Canada Through The Looking Glass – 3

Migration and temporary foreign workers

Summary

Two of the opposing views on immigration policy are first to maintain or reduce current levels, and second to increase immigration flows into Canada. Those who oppose increases point to existing levels of unemployment; those favouring increases highlight the ageing of the Canadian population and the need for younger people.

Discourse which favours either increased or reduced immigration seems to ignore relevant facts and evidence when making their respective cases. My preference would be to decide what size of population the country wants, which roughly seems to be the case for the Scandinavian countries and others in Western Europe, and to work back from there regarding policies related to immigration and the use of temporary foreign workers.

Why the need for temporary foreign workers?

Unemployment in Canada is currently at 7.4 per cent which amounts to 1.4 million people. At the same time the country is host to about 350,000 temporary foreign workers. If 350,000 of the unemployed undertook the jobs of temporary foreign workers, the unemployment rate would fall to 5 percent, which is about as close to full employment that it is possible to get. (Note, a former federal labour Minister stated that there were also an estimated 500,000 illegal migrants, many of whom had jobs, in Canada. This compares with the estimated 12 million illegals in the US.)

There seems to be a labour market problem. The available supply of unemployed workers is not able or not willing to do the work of temporary foreign workers, for example in coal mining and the agricultural sector. There are a number of ways to address this problem. If training is needed, then arrange for training which may require language as well as skills training. If it is a case of unwillingness to do certain types of work, then this may be alleviated either by increasing wage rates, and/or withdrawing government support from those unwilling to do certain jobs. There is a disconnect between having people unemployed and complaining about the presence of temporary foreign workers.

Does an ageing population matter?

The ageing of the population refers to the future increase in the share of the population that is either retired or too young to be in the labour force. It happens to countries at different times, and is used by some to argue for increased immigration (permanent and/or temporary) to make up the difference. Is it a problem and are there other ways to address it?

Much research is published on this topic, including at Oxford University and the UN. It indicates that Canada is far from alone in experiencing an ageing population, and discusses what steps, aside from immigration, can be taken to address the issue.

Globally, in 1950, there were 9.3 people under 20 for every person over 65. Only 456 months from now, by 2050, the forecast is for 0.59 persons under 20 for every person over 65. A UN study for 2009 ranks 196 countries by percentage of population 60+ years. Japan ranks first at 29.7% and Quatar last at 1.9%; Canada ranks 30th at 19.5%. For developed countries as a group the figure is 21.4% and for Western Europe 23.9%.

Aside from increased immigration, the shortfall can be reduced in different ways. One is to get people to work longer by not offering state or private pensions until they reach an older age. Another is to offer higher wages to those who are willing to work longer. Subsidised childcare and homecare for the aged, part-time work and work-at-home are other alternatives to expand the size of the active labour force. Reduced communications costs make it possible for work to be sent to the home as opposed to people travelling to work. This is a form of insourcing as opposed to outsourcing.

Countries with ageing populations seem to survive. Possibly they could grow faster with more people in the active labour force, but that may pose other difficulties. For example, if Switzerland and Singapore had no restrictions on immigration and temporary foreign workers, there would be a tsunami of people flooding these countries and the lifestyles those living there would be changed drastically.

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One Response to “Canada Through The Looking Glass – 3”

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