Canadian Economist Calls for Employment-Based Immigration Selection Process

A new report by SFU Professor of Economics (Emeritus) and Fraser Institute senior fellow Herbert Grubel calls for a total overhaul of Canada’s immigration selection process (Simon Fraser University)

A new report by Canadian economist and former Member of Parliament Herbert Grubel calls for Canada’s point-based immigration selection process to be completely replaced with one based on employment.

Grubel, who is a Fraser Institute senior fellow and a professor emeritus of economics with Simon Fraser University has been a longtime proponent of placing more limits on immigration, a position which he views as an extension of his fiscal conservatism.

The report contends that immigration costs Canadians $20 billion annually, as a result of immigrants paying less in taxes while using up just as much in government services as the native-born population.

While welcoming some of the recent changes made to the immigration selection process by former Immigration Minister Jason Kenney, Grubel argues that they do not go far enough, and proposes two major changes to Canadian immigration to make it more economically beneficial to native-born Canadians:

  • Elimination of parent and grandparent (PGP) sponsorship for new immigrants. The report notes that following the initial 10-year period when sponsors are financially responsibility for the costs of the social benefits received by their sponsored PGP, the percentage within this cohort that receives social assistance immediately increased from 3 percent to 20 percent.

    While welcoming the new 20-year sponsorship period that is to come into effect for the PGP sponsorship program, Grubel says that the enforcement of the sponsor’s responsibilities will be difficult, and it would be simpler to simply eliminate PGP sponsorship as a permanent residency program.

    Grubel proposes a transition period whereby all immigrants who became permanent residents before his proposed rule change maintain their right to sponsor their PGPs for permanent residency, while immigrants who arrive after lose this privilege. In this way, Grubel argues the elimination of the program can be done fairly, by allowing those who immigrated to Canada under the assumption that they would be able to sponsor their PGPs to retain this ability.

  • Replace point-based assessment method of selection with employment-based selection. Grubel suggests only skilled workers with pre-arranged employment should be admitted under the skilled worker program. He argues that employer decisions on who to hire provide better information on who has the skills to succeed in Canada than a bureaucratic process created by civil servants.

    He proposes however to keep the federal government involved in setting minimum standards and wages, to prevent employers from using immigration to secure low wage labourers that cost taxpayers more in the provision of social services than they pay in taxes.

    An employment-driven skilled worker program, the report suggests, would adjust the number of immigrants admitted according to economic conditions, where immigration would decline when jobs are scarce, and increase when jobs are plentiful. The number admitted per year would therefore match the needs of the Canadian economy better than a number selected through the political process.

Critique of report by the Broadbent Institute

The report’s proposal to dramatically overhaul the Canadian immigration selection process has, predictably, found critics. A recent article from Broadbent Institute fellow Patti Tamara Lenard challenges several of its claims.

Lenard argues that the report’s conclusion that immigrants impose a fiscal burden on other Canadians, which it draws from statistics showing recent immigrants have a lower average income and pay less in taxes than the average native-born Canadian, neglects the fact that immigrants are younger than the average Canadian when they arrive in Canada, and therefore is faulty.

The report’s analysis of immigrant income does not include only immigrants who just arrived in Canada however. The immigrant cohort used by Grubel’s comparison is individuals who arrived in Canada between 1986 and 2004, and the length of time they were in Canada ranged from 1 to 18 years.

While Lenard’s suggestion that the analysis compares younger immigrants to older native-born Canadians is not supported by the composition of the dataset used by the report, it is true that Grubel does not make an effort to control for age in his analysis, and therefore it could be an unaccounted factor in the income gap.

Lenard also disputes the report’s assumption that immigrants are as likely to use social programs as the rest of the Canadian population, citing a Swedish study that finds that Canadian immigrants use fewer social services than the general population. The report’s estimation on the cost of the social services used by Canadian immigrants is therefore too high she argues.

Lenard’s article in places makes some hasty and inaccurate criticisms of Grubel’s report. She claims for instance that the report states that “in 2011 over 50,000 [Parent and Grandparent] immigrants entered Canada”, but that the actual number was 14,000.

In actuality, the report cites Citizenship and Immigration Canada’s (CIC) own data projecting that over 50,000 PGPs will become permanent residents over 2012 AND 2013, a two year period, not in a single year, 2011.

Lenard also claims that the report “implies .. we should expect [PGP's] health care costs to mimic those of Canadians aged over 65″, and that this is misleading, due to the fact that PGPs’ health care costs are covered by their sponsors for the first 10 years after their arrival. The content of the report does not support Lenard’s claim, as it clearly conveys the same point Lenard claims it neglected, and instead focuses on indications of high social assistance costs for PGPs once they turn 75 and are no longer the financial responsibility of their sponsors.

Gaps in data

While the Broadbent Institute’s review of Grubel’s report falls short in providing an informed critique of the report’s proposals and arguments, it does touch on the gaps in the data on the economic impact of Canadian immigration, and the heavy reliance on conjecture – which is more subject to the influence of ideology – in discussions on the optimal immigration selection process for Canada.

As a result of the many unknowns surrounding immigration and its impact, it will likely remain a contentious issue in Canada for years to come, until more data on the economic outcomes of Canadian immigrants is generated, and Canadians have a clearer picture of what programs work and which ones don’t.

Parent and Grandparent Immigration Program to Re-Open in 2014

Citizenship and Immigration Canada announced on Friday that it is re-opening the Parent and Grandparent Sponsorship Program in January 2014, with new financial requirements and responsibilities for sponsoring children and grandchildren

Citizenship and Immigration Canada (CIC) announced on Friday that it will lift the moratorium on new Parent and Grandparent (PGP) permanent resident applications on January 2, 2014.

The program has been closed to new applications since November 2011 to give CIC time to work down the mounting backlog of parent and grandparent sponsorship applications.

Commenting on the program re-opening, Citizenship and Immigration Minister Jason Kenney said:

“The Action Plan for Faster Family Reunification is on track to meet the goals of cutting in half the backlog and wait times in the Parent and Grandparent program. It is very important that we continue to make progress and not return to the old broken system with wait times as long as a decade—that would be unfair to families.”

CIC also said that the total number of parents and grandparents admitted as permanent residents through 2012 and 2013 will be 50,000 which is the highest level in 20 years, and it intends on maintaining these levels in 2014.

Another change announced on Friday is the Super Visa program, while allows foreign parents and grandparents of Canadians to visit Canada for up to ten years, for two years at a time, becoming permanent. Over 15,000 Super Visas have been granted since the program started in December 2011.

With regard to the Parent and Grandparent sponsorship program, CIC says they plan on accepting 5,000 new applications in 2014, and continue to reduce the backlog by processing applications faster than receiving them.

New financial requirements for Parent and Grandparent sponsorships

When the Parent and Grandparent sponsorship program re-opens next year, it will be with new qualifying criteria which will increase the financial responsibility of sponsors to ensure their parents and grandparents can be supported for the remainder of their life in Canada and to reduce the likelihood they will increase expenses for Canada’s social welfare programs.

Minimum income for sponsors will increase from the current Minimum Necessary Income (MNI), an income threshold used by the federal government to establish eligibility in many programs, to Minimum Necessary Income + 30 percent, to account for the greater costs of supporting an elderly person.

The type of proof of income that CIC will accept will be limited to documents from the Canada Revenue Agency, and the length of time that a person applying to be a sponsor has to demonstrate that they met the minimum income requirements will be increased from the current one year to three years.

Kenney said these changes are necessary to protect Canadians from being burdened by higher taxes as a result of sponsors having inadequate financial resources to support their sponsored parents and grandparents:

“These new criteria ensure sponsored family members are well supported by their sponsors throughout their time in Canada. The redesigned Parent and Grandparent program reunites families faster while respecting Canadian taxpayers and the limited resources for health and social programs.”

CIC says that Canada is one of the few developed countries to allow grandparent sponsorship, with this option either not existing or being extremely limited in United States, United Kingdom, Australia and New Zealand, and measures like those announced Friday are needed to prevent this generosity from being abused.

Age limit on Dependent Children sponsorship

The Dependent Children sponsorship program is also going to see maximum age limit of 19 years imposed, disqualifying those older than 19 years old from being considered dependent children even if they are full time students or financially dependent on their parents.

The change was made after research by CIC found that many of those qualifying as dependent children were in their late 20s or 30s, and that those who immigrate at an older age have a lower likelihood of successfully integrating into the Canadian labour market and have poorer socioeconomic outcomes than those who immigrate at a younger age.

Family Class Immigration Increases by 15% in 2012

Family class permanent residence applications increased by 15 percent in 2012 over the year before according to Citizenship and Immigration Canada

Citizenship and Immigration Canada (CIC) announced on Tuesday a 15 percent increase in the number of individuals admitted under the family class immigration program in 2012 over the year before.

In the announcement, Citizenship and Immigration Minister Jason Kenney promoted CIC’s faster processing of family class applications:

“By reducing the backlog through increased admissions, we have dramatically reduced wait times so that parents and grandparents no longer have to wait close to a decade to be reunited with their loved ones.”

The increase in admissions occurred despite CIC having stopped accepting new applications under the Parent and Grandparent stream of the family class program in November 2011. The moratorium on new Parent and Grandparent sponsorship applications likely contributed to the reduction in the program backlog.

CIC is targeting a 50 percent reduction in the family class application backlog and in the processing time of applications in 2013.

The department has been moving away from sponsorship of Parent and Grandparents for permanent residence, and moving toward extended temporary stays, with the creation of a new ‘Parent and Grandparent Super Visa’ in December 2011 that allows unlimited re-entries for parents and grandparents of Canadians for up to ten years, and allows them to stay in Canada for two years on each visit.

‘Super Visa’ a Big Hit, Over 3500 Granted Since Dec.

A grandfather plays with his granddaughter. The Super Visa lets parents and grandparents of Canadian permanent residents and citizens visit Canada for up to 10 years without being required to apply for visa renewals and extensions. (Burpelson AFB)

The new Super Visa, a special visa for the parents and grandparents of Canadian citizens and permanent residents, has been granted to over 3,500 applicants since its introduction in December of last year, according to the Canadian Immigration Ministry.

The Ministry said that 83 percent of applications have thus far been approved, with an average processing time of less than eight weeks.

The Parent and Grandparent Super Visa was introduced as a replacement for the parent and grandparent category of the family sponsorship for permanent residence program, which was temporarily suspended in November 2011 in order to stem the build-up in the backlog of sponsorship applications in the parent and grandparent category.

The new visa allows holders to visit Canada for up to 10 years, and stay for up to two years on each visit without being required to get an extension after six months as required by holders of regular visitor visas.