The downside of immigration

Why Canada should not open its doors to the world

The refugee crisis in Europe has prompted many Canadians to demand that the government admit large numbers of refugees for permanent resettlement. Most of these demands are motivated by humanitarian sentiments but they are also supported by libertarians who argue for unlimited immigration on the grounds that it would benefit all Canadians, just like it has in the past, creating a country of social harmony, high incomes and a quality of life that is one of the best in the world.

The Post’s Terence Corcoran recently made this argument (‘Open our doors to the world,’ Sept. 11). However, the libertarian analysis is no longer valid in today’s world. First, there is no more fertile empty land on the prairies that requires immigrants to cultivate. In fact, technology used by farmers now is so efficient and labour-saving that people are leaving the land to settle in towns and cities.

Second, the cost and risk of travel are so much lower, while the pool of potential immigrants and the economic gains they can expect are so much larger than ever before in Canada’s history, meaning that an open border would result in a tsunami of immigrants.

Third, immigrants would no longer come from Europe, where populations are declining, but from Asia, Africa and Latin America. The cultures and values of these regions are much different, especially with regard to religious tolerance and the treatment of women and people with different sexual orientations.

In spite of the official policy of multiculturalism, these backgrounds are likely to delay integration into Canadian society and if the migrants are numerous enough, may well end up creating ethnic enclaves in which the occupants’ culture and religions are maintained. Such enclaves can lead to economic, social and political frictions. France, the Netherlands, Austria, Sweden and other Western democracies have such problems, which have led to the electoral success of antiimmigrant parties and further social tensions.

Fourth, many immigrants will be Muslims. Most of them are peaceful and tolerant, but an unknown, potentially large number will be militant jihadists and present a serious threat to Canadian security. Surveillance of this minority will be very costly and cannot prevent all risks. No such problems and costs have ever accompanied immigration before.

Fifth, the most important difference between modern Canada and when previous waves of immigrants entered this country is the existence of the welfare state. In the absence of its universal social benefits in the past, only healthy immigrants with strong work ethics, drive and skills came to Canada. Under present conditions, potentially many immigrants would not possess these qualities and impose heavy fiscal burdens on our welfare programs and ultimately bankrupt them. It is for this reason that Milton Friedman, one of the world’s most ardent advocates for human and economic freedom concluded that, “The wel- fare state and free immigration are incompatible.”

The problem identified by Friedman has been quantified in a study by myself and Patrick Grady, in which we found that the average incomes and tax payments of recent immigrants (documented by Statistics Canada) are much lower than those of the average Canadian and that the immigrants consume roughly the same amount of government services as the average Canadian. The difference between the taxes paid and services consumed by the average recent immigrant equals about $6,000 annually. Given the total number of these immigrants, the annual fiscal burden on Canadian taxpayers comes to about $30 billion.

Sixth, immigrants in large numbers cause a substantial redistribution of income, decreasing the incomes of workers and increasing the income of employers. Drawing on the basic results of a study of the redistribution effect in the United States by Harvard University Professor of Economics George Borjas, in Canada the decrease of the annual income of labour is $40 billion and the gain of employers is $43.5 billion, resulting in a net gain of $3.5 billion for the latter. This gain is called the immigration effect and is due to increased opportunities to trade.

Advocates for free immigration make much of this gain but the data show that it is very small relative to the redistribution of income. These advocates also laud the increase in Canada’s aggregate national income resulting from the im-

An influx of new immigrants could bankrupt our welfare state

migrants’ economic activities. However, all of this increase accrues to the immigrants in the form of wages, lowers per capita incomes and is accompanied by greater congestion and pollution in metropolitan areas. Increased demand for and cost of housing reduces the ability of young Canadians to own homes and start families, creating frictions between generations.

The economic and social costs just discussed do not make the case against all immigration but make the case for the selection of immigrants with prospects for economic success that are high enough to eliminate the fiscal burden and the admission of immigrants in numbers small enough to prevent the risk of creating the substantial redistribution of income, the establishment of ethnic enclaves, the threat of jihadist terror and the problems associated with substantial and rapid population increases.

In the context of the current debate over policies for the admission of refugees from the Middle East, it is important for all Canadians that these considerations are given proper weight in the selection of immigrants and decisions about their numbers.