Monday, May 30, 2011

Opinion: The big picture shows immigrants are a good bet

Calgary is the largest metropolis in the Calga...Image via WikipediaBy Stephen Hume, Vancouver Sun

I’m an immigrant.
Let’s get that out of the way first in this reaction to the Fraser Institute’s disingenuous study asserting that immigration costs Canada as much as $23.6 billion a year.
Researchers Herb Grubel and Patrick Grady — both of whom are also immigrants and presumably don’t consider themselves a burden on the economy — conclude that in 2006, immigrants received on average $6,051 more in benefits than they paid in taxes.
On the basis of this snapshot, they advocate restrictions upon immigration. However, the narrowness of the data set suggests the broad conclusions don’t have sound foundations.
Indeed, the arguments sound suspiciously like those of the old Reform Party, which gave gloomy voice to utilitarian assumptions about acceptable skill sets and wealth required of prospective immigrants.
Of course, anxiety about the potential financial burden of newcomers is well established, if misplaced, in framing immigration policy for Canada.
Similar concerns were expressed about Irish immigrants in the mid-19th century. Central Europeans, Russian Jews, Scandinavians — even the English — have all been subjected to worries that they got more from their new country than they contributed.
So, here we are in 2011 faced with two successful immigrants, both indisputably valued and productive members of Canadian society — let’s leave aside the amusing irony of the Fraser Institute issuing tax-deductible receipts to wealthy contributors so they can pay less tax — fretting that new immigrants don’t pay enough tax to cover their cost to Canadian society.
This sounds like the venerable “I’m in the lifeboat, pull up the ladder” argument.
I say venerable because the notion that the most recent arrivals are paying insufficient tax and drawing excessive benefits remains one of the persistent memes in Canadian society.
And it is almost always based on selective statistical evidence while ignoring the unassailable fact that of the 34 million people in Canada, 33 million are either immigrants or the descendants of immigrants who helped to build a national economy which ranks in the top eight globally.
I’m not alone in my doubtful reaction to the Fraser Institute’s study.
Robert Vineberg, a senior fellow at the Calgary-based Canada West Foundation, notes that the average income of immigrants in Canada more than 15 years before the 2006 census was actually higher than for native-born Canadians.
On average, those immigrants paid more in taxes than they got in benefits, Vineberg observes.
“This turns the Fraser Institute’s analysis on its head and suggests that immigrants are net contributors to government revenues if their entire working life is considered,” he says. The data used can lead to diametrically opposed conclusions, he notes, and suggests “the whole principle of such analysis is faulty.”
Vineberg argues that immigrant contributions are much broader than their tax contribution. For example, an immigrant nanny earning less than average income often enables both native-born parents to earn higher salaries and therefore to pay higher taxes.
So it all depends where you take your snapshot.
When my father brought me to Canada as an infant 63 years ago, the only job he could find was on a garbage scow, although he was a qualified machinist. He worked filling paint cans and delivering bread at considerably less than the average income. He had five kids in school. That snapshot would show him – and me – as a social cost rather than a benefit.
Later he became an award-winning journalist, still writing at 87. And those five kids – two are newspaper columnists, one works for the navy, another provides research and management consulting to big health care organizations, one is a successful artist. By that snapshot, he’s a benefit rather than a social cost.
Vineberg concludes: “By zooming in on one small part of a complex phenomenon, the Fraser Institute ... has come to conclusions that may appear correct but, if the assumptions involved are examined closely, are unfounded. This does not make a constructive contribution to the needed debate.”