More immigrants than jobs

by Martin Collacott, National Post

In recent years, newcomers to Canada have brought with them a greater level of education, on average, than previous immigrant cohorts. Yet according to Statistics Canada figures released on Jan. 30, their economic performance remains far below that of the Canadian-born population. Why are today's highly qualified immigrants doing so poorly? The answer is obvious: We simply don't need the services ofmany of the skilled people coming to Canada. The jobs they hoped to find here do not exist. According to the latest data presented by Statistics Canada, during their first year here, newcomers are, on average, 3.5 times more likely than native-born Canadians to fall into the low-income category. While their situation improves somewhat after the first year in Canada, a disproportionate share (2.5 times the share for those born in Canada) remain in a "chronic" state of low income. Canadians may find this hard to understand given all we hear about the shortage of skilled labour in Canada. Yet immigration is an effective means of dealing with labour shortages only in rare cases.

Alan Green, emeritus professor of economics at Queen's University and one of Canada's most distinguished specialists on the economics of immigration, has pointed out that while Canada did not have the educational infrastructure in place to meet all of our skilled-labour needs back in the 1960s, when we launched programs to attract skilled immigrants to Canada, these educational facilities now exist. We should, therefore, be able to meet our skills needs from within Canada's existing population. This does not mean that we don't experience shortages of skilled workers from time to time in some areas, particularly where there is rapid economic expansion - as in the case of the Alberta oil sands. In these cases, however, normal market forces will kick in as wages rise and more Canadians are encouraged to acquire the training necessary to enter the field in question. What is unfortunate about the current situation is that tens of thousands of well-educated and experienced newcomers are being enticed to come to Canada in the expectation that they can improve their lot, when in fact many of them have little chance of finding employment in their fields of specialization. Nor are existing Canadians benefiting from this situation.

Cities such as Toronto and Vancouver are being burdened with increasing levels of congestion and pressure on their health and educational infrastructure. While governments and immigration advocates continue to tell us about the economic benefits we get from the high influx of newcomers, some recent analyses tell a different story. In a September, 2005 study, for example, former economics professor Herbert Grubel calculated that, given the poor economic performance of immigrants in recent decades, the cost to Canadian taxpayers amounted to tens of billions of dollars per year. Our high immigration levels may have a negative economic impact in other ways as well. Canada's failure to keep pace with countries such as the United States in productivity growth could be linked to the ease with which immigration has made it possible for Canadian employers to substitute cheap labour for investments in capital and new technology.