Lee from Utah, have created the conditions where: “Today, the vast majority of federal “laws” —upwards of 95 per cent — are not passed by the House and Senate and signed by the president as the Constitution directs; they are imposed unilaterally by unelected Executive Branch bureaucrats.”

Many Canadians will be appalled by the proposed regulatory reforms in the United States, fearing that polluters will again bring skies darkened by smoke and fish killed in rivers. These concerns are not warranted. The proposed U.S. reforms will not repeal such clearly beneficial regulations favoured by the public.

They will instead focus on regulations that bring ephemeral benefits, like those coming from regulations that are highly uncertain, like those aimed at the prevention of global warming and financial instability. The assessment of the net benefits from such regulations will again be made by politicians who reflect the values of the public and not by unelected bureaucrats who have chosen to work in regulatory agencies to advance leftist ideological goals.

Even if Canadians do not like American voters’ instructions to their politicians on regulatory reform, the failure to consider its implications will affect seriously all of the economic and social programs advocated in the 2017 budget. Regulatory reform should be on Canada’s agenda for public discussion and serious political consideration.

Published in the Financial Post on March 27, 2017

http://business.financialpost.com/fp-comment/justin-trudeau-needs-to-deregulate-to-innovate-but-we-didnt-see-that-in-the-federal-budget

Why did Canada increase Immigration Targets?

A couple of prominent members of Prime Minister Stephen Harper’s  cabinet told me that their government’s immigration policies had been “purely in the interest of the party,” which logically means that they were not in the public interest. There is no doubt that the recently announced increases in immigration by Minister of Immigration John McCallum are also purely the interest of the Liberal party.

     So how do politicians get away with making immigration policies that advance their own interests at the expense of the general public? The Liberals just showed us how to do it: Appoint a commission of experts with a fancy name like Advisory Council on Economic Growth, staff it with people you know to be in favor of vastly more immigration, publicize the council’s recommendation and wait for some Libertarians like Terrance Corcoran and Andrew Coyne to support it enthusiastically in the mass media. 

     Then have the Minister of Immigration appear moderate and wise by announcing an increase in immigration by only 15.4 percent from 260,000 to 300,000 rather than the 73 percent to 450,000 recommended by the Council. 

     How does mass immigration serve the interests of political parties? It brings financial and electoral support from employers who profit from being able to employ low-skilled and high-skilled labour at wages that are lower than what they would have to pay for Canadian workers. Electoral support also comes from the owners of real estate, developers and brokers, construction workers and mortgage brokers that gain much from the increased business immigrants bring.

     Parties also gain support from immigrant communities who expect to gain political and economic clout, enjoy having family members join them and benefit from larger markets for ethnic products and media. Support also comes from the large “immigration industry” of social workers, lawyers and language teachers who are paid by the government.  

      These groups benefiting from mass immigration lobby the government effectively while the general public is unorganized and does not. To the contrary, the public is lobbied by the government, which issues a constant flow of propaganda about the alleged economic and social benefits from mass immigration and suppresses the distribution of fact-based accounts of the negative effects.

      The government also issues highly misleading information about the 172,500 “economic migrants” who will be selected in 2017 for their likely economic success. In fact, assuming an average family size of four, only 43,125 of them will be truly economic immigrants, the rest will be their spouses and children. Many will later be joined by their parents and grandparents who will number 20,000 in 2017 and contribute very little to the economy.

      The success of this shielding was revealed on the occasion of a recent Munk debate at the University of Toronto, which pitted advocates in favor against advocates against admitting more refugee claimants. In a poll taken before the debate, 75 percent of the audience wanted more refugees. After the debate and the presentation of facts by the con-side, only 55 percent of the audience still held this view, a figure likely to become even smaller as the audience digests the facts more fully. 

      Information about many negative effects of mass immigration is kept from the public. For example, recent immigrants, even after many years in Canada have lower incomes and pay lower taxes while they absorb the same government services as Canadians. As result, immigrants impose a fiscal burden of $30 billion a year on taxpayers, which will grow all the time with the arrival of new immigrants. For a perspective on this figure, consider that there is much debate over the affordability of spending $30 billion to renew the Canadian navy over the next 30 years!

     Canadians suffer from the effects immigrants have on the cost of housing and the levels of congestion, pollution and overcrowding in schools, universities and hospitals, the latter especially as the many parents and grandparents of immigrants near the end of their lives and add to the every growing wait lists for medical treatment experienced by all Canadians. 

      Immigrants reduce the unfunded liabilities of the Canada Pension Plan but only for a limited time since they have the same age profile as Canadians and as they age stop paying premiums and receive benefits.

      Immigrants raise the total size of national income but not of individual Canadians since immigrants’ pay matches their contribution to output. The gains from the so-called “opportunities to trade” are very small, as are the claimed gains due to economies of scale in production since manufactures and mining companies already access world markets enabled by free trade and low transportation costs.

     Immigrants increase Canada’s cultural diversity but the benefits from it have reached diminishing returns and the development of ethnic enclaves threatens national harmony and security.  

     These and other facts about the detrimental effects of mass immigration on the well being of Canadians are well documented by government statistics and academic research. Unfortunately, governments and the beneficiaries of mass immigration have prevented these facts from reaching wide audiences and allowing political parties to continue the use of mass immigration policies for their narrow self-interest.

     However, the election of President Donald Trump shows that there is a limit to these policies. At some point suffering workers and taxpayers will vote for politicians who promise to put their interests above those of a political party, business and other groups. Voters in many countries of Europe have already done so. Could McCallum’s announced higher immigration levels have the same result in Canada?