Canadians Oppose Trudeau's Proposed Immigration Increases

Weak support in a country with close to 9 percent unemployment

By Andrew R. Arthur on November 12, 2020

Canadian Immigration Minister Marco Mendicino recently announced that our neighbor to the north would be seeking to boost its annual immigration goal by 50,000, to 401,000 in 2021, a number that would subsequently increase by 10,000 per year in 2022 and 2023. As the unemployment rate there was 8.9 percent in October (just down from 9 percent in September), and given other factors in the Canadian economy, it is not surprising that the plan is not polling well.

Specifically, according to a Nanos Research Group poll conducted for Bloomberg News, just 17 percent of Canadians support that proposed increase. By comparison, 36.3 percent of those polled support decreased immigration and 40.1 percent want the immigration rate to remain where it is.

Canada, like the rest of the world, has been affected by shutdowns in response to the Wuhan coronavirus pandemic, reaching an unemployment rate of 13.7 percent (an all-time high) in May. That was just above the U.S. unemployment rate that month of 13.3 percent (it had reached a 72-year high of 14.7 percent in April), but the Canadian economy has been slower to recover, as well.

Specifically, as noted, the Canadian unemployment rate was 8.9 percent last month, compared to 6.9 percent in the United States in October. That said, the U.S. unemployment rate pre-pandemic (in February) was below 4 percent, while the Canadian rate that month was 5.6 percent (up from 5.5 percent the month before).

In other words, Canada was doing well — just not as well — on the economic front as the United States has been under the current administration (unemployment was at or near 4 percent here from at least October 2018 until March).

That almost as many Canadians want less immigration as want the immigration level to remain the same — and that the two groups swamp those who want more — is significant for two reasons.

First, Canada, like the United States, has long been a major destination for new immigrants. In fact, according to the latest UN World Migration Report, 21.3 percent of Canadians in 2019 were foreign-born.

Given this, it is not surprising that the country has seen a significant increase in its population in the last decade: 11 percent, compared to around 7 percent in this country.

That growth has not come from increased birth rates north of the border. Rather, the total fertility rate in Canada — that is, the "number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates" — is just 1.5. That ranks Canada number 22 of the 23 countries in North America in terms of fertility.

The replacement level fertility rate — the rate "at which a population exactly replaces itself from one generation to the next" — without immigration, on the other hand, is somewhere around 2.1 (with variances for mortality rates). To put a pin in it, the UN notes: "In Canada, recent population changes have largely been driven by immigration, which remains the main driver of population growth in the country."

Not surprisingly, the United States has the largest foreign-born population in the world, but Canada — with a population just 11.4 percent of the size (37,694,085 vs. just over 330,570,000 in the United States) — clocks in at number eight on the list.

Second, the country has fallen below its immigration target of 351,000 this year, admitting just 128,430 permanent residents through August. That has likely been due to the fact that the country's borders are largely closed, as well as to the fact that immigrants are probably less inclined to head to a country that is still struggling economically.

Despite its lack of popularity among the voters, the Liberal Party government of Justin Trudeau touts increased immigration as a way out of Canada's pandemic woes. Specifically, according to the prime minister:

To rebuild a stronger economy, we need to have enough workers to maintain supply chains, allow businesses to expand and create more jobs for Canadians. ... Whether in long term care homes, the tech sector or local restaurants, this crisis has highlighted the important contributions that newcomers make to our communities.

I trust that the PM knows more about his country than I do, but I question the validity of his thesis.

About 76 percent of Canadians work in the service industry (compared to just less than 79 percent in the United States, a number that has remained fairly static over the past decade), but petroleum and other mineral fuels production is a key (if not the main key) to Canada's overall economy.

A May 2018 headline in the Financial Post puts this best: "Like it or not, crude oil is the biggest reason for Canada's prosperity". That article explains: "The oil industry looms large in the Canadian economy and, in many ways, pays the rent in Canada. ... Canada is a trading nation. We owe our economic prosperity and relatively high per-capita income to trade — and crude oil dominates that trade."

As the World Bank noted in a report last month, however, the energy sector has taken a huge hit in the pandemic, while commodity prices for agriculture and metals have more or less stabilized above their pre-pandemic levels. Simply put, until oil rebounds (likely when the world as a whole reopens), "local restaurants" and other service businesses in Canada as a whole are not likely to need that many new workers.

Of course, even before the pandemic, unemployment was not evenly spread across Canada's 10 provinces and three territories. In 2019, the provinces of Ontario, Quebec, and British Columbia — home to the major metropolitan centers of Toronto, Montreal, and Vancouver, respectively — had lower unemployment rates (5.6 percent, 5.1 percent, and 4.7 percent, again respectively) than Canada as a whole (5.7 percent).

Petroleum-rich Alberta, on the other hand, had an unemployment rate that was well above the national average last year: 6.9 percent. Healthcare, retail trade, and other services combined did not come close to touching mining, quarrying, and oil and gas extraction in terms of GDP in that province by percentage.

Alberta's unemployment rate in October was actually below the national average (10.7 percent, likely reflecting the fact that it is not as dependent on the services sector), but still high in a province that has the country's third and fifth largest cities, Calgary and Edmonton (once more, respectively).

As for the "tech sector", and meaning no disrespect to Trudeau or his country, it is not that big a driver for the Canadian economy. "Information and communications technologies", as the government there describes it ("ICT", likely what Trudeau meant by the "tech sector"), represented just 3.6 percent of the Canadian economy — 666,540 workers — in 2019.

ICT likely has been a growth sector in light of pandemic shutdowns (though it grew just 2.1 percent last year, pre-pandemic), and the wages are good (on average C$82,221, or 53.7 percent higher than the national average in 2019). But how many of the proposed 401,000 new immigrants would simply displace Canadians in those jobs, instead of creating new ICT jobs?

A January 2019 report from Canada's Brookfield Institute reported that in 2016, immigrants made up 37.5 percent of tech workers, and were twice as likely as those who were not immigrants to be tech workers. That suggests that many immigrants are replacement workers, as opposed to job creators, but of course it is not dispositive.

Despite these facts the government of Justin Trudeau wants more immigration. Who is really in the best position to determine whether Canada needs an increased number of immigrants in the coming years? The Canadian people, of course. And, at the moment, they are not sold on the idea. In light of Canada's history, that is significant, but in terms of recent events, not surprising.

If you can't pay the rent, you are probably not going out to eat, either.

Topics: Canada