Canadian Economist Calls for Employment-Based Immigration Selection Process

A new report by SFU Professor of Economics (Emeritus) and Fraser Institute senior fellow Herbert Grubel calls for a total overhaul of Canada’s immigration selection process (Simon Fraser University)

A new report by Canadian economist and former Member of Parliament Herbert Grubel calls for Canada’s point-based immigration selection process to be completely replaced with one based on employment.

Grubel, who is a Fraser Institute senior fellow and a professor emeritus of economics with Simon Fraser University has been a longtime proponent of placing more limits on immigration, a position which he views as an extension of his fiscal conservatism.

The report contends that immigration costs Canadians $20 billion annually, as a result of immigrants paying less in taxes while using up just as much in government services as the native-born population.

While welcoming some of the recent changes made to the immigration selection process by former Immigration Minister Jason Kenney, Grubel argues that they do not go far enough, and proposes two major changes to Canadian immigration to make it more economically beneficial to native-born Canadians:

  • Elimination of parent and grandparent (PGP) sponsorship for new immigrants. The report notes that following the initial 10-year period when sponsors are financially responsibility for the costs of the social benefits received by their sponsored PGP, the percentage within this cohort that receives social assistance immediately increased from 3 percent to 20 percent.

    While welcoming the new 20-year sponsorship period that is to come into effect for the PGP sponsorship program, Grubel says that the enforcement of the sponsor’s responsibilities will be difficult, and it would be simpler to simply eliminate PGP sponsorship as a permanent residency program.

    Grubel proposes a transition period whereby all immigrants who became permanent residents before his proposed rule change maintain their right to sponsor their PGPs for permanent residency, while immigrants who arrive after lose this privilege. In this way, Grubel argues the elimination of the program can be done fairly, by allowing those who immigrated to Canada under the assumption that they would be able to sponsor their PGPs to retain this ability.

  • Replace point-based assessment method of selection with employment-based selection. Grubel suggests only skilled workers with pre-arranged employment should be admitted under the skilled worker program. He argues that employer decisions on who to hire provide better information on who has the skills to succeed in Canada than a bureaucratic process created by civil servants.

    He proposes however to keep the federal government involved in setting minimum standards and wages, to prevent employers from using immigration to secure low wage labourers that cost taxpayers more in the provision of social services than they pay in taxes.

    An employment-driven skilled worker program, the report suggests, would adjust the number of immigrants admitted according to economic conditions, where immigration would decline when jobs are scarce, and increase when jobs are plentiful. The number admitted per year would therefore match the needs of the Canadian economy better than a number selected through the political process.

Critique of report by the Broadbent Institute

The report’s proposal to dramatically overhaul the Canadian immigration selection process has, predictably, found critics. A recent article from Broadbent Institute fellow Patti Tamara Lenard challenges several of its claims.

Lenard argues that the report’s conclusion that immigrants impose a fiscal burden on other Canadians, which it draws from statistics showing recent immigrants have a lower average income and pay less in taxes than the average native-born Canadian, neglects the fact that immigrants are younger than the average Canadian when they arrive in Canada, and therefore is faulty.

The report’s analysis of immigrant income does not include only immigrants who just arrived in Canada however. The immigrant cohort used by Grubel’s comparison is individuals who arrived in Canada between 1986 and 2004, and the length of time they were in Canada ranged from 1 to 18 years.

While Lenard’s suggestion that the analysis compares younger immigrants to older native-born Canadians is not supported by the composition of the dataset used by the report, it is true that Grubel does not make an effort to control for age in his analysis, and therefore it could be an unaccounted factor in the income gap.

Lenard also disputes the report’s assumption that immigrants are as likely to use social programs as the rest of the Canadian population, citing a Swedish study that finds that Canadian immigrants use fewer social services than the general population. The report’s estimation on the cost of the social services used by Canadian immigrants is therefore too high she argues.

Lenard’s article in places makes some hasty and inaccurate criticisms of Grubel’s report. She claims for instance that the report states that “in 2011 over 50,000 [Parent and Grandparent] immigrants entered Canada”, but that the actual number was 14,000.

In actuality, the report cites Citizenship and Immigration Canada’s (CIC) own data projecting that over 50,000 PGPs will become permanent residents over 2012 AND 2013, a two year period, not in a single year, 2011.

Lenard also claims that the report “implies .. we should expect [PGP’s] health care costs to mimic those of Canadians aged over 65”, and that this is misleading, due to the fact that PGPs’ health care costs are covered by their sponsors for the first 10 years after their arrival. The content of the report does not support Lenard’s claim, as it clearly conveys the same point Lenard claims it neglected, and instead focuses on indications of high social assistance costs for PGPs once they turn 75 and are no longer the financial responsibility of their sponsors.

Gaps in data

While the Broadbent Institute’s review of Grubel’s report falls short in providing an informed critique of the report’s proposals and arguments, it does touch on the gaps in the data on the economic impact of Canadian immigration, and the heavy reliance on conjecture – which is more subject to the influence of ideology – in discussions on the optimal immigration selection process for Canada.

As a result of the many unknowns surrounding immigration and its impact, it will likely remain a contentious issue in Canada for years to come, until more data on the economic outcomes of Canadian immigrants is generated, and Canadians have a clearer picture of what programs work and which ones don’t.

Lax Deportation Enforcement Blamed for Death of Young Woman

The family of Jenna Cartwright says they feel “betrayed” by the federal government’s failure to detain Gaashaan after he was ordered deported

The family of a young Albertan woman who police believe was murdered by a convicted drug dealer from Somalia calls the federal government’s failure to deport the suspected perpetrator, “sickening”.

Arriving in Canada in 1993 as a refugee, and acquiring permanent residency in 1997, suspected murderer Bashir Gaashaan soon fell into a life of crime, and in 2009, due to two convictions that constituted “serious criminality”, faced a hearing at the Immigration and Refugee Board (IRB), where the Canada Border Services Agency (CBSA) asked that he be deported, and detained until his day of deportation, due to being a flight risk and a danger to the public.

The board ordered the deportation but, according to documents gathered by the Calgary Sun, argued that it would unfair to hold Gaashaan until he was deported, as the deportation process could be lengthy:

Because Gaashaan arrived from Somalia as a refugee in 1993, the CBSA couldn’t deport him without a “danger opinion”.

That’s an order issued by the Minister of Immigration, stating the danger to Canada outweighs the risk to an individual being sent back to a potentially unsafe country.

Being federal paperwork with legal status, danger opinions are very slow in being completed — and time waiting in jail would have been unfair to poor Gaashaan.

“So if he’s detained, detention is likely to be lengthy. I know that it’s difficult to remove to Somalia at the best of times. Taking all of that into account, I think that the appropriate thing is to release him on terms and conditions,” states the ruling.

Less than two years later, on June 16, 2011, police charged Gaashaan with first-degree murder, unlawful confinement, offering an indignity to human remains, and sexual assault, in the death of Jenna Cartwright, 21, of Red Deer, Alberta, as well trafficking in cocaine.

Jenna Cartwright’s twin sister, Marissa Cartwright, said she is furious about the handling of Gaashaan’s deportation. “I’m so angry, even more angry than before — the whole thing is sickening,” she told the media.

She added that she felt “betrayed” by the government:

“I cannot believe this has happened, I honestly feel betrayed by our government — we should be able to rely on our government and know they are keeping us safe.”

The failure of the refugee board to place Gaashaan in detention after he was ordered deported is being seen by many as an example of the immigration and refugee system being more concerned with political correctness than national interests.

The public response could lead to pressure on the federal government to speed up the deportation process, which has already been reformed in the past year to address a wave of bogus asylum claims from Hungary.

It could also lead to individuals who have been ordered deported more often being held in detention until their deportation, and new monitoring technologies like electronic bracelets being deployed on a large scale in asylum and deportation cases.

Immigration Boosting Canadian Housing Sector -Analysis

A house in Greater Vancouver, Canada. A report by the National Bank of Canada says the effects of immigration on demographics will keep housing prices in Canada from falling (Tony Fox, GFLD)

A new economic analysis credits immigration for keeping Canada’s housing sector growing amid a slowdown in the developed economies.

As reported by the Globe and Mail, a National Bank of Canada (NBC) report on the Canadian housing market finds that the so-called ‘household forming cohort’, which is the segment of the population aged 20-44, is growing much faster in Canada than in most developed countries.

Without the influx of 147,000 new Canadians aged 20-44 through immigration, the demographic would have seen a decline in 2012, according to NBC senior economist and report author, Matthieu Arseneau. The average growth rate of the 20-44 demographic was negative 0.3 percent last year among the rest of the developed economies, compared to the positive 1.1 percent growth rate seen in Canada.

Arseneau cites a high rate of employment among foreign born Canadian citizens, which is lower than only New Zealand and Norway’s, as a pull attracting foreigners to immigrate to Canada.

The report projects the growth in Canada’s 20-44 cohort will decrease after 2013, but will remain positive, and will exceed that of other developed countries. This demographic trend, Arseneau argues, will provide the country’s housing market with a comparative advantage over those in other developed countries, and reduce the likelihood of a crash in Canadian housing prices as predicted by some market watchers.

Immigration Department Closing Citizenship Applications to Reduce Backlog

New Canadians taking the Oath of Citizenship. Citizenship application processing times have increased from 12 – 15 months in 2008 to 23 months today

Citizenship and Immigration Canada (CIC) is closing citizenship applications of unresponsive applicants in an effort to reduce its backlog and speed up application processing.

A new article by Postmedia News lists some factors that could be used to determine which applications are dormant:

Citizenship and Immigration will shut the files of those who fail to attend multiple scheduled citizenship tests or interviews. Applications submitted on or after April 17, 2009 will also be considered dormant and closed if applicants fail to provide proof of residency after receiving two notices to do so from the government.

CIC spokeswoman Andrea Khanjin told Postmedia News that 54,000 citizenship applicants did not show up for their citizenship test in just the last three years and that CIC estimates about 12,000 files will be closed soon under the new procedures.

Khanjin said that citizenship application processing will favour those who make an effort to comply with the process requirements over those who do not:

“Those who take their citizenship seriously will not have to wait in line behind those that don’t bother showing up to their citizenship test, interview, or who don’t respond to a residence questionnaire. The citizenship application process has been bogged down for too long by those that do not take Canadian citizenship seriously.”

Citizenship application processing times have increased in recent years, from 12 to 15 months in 2008 to 23 months in April of this year, leading to more funding being allotted by the federal government for citizenship application processing and, now, an effort to cut down the backlog of 350,000 applications by closing dormant files.

Canada comes in top 5 among G20 in Entrepreneurship Ranking

Lack of regulatory barriers, availability of venture capital funding and a culture that embraces entrepreneurship placed Canada in the top quartile in the EY G20 Entrepreneurship Barometer 2013 (U.S. Department of State)

A new report by Ernst & Young places Canada’s entrepreneurial ecosystem in the top five among the G20 countries.

The G20 Entrepreneurship Barometer 2013 ranks a country’s entrepreneurial environment according to its score in five sub-categories: access to funding, entrepreneurship culture, tax and regulation, education and training, and coordinated support between government, academic institutions and the private sector.

The formulation of the ratings relies on business environment indicators, like number of new businesses started per year, data collected in a survey of more than 1,500 entrepreneurs across the G20 countries, the insights gained in interviews with entrepreneurs, academics and experts, and a qualitative analysis of government initiatives to encourage and assist entrepreneurship.

Canada came fourth in the access to funding category, thanks largely to per capita venture capital funding that is second only to the U.S. It ranked third in entrepreneurship culture, behind the U.S. and South Korea, as interviewees had a generally positive opinion of the country’s attitude toward entrepreneurship and its acceptance of failure (more accepting than other countries).

In the tax and regulation category, which scores countries by the ease of complying with regulations when starting and running a business, and the number of special tax incentives for entrepreneurs, the country came second, after Saudi Arabia, for its simple business registration process, lack of labour laws allowing for a flexible labour market, and an abundance of tax subsidies for small and medium sized enterprises.

While the G20 Entrepreneurship Barometer is one of many possible ways of determining the quality of an entrepreneurial ecosystem, and has not been shown to predict for entrepreneurial success, Canada’s strong showing will at the very least help boost its image globally as a centre of innovation and a country that’s open for business.