How immigrants add economic value to Canada

By Iain Reeves

Image credit: Conference Board of Canada

In the short term, spending by immigrants can help fuel economic recovery, while the availability of immigrant labour will be essential in restoring the restaurant and hospitality sectors.

The federal government’s latest efforts to make it easier for immigrants with Canadian work experience to become permanent residents is another sign it’s committed to attracting more immigrants.

Clearly, federal officials are convinced of the social, economic, and labour-market benefits of high immigration levels.

But what does their approach mean for the immigrants who will arrive at this challenging time? And what might this period teach us about our immigration system?

Earlier this year, Immigration, Refugees and Citizenship Canada invited 27,322 people to apply for permanent residency as part of the Express Entry program’s “Canadian experience” class. This draw from the pool of registered candidates was five to 10 times greater than the usual number of invitations made in a single draw.

The increase was made possible by significantly lowering the points threshold to qualify for an invitation to become a permanent resident. These points are awarded for a variety of social and human-capital reasons that align with long-term integration and economic resiliency, such as: education, age, knowledge of an official language, and experience living in Canada as a temporary resident.

This is the second major step by the federal government to ensure we continue to attract immigrants in large numbers, despite the COVID-19 pandemic. Last October, Ottawa updated its three-year immigration plan with record targets culminating in 421,000 arrivals in 2023.

The new targets were warmly received by immigration advocates who hoped the federal government wouldn’t follow the lead of many other countries by restricting immigration because of the pandemic and the recessions caused by its associated public-health measures.

However, even advocates are skeptical that Ottawa can attract 401,000 immigrants in 2021 – not because of a lack of demand, as Canada’s appeal as a destination for emigrants has only increased during the pandemic. Rather, they fear that continued travel restrictions, and the news that mass vaccinations won’t arrive in Canada until this fall at the earliest, will have a dampening effect on immigration.

Even in 2020, the government relied heavily on those already in Canada to boost invitations for permanent residency. Research by the Conference Board of Canada shows that 60 per cent more permanent-resident “arrivals” were already in Canada than in the previous two years.

The latest move is a doubling-down on this strategy, and leans heavily on temporary workers and students who are already in the country.

In this way, Ottawa is making a clear trade-off. It’s prioritizing its immigration targets and devaluing the very high social-capital standards that underpin Canada’s system of economic immigration.

So how do we assess this trade-off?

The long- and short-term benefits of maintaining high immigration levels are clear. In the long term, immigration fuels economic growth, improves our ratio of working-age Canadians to retirees, creates more tax revenue, and supplies skilled labour to key sectors. Economic and population modelling by the Conference Board of Canada demonstrates that more immigration benefits the economy.

In the short term, spending by immigrants can help fuel economic recovery, while the availability of immigrant labour will be essential in restoring the restaurant and hospitality sectors, for instance.

Therefore, the government has good reasons to want to get as close to its immigration targets as possible, despite the challenges of COVID. The pattern of relying on immigrants who have Canadian experience, but lower social capital, might continue as long as significant travel restrictions remain.

But this doesn’t mean immigrants who arrive during this period won’t be successful or contribute as much to the Canadian economy. Our economic modelling indicates that even immigrants with comparatively lower social-capital attributes — for instance, refugee and family-class immigrants — still make significant contributions to the economy, especially over time.

Also, most newcomers with experience living in Canada will already have Canadian work experience. This helps with future job searches, as employers tend to assess Canadian experience more favourably than foreign work experience. They will also arrive at jobs with a better understanding of Canadian culture and workplace norms, and greater facility with our official languages, neither of which may be their first.

There is great short- and long-term economic value in trying to reach Canada’s immigration targets. In closely observing the progress of immigrants who arrive during and just after the pandemic, we can learn a lot about the value of Canadian experience, compared to other social-capital factors.

The key is not to let individual immigrants suffer for the sake of Canada’s economy and our understanding of the integration process. They should be monitored closely, and both government and the immigration sector should be prepared to offer additional support if they struggle.

• This op-ed was originally published in iPolitics on March 1, 2021. Courtesy: Conference Board Of Canada.