Economists say it makes no sense for Canada to increase immigration during the pandemic
I struggle to understand how increasing immigrant entries in the midst of an economic crisis with historically high and rising levels of joblessness will aid our short-term economic recovery. It is unusual for countries to significantly increase immigration levels during recessions, for good reason. Mikal Skuterud
Canadian economists are questioning why Ottawa is setting record immigration targets in the middle of unprecedented unemployment caused by the pandemic.
More than 1.7 million Canadians are looking for work, and the economists are warning that the Liberals' aggressive new target of more than 400,000 new immigrants in 2021 will likely hurt the country's low-skilled workers, particularly those who have recently become permanent residents.
“It makes no sense,” says University of Waterloo economist Mikal Skuterud, who specializes in Canadian immigration and the labour market. An immigrant himself, Skuterud is joining other economists in questioning why Ottawa has officially claimed its elevated targets are “crucial to Canada's short-term recovery.”
Even though Skuterud strongly advocates immigration, particularly for humanitarian reasons, he wonders why the Liberals this month drastically lowered the standards for the skills expected of those looking to become Canadian citizens through the country's economic-class express-entry program.
“As an economist who has studied Canadian immigration for more than two decades, I struggle to understand how increasing immigrant entries in the midst of an economic crisis with historically high and rising levels of joblessness will aid our short-term economic recovery,” he said. “It is unusual for countries to significantly increase immigration levels during recessions, for good reason.”
Largely because of COVID-19 travel restrictions, Canada's immigration levels fell to 184,000 in 2020, short of Ottawa's target of 341,000. The new goal of more than 401,000 over each of the next three years is 60 per cent higher than the 2015 level, when Prime Minister Justin Trudeau's Liberals were first elected.
Despite the economic benefit claims made by Immigration Minister Marco Mendicino, Skuterud is not alone in pointing out that high immigration bolsters Canada's gross domestic product, but doesn't necessarily improve GDP per capita. U.S. Senator Bernie Sanders, who unsuccessfully ran on the Democratic Party's left for the presidential nomination, is among those who have been criticizing right-wing business people who want more open borders so they can bring in migrants who will work for low wages.
“I continue to be baffled at how the increased immigration-is-crucial-for-canada's-economic-survival narrative has taken hold of our policy discourse. I challenge anyone to find me an academic economist that studies Canadian immigration who believes this narrative,” Skuterud said.
“Increasing immigration in the current economic crisis will come at a cost. But that cost won't be born by the loudest proponents of this narrative: Businesses who benefit from queues of jobless workers, banks selling mortgages, real estate and immigration law firms.”
The actual cost will fall on “recent immigrants and Canadian workers competing for scarce jobs in the same labour markets.” Canada's decision makers, he said, should show more concern for recent permanent residents.
Warning that Ottawa often sets its immigration targets without concern for their impact on the domestic labour scene, especially on low-skill workers, Skuterud cited the work of professors David Green and Craig Riddell at UBC'S Vancouver School of Economics, and Carleton University's Christopher Worswick.
Green, Riddell and Worswick have cautioned both critics and boosters of high in-migration to temper their often-overblown rhetoric; noting, for instance, it's not numerically possible to use immigrants to substantially replace aging baby boomers in the Canadian workforce.
Immigration policy creates “winners and losers,” says Green, and the losers include relatively recent permanent residents who can be financially hurt when a new wave of immigrants arrives soon after them. Foreign-trained high-tech immigrants who came to Canada in the early 2000s, Skuterud said, were particularly hit hard by this phenomenon.
Skuterud agreed with Sanjay Jeram, a Simon Fraser University political scientist, who says there is an unfortunate “hidden consensus” in English-canadian media and politics, unlike in Quebec and in other countries, that makes debate of immigration policy a taboo.
“Our biggest problem in this country is we don't discuss our objectives” in regards to immigration. Only a minority of the world's countries welcome immigrants. And those that do, Skuterud said, normally tie immigration levels to the country's economic performance.
The last Canadian prime minister to lower immigration rates was Pierre Elliott Trudeau, father of Justin, who did so in the early 1980s in the face of high unemployment. By the 1990s, however, Skuterud said, Conservative prime minister Brian Mulroney decided that immigration rates would no longer be linked to employment levels.
In his new book, The Expendables: How The Middle Class Got Screwed by Globalization, best-selling Canadian author Jeff Rubin, former chief economist for CIBC World Markets, maintains high-skill workers have less to worry about from the free movement of trade and humans than lower-skilled recent immigrant and domestic-born workers.
While Rubin sympathizes with the 750 million people who Gallup pollsters have found want to permanently leave behind their low-wage country to move to a new country (including 44 million who hope to come to Canada), Rubin says large-scale immigration has often increased competition for jobs in marginalized communities, particularly in the U.S. among Black Americans.
Given that immigrants with high skills, including in the technology sector, generally do better than those with less education, Skuterud can't figure out why Ottawa has drastically reduced its standards for the 27,332 people it invited this month to apply for permanent residency through its latest express-entry effort.
A cut-off score is set for each express-entry draw. Typically, the minimum score for those in the economic-class pool is above 400. This time, however, the points threshold for the draw was just 75. That essentially allowed all available candidates (mostly people already in the country) to qualify, regardless of whether they're well over 40, speak English or French, have degrees or have Canadian work experience.
Ottawa's serious attempts to make it make it much easier to become a permanent resident of the country are also coming at the same time the federal Liberals have extended an expensive range of COVID-19 financial benefits to an extraordinarily large number of unemployed people. That's not a healthy labour market for new migrants.
Even though Skuterud is not necessarily arguing for Canada to reduce immigration levels to pre-2020 levels, the University of Waterloo professor questions why Ottawa is pushing “the narrative that immigrants make us all richer” during a major recession caused by a devastating pandemic whose end no one can really predict.
“It's at best naive and at worst dishonest.”