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Steve Lafleur: Only more immigrants can save Canada’s economy

National Post, National Post
Monday, Aug. 1, 2011
In his immigration policy remarks on July 19, Minister Jason Kenney acknowledged that Canada would need roughly one million immigrants per year in order to maintain the ratio of working age citizens to retirees. Citing a lack of resources for integrating new Canadians, and a concern that accelerating immigration levels too rapidly could lead to a nativist backlash, he said that it won’t happen.
While the Minister’s expressed concerns are valid, they pale in comparison to the demographic reality. The proportion of Canadians aged 60 and over is projected to increase from roughly one-fifth to nearly one-third by 2020. Our national debt stands at over $582-billion, and is increasing at a rate of more than $1,400 per second. This burden doesn’t include provincial government debts, or unfunded pension liabilities such as the $748-billion shortfall for the CPP. For those Canadians hoping to start collecting CPP in the next decade, the question shouldn’t be if we can integrate one-million immigrants per year, but how.
While taking in four times more immigrants than we do now would present some logistical challenges, they are not insurmountable. One criticism against more immigrants is that more immigrants will put greater stress on the housing market. This assumes that the housing stock is fixed, and that all immigrants will go to the hottest real estate markets. Canada’s three biggest cities have admittedly been hostile to new development, which is pricing many out of the market. A healthier attitude toward development will be crucial if those cities are to remain affordable.
However, the immigration question presents a great opportunity not just for smaller metropolitan areas, but for rural areas as well. Rural areas in Canada are often resource rich, but population poor. It is most evident in Saskatchewan, where there are typically 10,000 vacancies in any skilled trade in the province. There are plenty of resources, but not many people. Saskatchewan is twice the size of Germany, with 1/80th the population. There is no shortage of room or resources.
Smaller centres also offer the advantage of lower cost housing, and would require less expensive infrastructure upgrades. Manitoba is leading the country in terms of targeted immigration to smaller centres. Rural Manitoba received nearly 3,200 immigrants in 2008 alone, and the province is clamouring for more. For too long, our immigration policy has been fixated on Toronto, Montreal and Vancouver. High levels of rural immigration can revitalize communities, and Manitoba has shown the way.
The immediate costs of immigration have to be acknowledged. Language training, security screening and so forth cost money. Some argue that the costs outweigh the benefits. It is reasonable to require newcomers to our country to shoulder the full cost of their resettlement here, and Canada should consider changing its immigration system to ensure that absorbing a new immigrant does not impose a financial cost on the country as a whole.
Further, rather than relying on the federal immigration system, the federal government should give in to provincial demands for an increase in the number of immigrants admitted through provincial immigrant nominee programs. The programs attract immigrants who come to Canada to fill labour market vacancies, as well as immigrant entrepreneurs.
The federal government has announced that it will increase the quota from 36,000 to 40,000. But this increase is nowhere near enough. The nominee program helps places in lesser demand attract workers and revitalize small urban and rural communities. It also ensures that participants have employment before they arrive in the country. Smaller communities are typically better at welcoming and integrating newcomers, too. If the federal government is concerned about the costs of immigration, and they should be, they could even reduce regular immigration rates and aggressively expand provincial nominee programs.
Regardless of how they go about it, the federal government needs to ensure that we have enough workers to fuel the country’s economic growth where it needs fuelling, and to fund the Baby Boom generation’s retirement obligations. Having made these commitments to retirees, the government must find a way to meet them.
More retirees and fewer workers will make funding unfunded pension liabilities and repaying our national and provincial debts a staggering burden on young workers. Short of forcing people out of retirement, or returning to steady pre-Second World War fertility levels, more immigration is our only option for addressing our demographic decline. The only other option will be steep cuts to social entitlement programs, an option no politician is likely to propose.
National Post
Steve Lafleur is policy analyst with the [external] Frontier Centre for Public Policy.

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