The Fraser Institute

The Fraser Institute

May 17, 2011 06:31 ET

The Fraser Institute: Canada's Immigrant Selection Process Should Focus on Job Offers; Current Policies Imposing a Heavy Fiscal Burden on Taxpayers

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 17, 2011) - Canada's immigrant selection process needs to be revamped to focus on admitting people with Canadian job offers and skills needed by employers, recommends a new report released today by the Fraser Institute, Canada's leading public policy think-tank.

"Recent immigrants earn incomes that are, on average, just 72 per cent of those earned by other Canadians and pay only about one-half of the income taxes paid by other Canadians. At the same time, they absorb nearly the same value of government services and transfers as other Canadians," said Herbert Grubel, a co-author of the study and a Fraser Institute senior fellow and professor emeritus at Simon Fraser University.

"As a result of Canada's welfare-state policies, our progressive income taxes, and universal social programs, these immigrants impose a huge fiscal burden on Canadian taxpayers."

Using publicly available government statistics, the report, Immigration and the Canadian Welfare State 2011, calculates that the difference between immigrants' tax payments and the value of government services they absorb was about $6,051 per immigrant in 2006, representing a total cost to Canadian taxpayers of $16.3 billion to $23.6 billion annually.

"This is a substantial amount and is expected to continue to grow for as long as the present immigration policies remain in place," said Patrick Grady, economic consultant and co-author of the report.

As an example, the report notes that in 2009, family-class immigrants made up 22.1 per cent of all immigrants who entered Canada that year. Those who were selected by the federal government on the basis of their occupational skills and other characteristics contributing to their economic success accounted for only 16.2 per cent.

With the aging of Canada's population and the growing unfunded liabilities of social programs, Canada simply cannot afford to absorb the growing cost burdens imposed by poorly selected immigrants," Grubel said.

Grubel and Grady conclude that in order to alleviate the fiscal strain on taxpayers, Canada's immigration selection process should be reformed to emphasize a reliance on market forces to replace the existing, failed system of using points to select immigrants. Their recommendations include:

  • Issuing temporary work visas to obtain entry into Canada for applicants who have a legitimate job offer from an employer in Canada, paying at least the median wage prevailing in the province in which they will be employed;
  • Work visas will be valid for two years and may be renewed for two years upon the presentation of evidence of continued employment;
  • Spouses and dependents of the holders of work visas may enter Canada under a program of family work visas, which allow them to accept employment;
  • Holders of work visas who lose their jobs must find new employment within three months or leave Canada, unless their spouse is employed under the family-work-visa provision;
  • After four years in Canada and continued employment, the holders of work visas can obtain permanent immigrant visas. Landed immigrants will be eligible to apply for citizenship two years later; and
  • Immigrants may have their parents and grandparents join them as landed immigrants in Canada after posting a bond to cover payments for health care and other social benefits.

"Our proposed system would eliminate the misguided attempt by government to determine the number of immigrants that should be allowed to enter Canada and the skill set of those people. These are determinations best left to employers and the job market," Grady said.

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The Fraser Institute is an independent research and educational organization with locations across North America and partnerships in more than 80 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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