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Diane Francis: Trudeau’s immigration scheme is just another way to redistribute Canada’s wealth

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Diane Francis: Trudeau’s immigration scheme is just another way to redistribute Canada’s wealth

Plopping lots of people into an economy may increase GDP, but not if they’re grandparents, unskilled, can’t find work or are underemployed Diane Francis 126 Comments

A pedestrian walks by a painted Canadian flag in Toronto.
Canada has a target of one million new permanent residents by 2022. Photo by Peter J. Thompson/National Post files

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It’s hard to imagine a bigger bungle by the Trudeau government than the vaccine fiasco and budget carnage, but now there’s immigration. Aims are to allow 1.2 million more permanent residents into Canada in the next three years when other, well-managed countries like Australia and New Zealand, are preoccupied with retaining the living standards of their existing populaces by trimming immigration.

“History teaches us that when we grow our immigration levels, we grow our economy,” Canadian immigration minister Marco Mendicino said earlier this year, a lawyer without economic credentials..

In March 2020, he announced a target of one million new permanent residents by 2022. Then in October, he bumped this up to 1.2 million from 2021 to 2023. This is more than triple the U.S. per capita immigration rate which has nearly nine times Canada’s population. (That doesn’t include the flow of illegal immigration into the U.S.)

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The ravages of the pandemic have resulted in prudence elsewhere. The U.S. reduced its visa approvals a year ago, Australia lowered its immigration target to 160,000 (with 28 million people compared to Canada’s 37.7 million), and New Zealand said its priority was to train people already in the country for available jobs.

By contrast, Mendicino announced that of the 400,000 allowed in per year, the breakdown would be 232,000 immigrants in the economic class, or employable people; 103,500 in the family class (mostly parents and grandparents); and 65,000 refugees and protected persons.

Such levels are unjustifiable by many measures. Canada’s unemployment rate is high, at 8.1 per cent, compared to 6.1 per cent in the U.S, and 5.6 per cent in Australia. Canada’s economic recovery is more fragile and will take longer, according to forecasts by the International Monetary Fund. The U.S. is vaccinating its way back quickly to an estimated 6.4 per cent growth in 2021 and Canada is forecast for 5 per cent growth this year, but that’s impossible given the lockdowns and border closings due to Ottawa’s ongoing vaccine procurement failure.

Besides, the very notion trotted out by the immigration minister that the economy grows because of immigration is fallacious. Plopping lots of people into an economy may increase the GDP but not if they are grandparents, unskilled, cannot find work, or are underemployed.

To analyze the benefits of immigration, it’s important to look at the GDP per capita figures. This metric makes it obvious that Canadian immigration has served mostly to cut the pie into smaller pieces for everybody: Canada’s GDP ranks ninth in size, but its GDP per capita is only 18th, less than the U.S. GDP per capita at fifth place, or Australia’s at 9th place.

Other reasons this aggressiveness is inappropriate is because the U.S. recovery may not flow northward as border closures continue, or the likelihood that new entrants will be unable to find jobs or, if they do, will displace workers already here.

Other negatives include the reality that 1.2 million newcomers will overcrowd Canada’s cities and increase the cost of services, and the cost of housing which is already unaffordable to Canada’s middle class. And why would Ottawa allow more elderly persons into a country that is aging rapidly and increasingly struggling with health-care costs for older persons?

Trudeau’s immigration scheme is unlikely to yield anywhere near the numbers sought.

The fact that the GDP per capita is lower than Canada’s peers demonstrates that this is not about wealth creation. It does nothing to address Canada’s soaring debt ratio or to create jobs for Canadians. This immigration reach is about vote-getting in immigrant enclaves, and simply another accelerated policy to redistribute Canada’s wealth.

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