Monthly Archives: June 2013

48% of Canadian Millionaires From Immigrant Families

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A new survey on Canadian millionaires finds that 48 percent are new Canadians and 68 percent are self-made (Government of Canada)

A new survey by BMO Harris Private Banking finds that nearly half of Canadian millionaires are either immigrants or have at least one parents born outside of the country.

The findings suggest a high degree of entrepreneurialism among the Canadian immigrant population, and contrasts with the theme of a recent special contribution to the Vancouver Sun that argues immigrants cost the Canadian $20 billion annually.

The survey further found that 68 percent of immigrant and first-generation millionaires report being self-made – about equal to the 67 percent rate among all Canadian millionaires surveyed.

The province of British Columbia has the highest proportion of millionaires belonging to an immigrant family, at 68 percent, while the rate in every other province is below 50 percent.

The BMO Harris Private Banking survey was conducted online by Pollara between March 28th and April 11th, 2013, using a sample of 305 Canadian adults with a net worth of over 1 million dollars.

Vancouver Sun: Immigration Costs Canada $20 Billion a Year

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Protesters in the U.S. calling for amnesty for undocumented workers. Simon Fraser University Professor Herbert Grubel says immigrants reduce wages for the native-born population while increasing employer incomes

In a special to the Vancouver Sun on Tuesday, a Simon Fraser University professor of economics, Herbert Grubel, argues that immigration costs Canadians up to $20 billion a year when all the costs and benefits are tallied.

Grubel, who is also a senior research fellow at the Fraser Institute, goes through some of recent findings on the economic effects of immigration from studies in various countries to come to his estimate.

The first is an American study which found that immigrants have increased the annual national income of the U.S. by $1.6 trillion, while receiving $1.565 trillion in labour compensation, with the remaining $35 billion going to natural-born Americans.

Extrapolating these findings to Canada, Grubel estimates the “immigration effect” results in $3.5 billion in increased income in Canada.

Another conclusion of the American study, says Grubel, is that immigration has resulted in a shift in income from workers to employers, with employer earnings seeing a $43.5 billion increase and worker earnings decreasing by $40 billion.

This redistribution of income, argues Grubel, results in calls on the government to increase taxes on employers and increase subsidies for workers, which harms incentives that promote productivity, which could cost the Canadian economy more than the $3.5 billion worth of benefits that the immigration effect provides.

In addition to the costs linked to the effects of immigration on employer-employee income shares, Grubel cites a study he helped conduct at the Fraser Institute that found that recent immigrants also increase the annual fiscal burden by $20 billion, because they pay half as much in taxes as native-born Canadians, while receiving the same government benefits.

Grubel says a recent French study has similar findings, with both studies assessing a per recent-immigrant fiscal burden that amounts to approximately 1 percent of GDP for Canada’s immigration population size.

Other supposed benefits of immigration are non-existent or negative according to Grubel. For example he says that the boost immigration gives to tax funds available for education and Social Security is offset by the increased costs it burdens these programs with.

Grubel concludes that Canada should reduce immigration and only admit those with a high enough income earning and tax paying potential to increase the average income of native-born Canadians.

Canadian Construction Industry Recovering

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A house under construction in Vancouver, British Columbia. Vancouver saw the biggest increase in the value of building permits issued in April among large Canadian cities

New data shows the value of building permits issued in Canada increasing for a fourth consecutive month, signalling a recovery in the country’s construction sector after a decline in late 2012.

A Statistics Canada report released this week shows that permits worth $7.0 billion were issued in April, 10.5 percent more than in March.

Much of the increase came from an increase in the value of multi-family dwelling residential permits issued, which at $2.1 billion in April, was a staggering 51.9 percent more than in March.

The development is welcome news to the Canadian construction sector, particularly condo builders, which saw a sharp decline in issued permit values, from a peak of $7.5 billion in October 2012 to a low of $5.7 billion in December 2012.

Among the provinces, British Columbia saw the biggest increase in the value of permits issued, reaching $978.3 million in April, 40.4 percent more than in March.

New Brunswick Government to Fund Intercultural Centre

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The Saint John city market. Canada’s only constitutionally bilingual province, New Brunswick, announced a new cultural centre that it hopes will assist immigrants settle and integrate in the city of Fredericton

New Brunswick Premier David Alward announced in May that his government would provide $2 million in funding to create a centre for ethno-cultural and settlement organizations in Fredericton.

The main tenant of the new centre will be the Multicultural Association of Fredericton, while the rest of the office space will be provided to other ethno-cultural and immigrants settlement service organizations.

Alward said the centre would advance the province’s goal of attracting skilled immigrants:

“Supporting this project is one way we can achieve this goal and attract and support more highly skilled workers and business immigrants.”

Post-Secondary Education Training and Labour Minister Danny Soucy added that the centre would increase the economic integration of immigrants by providing a central place where they can receive settlement services:

“These organizations serve an essential role in connecting with newcomers; creating needed support systems, facilitating labour market connections; and introducing new arrivals to their communities and neighbours. Bringing these services under one roof will help immigrants make the linkages necessary to participate fully in the community.”

The provincial government says the centre will also reduce costs for multicultural associations by adding scale to their services through resource sharing.

More than 5,000 immigrants have settled in Fredericton over the past decade.

Canadian Diplomats Around the World Walk Off Job In Strike

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The Canadian High Commission in New Dehli, India. The walk out by Canadian diplomats will affect visa and permanent resident application processing in 12 Canadian missions around the world, including in India and China (Wikipedia)

Canadian diplomats stationed in 12 missions around the world walked off the job on Thursday in a dispute with the federal government over compensation.

The diplomats are members of the Professional Association of Foreign Service Officers (PAFSO), a union and professional association representing foreign service officers working for the Department of Foreign Affairs, Trade and Development (DFATD) and Citizenship and Immigration Canada (CIC).

PAFSO is demanding a wage increase, saying its members are paid less than other employees of the federal government. The Globe and Mail provides an example of the difference in division salary schedules that PAFSO is protesting:

For example, an experienced foreign service officer on the level-2 pay scale makes about $83,000 a year, which would increase to about $87,000 under the Treasury Board offer, Mr. Edwards said. That would still be about $11,000 less than the salary of employees at the same level in the commerce division.

A spokesman for the federal government disputed the claim in a response to the Globe and Mail, saying foreign service officers receive other benefits that bring their total compensation up to the level of other public servants:

Mr. Conway added that foreign service officers receive additional benefits, including partial reimbursement for dry cleaning, help in shipping household belongings, a vehicle abroad and an incentive allowance for working outside the country.

Foreign service officers abroad can receive a “foreign service premium” of $6,600 to $31,300, depending on their seniority and the number of dependants accompanying them on a posting. A smaller, post-specific allowance is meant to help diplomats with the cost of travel.

The walk-off puts the federal government in a difficult spot, as much of its foreign operations, including Prime Minister Stephen Harper’s upcoming trip to Europe for the G8 summit, are dependent on foreign support staff.

Also affected will be visa and permanent resident application processing in large Canadian visa offices, including the ones based in China and India.

Canada’s Oil Production to Double By 2030 Thanks to Oil Sands -Report

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The Irving Oil refinery, Canada’s largest, in Saint John, New Brunswick. New pipelines from Western Canada to refineries in the East could increase Canada’s oil revenues while reducing energy costs to Canadian consumers and businesses (Wikipedia)

A new report by Canada’s largest association of petroleum companies projects that the country’s oil production will double to 6.7 million barrels per day (bpd) by 2030 as a result of increased production in Northern Alberta’s oil sands region.

The outlook, published by the Canadian Association of Petroleum Producers, estimates that production in the oil sands will increase from 1.8 million bpd in 2012 to 5.2 million bpd by 2030, which would constitute over three-quarters of Canada’s total oil production.

The largest market opportunities that will emerge from this increase in production will be in North America according to the report, by providing an alternative to foreign imports.

One of the major challenges for the country’s petroleum industry, says the report, is transportation of the crude oil to where it’s needed in other parts of North America, as well as to the country’s coasts where it can be exported to overseas markets.

Rail transport is quickly becoming a more common way to meet these transportation needs. The report notes that 12,989 rail cars transported oil in February 2013, a 60 percent increase from February 2012.

The increasing reliance on rail has been a reaction to new political obstacles hampering transportation infrastructure development. As cultural attitudes toward pipelines in Canada have deteriorated, two major political parties in Canada, the NDP and the Liberal Party, to different degrees, have come out against planned pipeline projects.

With Canada’s oil pipelines reaching capacity and this new resistance to their expansion, the more expensive rail transport method is being seen as the next-best option.

Economic impact

The rise in oil production is expected to have major consequences for Canada’s future fiscal health. While most of the developed world is expected to face economic difficulties over the next several decades, due to increased government expenditures on social welfare programs for their ageing populations, revenue from the new oil production is projected to compensate for this economic burden in Canada.

The Western provinces of Canada, where most of the new oil production as well as other natural resource extraction growth is taking place, are already becoming the bright spots of the Canadian economy, with lower unemployment rates and faster economic growth than the rest of the country.

Alberta, at the epicenter of the resource boom, currently has the highest per capita GDP in the country. Neighboring Saskatchewan, another resource-rich province, meanwhile has the lowest unemployment rate in the country, and the second higher per capita GDP.

The disparity in job opportunities between Western and Eastern Canada has led to the migration of tens of thousands of Canadians to the western prairie provinces, as well as thousands of immigrants, who are willing to brave the cold of the prairies for better job prospects.

Citizenship Application Process to Get Easier With Test Re-Takes

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New Canadian citizens at the Oath of Citizenship ceremony. New rules will allow citizenship applicants who fail their citizenship knowledge test to re-take the test a few weeks later

Following recent changes to the citizenship application process that increased the difficulty of acquiring Canadian citizenship, including the introduction of proof of minimum language proficiency and an increase in the difficulty of the citizenship knowledge test, the federal government is reversing course to make it easier for permanent residents to meet citizenship eligibility requirements.

According to an announcement made on Monday, Citizenship and Immigration Canada (CIC) has begun providing permanent residents who take their citizenship test their results immediately, and if they fail, allowing them to book another test a few weeks later.

The previous rules required a citizenship applicant who failed the citizenship knowledge test to wait months to have an interview with a citizenship judge who would then decide if they would be granted citizenship.

The new rules will also apply to applicants who are currently waiting to see a citizenship judge due to having failed their knowledge test, allowing them to take their test in weeks and obtain citizenship.

Furthermore, CIC announced that family members are now able to obtain their citizenship individually without all members of their family getting approval of their citizenship application.

The previous rules required all members of a family to obtain their citizenship together, which prevented some individuals who otherwise qualified for citizenship to have to wait because the citizenship application of one member of their family was not approved.

The two new measures are expected to speed up the citizenship acquisition process.

Approximately 200,000 people become Canadian citizens each year, which is about two-thirds of the number who receive permanent residency.

The percentage of citizenship test takers who failed their exam nearly quadrupled from 2009 to 2011 due to a March 2010 change that raised the passing grade of the test and increased the number of topics it covered.

More Countries Listed As ‘Safe’ Designated Countries of Origin

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The addition of Chile to the Canadian government’s list of designated countries of origin was announced during a meeting between Prime Minister Stephen Harper and Chilean president Sebastian Pinera (Government of Canada)

As part of the effort to combat bogus asylum claims, Citizenship and Immigration Canada (CIC) announced on Thursday that two more countries have been designated as ‘safe’ countries from which asylum claims will be given an expedited treatment.

CIC created the list of designated countries of origin (DCOs) in December 2012 to stem the tide of welfare seekers from European countries, primarily Hungarian Roma, that were taking advantage of Canada’s generous asylum claims process to live on the country’s social services for years until finally being deported.

In its report on the phenomenon, the Canada Border Services Agency (CBSA) found that claimants would delay their deportation through a lengthy process of appeals, before finally abandoning their claim or having it rejected for lack of evidence.

The list originally contained 27 countries, that included most EU member states. Eight more countries were added in February, and with the addition of Chile and South Korea on Thursday, the total number of countries has come to 37.

Countries are considered DCOs if they are democracies with strong legal protections of human rights, and if at least 60 percent of asylum claimants from the country had withdrawn/abandoned their claim, or at least 75 percent of claims by claimants from the country were either withdrawn or abandoned by the claimant or rejected by the Immigration and Refugee Board (IRB).

Chile’s induction into the DCO list coincided with Prime Minister Stephen Harper’s meeting with Chilean president Sebastian Pinera, and the signing of a Canada-Chile trade agreement.

Think Tank Promotes Immigration As Development Aid

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Young women in Ghana. Seventy percent of respondents in a CIGI survey of Canadian immigrants from countries in Southern Africa said they remit money to relatives in their country of origin

The Centre for International Governance Innovation (CIGI), a think tank established by the founder of Canadian firm Research in Motion, Jim Balsillie, released a study this week that finds immigration source countries benefit from the migration of their skilled workers to the developed world due to the foreign remittance, investment and philanthropy that their emigrants give back.

The study proposes redefining immigrant communities as “diasporas”, to emphasize the links immigrants maintain with their countries of origin, and help dispel the belief that the emigration of skilled workers from a country is a “brain drain” or “poaching”, and instead frame migration as a development tool that helps immigrants, developed countries, and developing countries.

The researchers’ primary area of focus in the study was Canadian immigrants from Southern African Development Community (SADC) countries, and they found that 70 percent of survey respondents from these countries, with the exception of those from South Africa, reported remitting money back to their home country.

Over half of survey respondents had given serious consideration to moving back to their home country, despite rating Canada favourably, demonstrating the strong links they have to their countries of origin.

The study noted that global remittance, at US$440 billion in 2010, is three times more substantial than official development aid as a source of income for countries “and almost as large as foreign direct investment”.

The diaspora communities that had the highest rates of individuals providing foreign remittance were those from the Philippines (60 percent), Haiti (60 percent), Jamaica (50 percent), and Nigeria (47 percent). The communities with the lowest percentage providing foreign remittance were those from South Korea (5 percent), the United Kingdom (7 percent), France (9 percent), Iran (11 percent) and Iraq (15 percent).

Diasporas and foreign direct investment

Besides remittance, the study says diasporas benefit the developing world as sources of investment, with a recent OECD study finding a one percent increase in the size of a diaspora population leads to a 0.1-0.25 percent increase in foreign direct investment in the country they originate from.

The researchers also found that nearly half of survey respondents in Canada’s SADC diaspora had engaged in economic activity in their country of origin since migrating to Canada, including 25 percent who had exported Canadian goods to the country and 11 percent who had invested in a business there.

Combined with studies estimating that 70 percent of China’s and 26 percent of India’s foreign direct investment during particular time frames originated from their respective diasporas, the researchers conclude that immigration could potentially have a major impact on foreign investment into the developing world.

Seeing immigration in light of the economic benefit it provides to its source countries can dramatically change the debate on the immigration of skilled workers into Canada say the study authors, by leading to immigration being linked with Canada’s official development policy, while shedding it of negative image in the developed world as a zero sum “brain drain”. (This story was first broken by Postmedia News)