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New report says immigrants fiscally burden Canada

/ 08:48 AM October 26, 2013

Academic Herbert Grubel. CONTRIBUTED PHOTO

TORONTO, Canada – A recently released report by the Fraser Institute implied that immigrants are costing Canadian taxpayers Canadian $20 billion a year.

It also calls for an end to sponsorships of parents and grandparents of immigrants and that Canadian immigration selection require employment by the private sector rather than the government.

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At the center of the controversial report is Economics Professor Emeritus at Simon Fraser University Herbert Grubel, who wrote Canada’s Immigration Selection Policies in which he noted that immigrants who arrived since 1986 earned less and paid less taxes than the benefits they received from the government.

Unlike the US, Canada’s points system of selecting principal immigrants has remained largely unchanged since the 1960s. Candidates’ work experience, education, language competency and other factors give them higher points and more likely acceptance for immigration to Canada.

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In 2011 about 30 percent of Canada’s immigrants were selected this way. But with spouses and under-age children coming with them, their number rose to about 63 percent.

Grubel recommended stopping the “fiscal drain” by abandoning the points system, replacing it with pre-arranged work contracts as the main criterion to immigrate to Canada.

Early this month, Grubel was quoted by The Philippine Reporter: “Instead of relying on university certificates assessed by civil servants who are in turn instructed by politicians, I would like to see accepted as landed (the Canadian term for citizenship status) immigrants only people who have a job offer from a Canadian employer.”

But the Victoria Filipino-Canadian Association reacted, calling the study exaggerated and partial. They further expressed alarm at the impact the study would bring to Canada’s future immigration policies. The group plans to dispute the study’s conclusion.

The Reporter also quoted Pia Enriquez, director for leadership development of the Ministry of Social Development and Social Innovation, as saying, “I would really like to challenge this. I’m really sorry that (Grubel) was just looking at one part of society.  He’s targeting the immigrants and I think immigrants bring so much with them.”

In August immigration lawyer Zool Suleman told the Canadian Broadcasting Corporation News (CBC News), “Parents and grandparents do a lot of undocumented, necessary work inside and outside of the home, allowing Canadians to actually be out in the labor force. Let alone intangible, important things around values and family structures and trying to enshrine a variety of things important to Canada.”

Suleman also warned that changes to the immigration selection process could result in the loss of highly skilled immigrants to Canada.

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But Citizenship and Immigration Minister Jason Kenney in May had already announced new criteria for sponsoring parents and grandparents for immigration.

Grubel said that the changes were “in the right direction,” but he was still doubtful that the new criteria were enough to stop the unbalanced tax payment vs. government benefits from immigrants.

In the US, Harvard Economics Professor George Borjas parallels Grubel’s work. Borjas once reported that immigrants in the US raised the annual national income to US$1.6 trillion annually. But US$1.565 trillion go to immigrant wages and benefits, with only US$35 billion going to the native population. Consequently, Borjas advocates for the reduction of immigrants to the US.

Grubel, writing in National Post, compared the cost of immigration between the US and Canada.

“Immigrants make up 18.8 percent of the population in Canada and 12.8 percent in the US. Assuming the economies of the two countries are very similar in most other respects, applying Borjas’ findings to Canada implies that labor loses CA$40 billion a year and employers gain CA$43.5 billion, including the migration effect of $3.5 billion.”

Nevertheless, the average incomes of immigrants in Canada are below the average incomes of the native population. But in Canada, immigrants are entitled to free education, health care, other welfare benefits and benefits that may result from research and cultural projects.

Parents and grandparents lower average incomes of all immigrants. They are elderly, can’t speak English or French (a necessity in Quebec) and may no longer have marketable skills. Also, at their age, their medical services would be at their highest costs.

Grubel’s proposed solution is to have immigrants attain landed status first before getting their parents and grandparents to live with them. The new landed Canadians must then first post bond to pay for their parents’ and grandparents’ health care and other budgets.

In May the Federal Immigration Minister’s list of occupation in demand for Canada was mostly for different engineers. Doctors and nurses were not on the list, except for Quebec, which listed a need for about 20,000 nurses.

Canada’s immigration policy frequently changes. Much like the US, the flux makes for some uneven and spotty development.

Canada’s Supervisa, for example, allows parents and grandparents to visit family members for up to two years at a time, but does not allow landed status, employment and health benefits. In fact, a year’s worth of private medical insurance coverage is also required. Moreover, the temporary visitor’s child or grandchild in Canada must meet a minimum income based on the number of dependents.

In September Mexico’s Ambassador Francisco Suarez railed against Canada’s Harper administration. Quoted from Taliba, “We’re now really mad. Canada has the most stringent visa system for Mexicans by any country in the world.”

Suarez told Taliba that it is easier to get a visa to the US where there are more illegal border crossings from Mexico. “The Canadians require 10 times more information than the Americans.”

“I had to put the date when my mother and father died, 15 and 20 years ago. What’s the use of putting in that date?”

Prime Minister Stephen Harper said that he wanted to remove the policy, in place since 2009. But Harper decided to first relieve the large immigration backlog. The issue is even touchier with the planned visit to Canada of Mexican President Enrique Pena Nieto.

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TAGS: Benefits, Canada, Canadian system, Herbert Grubel, Immigrants, Immigration, policies, Simon Fraser University, spending, Welfare
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