≡ Menu

Immigration and its Role in Society

As known to most, if not all, of us, Canada is a vast country with a relatively small population. Immigration is a vital component to Canada’s population and economic growth and Canadian immigration policies are reviewed and reformed by the government to streamline and address present day and pressing issues.

However, this post is not an overview of the immigration policies but a take on the general impact on Canada due to immigration. This topic is a sensitive issue and the post is not meant to hurt anyone (immigrant or otherwise); it is simply a means to open a discussion among the readers.

Economic Influence

One of the benefits of immigration is the availability of an increased labor pool – both in the skilled and unskilled categories. The need for medical doctors in rural Canada is a case in point and immigrant doctors can fulfill this need, at least on a temporary basis, before they depart to the city.

The law of supply and demand dictates that an increased labor pool (supply) at times of steady demand will lead to a drop in cost (employee wages). On the other hand, shortage in labor supply at times of steady demand or steady labor supply at times of increased demand may push wages up as employers fight for the limited human resources available.

Maintaining a balance between labor supply and demand is essential for economic growth and prosperity and immigration lends a global perspective to the country’s socio-economic scenario. In addition, an increased labor pool at the right time leads to an increase in construction of homes to accommodate the newcomers and overall spending, which provides a fillip to the economy.

Cultural Influence

Immigration opens doors for people from two different countries to meet, mingle, and form long-standing friendships. The diversity in cultures and the presence of various organizations/events celebrating them is testimony to the success of the immigration policies in Canada. Sharing of knowledge and views among people from diverse backgrounds leads to better education opportunities as it provides a first-hand international flavor.

Comparative Advantage

The theory of comparative advantage refers to the ability of an individual or a nation to produce a good or service at a lower cost over another. Hiring a trained immigrant worker for a certain job may be more advantageous than hiring an untrained worker from Canada and spending several weeks/months to get them up to speed. The need for prolonged training in some cases and delay in project completion could prove expensive.

All of the above addressed the pros of immigration but there are cons to be discussed as well.

Population Imbalance

Typically, immigrants land in the big cities, i.e., ones with the best job market. There was a time when Ontario was the go-to location; now, we see people moving from the east to the west as a paradigm shift occurs. In both cases, there was/is overcrowding. Many immigrants prefer the cities that offer the better infrastructure as newcomers seek the best life that the country has to offer. So, despite the influx of overseas talent, they seem to be concentrated in the cities, leaving the rural and suburban areas scrambling.

Financial Drain

The additional costs borne by the government to support the education and health care of immigrant families may or may not be completely offset by the value offered by immigrants through their skill set. To put the above statement in perspective, immigrants bringing skills that are relatively scarce to find in Canada is different from those who compete for the easier unskilled jobs with existing workers.

This post is only skimming the surface and I’m fairly certain that there are other pros and cons involved but I’ll let you discuss them in the comments section.

Have you formed any long-standing friendships with immigrants? Do you like the cultural diversity that they bring to Canada? Do you think that we are close to a saturation point in terms of financial burden?

About the Author: Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.

If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you).

About the author: Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.

{ 26 comments… add one }
  • danp June 20, 2012, 10:51 am

    Is it just me, or does this seem border line racist?

  • Daryl June 20, 2012, 11:46 am

    I don’t really see it as racist.

    Just an information post of facts with no real negative bias.

  • guinness416 June 20, 2012, 12:00 pm

    No danp, but the questions at the end seem a bit …. odd, especially as no doubt a whole bunch of us reading ARE that exotic/controversial thing, the immigrant. So anyway in answer to the questions:

    Have you formed any long-standing friendships with immigrants?
    Yes, I am one, as is my spouse, approx 75% of my coworkers, most of my friends and many of my neighbours.

    Do you like the cultural diversity that they bring to Canada?
    Yes indeedy.

    Do you think that we are close to a saturation point in terms of financial burden?
    In my experience the comments section at the Globe is where hundreds of “experts” on this subject reside. Nobody here will have the information to answer this sensibly, but my anecdata is as good as anyone else’s so – no.

  • MD June 20, 2012, 12:05 pm

    “The additional costs borne by the government to support the education and health care of immigrant families may or may not be completely offset by the value offered by immigrants through their skill set. To put the above statement in perspective, immigrants bringing skills that are relatively scarce to find in Canada is different from those who compete for the easier unskilled jobs with existing workers.”

    This is tad short sighted as, even though in some cases the unskilled landed immigrant may cost more than s/he contributes to the pool, it is their children and grandchildren who will prove to be the skilled labour we require.

  • Al June 20, 2012, 12:22 pm

    seems a bit off topic for a financial blog no?

    questions at the end seem parochial.

  • nobleea June 20, 2012, 12:30 pm

    Here in Alberta, we don’t have enough. When you post a job for a professional or skilled trade, the only applicants you will get are recent immigrants. Market is so hot that the caucasian/locals can get a job with a phone call, or get poached.

    Unless, as a Canadian-born citizen, you have 4 or 5 kids you don’t have a right to complain about immigration. The reason we need immigrants is to fill jobs and increase tax base since ‘local’ Canadians are not having enough children.

  • Nikolai Grigoriev June 20, 2012, 12:59 pm

    As an immigrant myself, I can see it from another side…

    First of all, clearly, there are immigrants that are more “compatible” with Canadian population than others. I do not want to sound racist here, but we are all different and the difference between the people of different origin is different ;)

    Secondly, there are two groups of immigrants. Both groups move to Canada for better life – why bother moving for an opposite reason? ;) But one group can already have a decent life in their country of origin and expect to get away from some of its problems or do even better at new place. Another group is trying to increase their quality of life from 0 to something above-zero. Generally, the first group is more contributing to the society than the second one. The second group is expect to get more than they pay. Preferably to get as much as possible while not paying anything.

    While I would not say that any immigrant can tech the Canadians on how to do the things better, more efficiently – I do believe that some immigrants bring in the fresh view on the problems that exist in the country or province (like Quebec). Some of these views are worth studying and considering.

  • Hollywood June 20, 2012, 1:37 pm

    I believe this is a very interesting topic and I enjoy the opinions of all. There is nothing racist about discussing this topic in a respectful manner.

    Diversity in the workplace has many cultural and financial benefits. Research has shown that businesses can financially benefit from the input of a diverse workforce. Small city Alberta and Saskatchewan, are very short workers in the retail, food and beverage, and labour groups. Are immigrant workers willing to come, work, and live in these communities? The jobs are “aplenty”.

  • Steve @ Grocery Alerts Canada June 20, 2012, 1:55 pm

    This is different and not sure how it relates to personal finance but we need more people in Canada – skilled labour.

  • Paul June 20, 2012, 2:05 pm

    I’m heartened I do not see the usual racist ranting that normally accompanies a rather divisive article like this. It is a good crowd follows this blog.
    That said this article is very much delivered from a narrow view of the world. The truth is we start somewhere and very few of us stay there forever. We move about for work, love, hope, etc… From a purely economic sense (and that is the only valid perspective for a finance blog) we are all just a bag of skills and potential tax revenue. Ethnicity shouldn’t come into it, but it does because history shows us that every established wave of immigrants solidify a culture and then persecute those in the next wave because it’s in our nature to better our situation and then concern ourselves with preventing others from doing the same lest it worsen our lot in life. Most discussion on this topic says more about the writers fears than anything else.

  • bob June 20, 2012, 3:29 pm

    What do the questions at the end have to do with the content of the post?

    Is there any information whatsoever in the post that would enable anyone to have an informed opinion on whether we are “close to a saturation point for financial burden”. I’m not even sure that such a thing exists since we are not talking about a zero-sum game. If this is the question you want to answer, why not provide an actual primer on the actual measures used for “financial burden” and “saturation” and links to the data so that they can be evaluated?

    Have I formed any long-standing friendships with immigrants. Is this seriously your talking point?

    Parochial is right.

  • Paul June 20, 2012, 6:13 pm

    “Have you formed any long-standing friendships with immigrants?”

    This does make me giggle a bit.
    The image springs to mind of Clark in his denim over-alls, leaning against his tractor, straw-in-mouth, educating us on the perils of “them dang immigrants”.

    If we are stereotyping Clark deserves a serving too no? :-)

    Your ancestors didn’t grow out of the Canadian soil Clark. Stick to finance.

  • DanP June 20, 2012, 10:43 pm

    After re-reading it, maybe it’s tone isnt racist, but the questions at the end leave alot to be desired.

    “Have you formed any long-standing friendships with immigrants.” That strikes me as a questionable comment at best. That segregates immigrants and make it sound like immigrants are different then the norm.

    I’m not an immigrant, but my parents are. I was born here in Canada, and comments like that still frustrate me. It’s like hearing people ask me where i am from, then being disappointing when i say here in Canada. They always expect a more exotic answer.

  • Ivey June 21, 2012, 12:27 am

    Perhaps it would be better for the economy if we recognized the trades of the people immigrating to Canada, for instance the doctors driving taxis. We should also be focusing our immigration on trades that are not well supported. We need people to do the jobs that Canadians seem to think they are too good for, which I feel stems from upbringing. Most parents think their kids will be doctors and lawyers, so they brainwash them and force them into university, while I’m sure a bunch would be much happier, successful, and debt-free by going to trade school.

  • Ed Rempel June 21, 2012, 2:28 am

    I see a personal finance angle. Immigrants are the solution to our problem of aging demographics and much of our pension problem. Demographics experts say we will have a shortage of both skilled and unskilled workers in 20 years when all the Baby Boomers have retired. We will need immigrants to do the work, pay taxes, and contribute to our pension plans so that us Baby Boomers can retire comfortably.

    Our birth rate will not even maintain our population, so immigrants are necessary, as Noblea pointed out. For example, without immigrants we would have a declining population. Cities with declining populations usually have huge real estate crashes. That is why the average house in Detroit sells for only $7,000. Their declining population means that 110,000 houses are bull-dozed every year with no buyer. We need a constant or growing population to maintain much of our economy.

    I have read a few articles very favourable to immigrants in Canada. On average, immigrants are more highly educated, make more money, are far more likely to start a business & hire people, and far more likely to be a self-made millionaire than people born in Canada.

    I just returned from a conference in the US and saw a short documentary on immigration in the US. It claimed that the US has a net drag on its economy from immigration because almost all their official immigration is families and charitable cases, with less than 10% being allowed in based on merit.

    They didn’t mention MD’s point that even if the first generation is a net drag, their kids and future generations will most likely contribute a lot to our society and economy.

    The interesting part of the US documentary was that they pointed to Canada as a model, claiming that Canada uses a point system and brings in a large number of immigrants based on merit. The main thesis of the documentary was that the US should use Canada’s philosophy of bringing in the best and brightest from around the world.

    It did not mention that Canada’s stated goal is to bring in just over 300,000 immigrants each year, but we have only brought in about 150,000 per year in the last decade. Our immigration department is either too inefficient or not enough of a priority for our government, despite the clear benefits of bringing in more of the world’s best and brightest.

    The other interesting part of the US documentary is that it claimed that the best part of immigration for the US is the flood of illegal immigrants from Mexico. Apparently, they are mostly young & skilled, and they don’t use any government services because they have to stay below the radar. Even though they don’t file tax returns, most have taxes withheld from source on their paycheques, so they do pay tax.

    In short, the documentary claimed that official immigration in the US is a net drag, but the illegal immigration is a strong net benefit. Interesting, isn’t it?

    This does explain the conundrum I have been wondering about. Everyone seems to accept that China will continue to lead the world in growth because they “have a huge supply of cheap labour moving in from the countryside”. However, everyone also seems to accept that the US has a significant immigration problem because the illegal immigrants drag down the economy.

    How can people believe a huge supply of cheap labour is good for China, but bad for the US? Thanks to this documentary, I can see that it is good for both of these countries.

    Clark’s questions may sound strange in areas with high immigration, but Clark is in Saskatchewan, which has a much lower immigrant population. I can understand that, since I grew up in Winnipeg.

    Living in Toronto now, I love the cultural diversity. In Toronto, “we are all minorities”. The “visible minorities” make up more than 50% of the population of the Greater Toronto Area, so we are all minorities. I live in “Bramaladesh” and am just a short drive from “Little Italy”, “Little Greece”, Chinatown, and groups from many other cultures.

    There are less common cultures, as well. I ate at a Turkish restaurant yesterday and recently ate at a nice Persian restaurant. How cool is that?

    The rich diversity is one of the best parts of Toronto.

    Ed

  • sharbit June 21, 2012, 5:07 am

    Interesting post. As Ed said, I think part of the motivation is simply to correct imbalances in the population pyramid. Birth rate right now is someting silly like 1.2%.

    With that you want value with the people you bring in so skill or capital are two things to look for. I think for doctors theres an issue though. From what I understand they arn’t allowed to practice without going to school when they move here. Part of it being a lower quality standard in some cases but not all.

    As far as this being racist; Part of what makes Canada awsome is milticulturalism. There’s a difference between asking questions out of curiousity and coming from a place of hate or ignorance.

    In terms of cheep supply from China. One thing we have to keep in mind is, yes they are growing but they are catching up not inovating. So a majority of this will be infrastructure spending and comes with a long list of problems. I actually think they’ll see a brick wall eventually.

  • Trex83 June 21, 2012, 9:36 am

    Have you formed any long-standing friendships with immigrants?
    Not that I think of, but I have LOTS of friends that are first generation immigrants. They are well educated and have very good values to be a Canadian.
    Do you like the cultural diversity that they bring to Canada?
    Sure, what do you think is Canada? You don’t have to go far back in time to see that it started with Europeans. I’m from France from both sides of the family.
    I love to have knowledge in different family and personal values. It makes the workplace more rich and flexible.
    Do you think that we are close to a saturation point in terms of financial burden? Not sure what you want to trigger as a discussion or what would be the appropriate indicator to measure that (labour stats or employment data from Stats Can?). Like many made comments from Western Canada, I see from the Ottawa or Montreal area that we have the same labour issues in terms of skill sets. However, many of my first generation immigrants friends are lawyers, one a doctor, others engineers or maybe its just the type of people in my circle of friends…
    To comment on one post saying something like ‘not all immigrants are skilled’ it would be important to note that Canada accept refugees from countries in political turmoil. Its good to note the difference between immigrants and refugees. I assume that refugees are seeking a place that accept their liberal views and Canada is seemed to be one of the best countries in the world. Note to self… its the best country in the world.
    Its not bad being a bit proud like our southern neighbors! Happy Canada day festivities and bonne St-Jean Baptiste!

  • Over-Educated June 21, 2012, 10:41 am

    I am an immigrant, having come to Canada with my parents at around age 20. The common theme is that the first generation is working in manufacuring industries of some sort, the second generation becomes professionals (doctors, dentists, lawyers, engineers, etc.), and the third generation starts to slack off. “Battle Hymn of the Tiger Mother” provides a good illustration of the second-generation worries. As a lawyer with a dad in a manufacturing industry, I guess that makes me second generation, so I anticipate the day that one of my children will tell me that they are going to study art history.

    Seriously, though, I have noticed a distinct difference in the work ethic among immigrants and established Canadians. Most of the immigrants I know work 12-16 hour days in businesses. One runs a dental lab, worked seven days a week and paid off his mortgage in three years. Another has a 9-5 job in IT but works another job on weekends to support his parents. I myself work six days a week and quite a few evenings. I have seen too much financial worry and heartbreak with my own parents to not make damn sure my own family will be financially secure. My dad, who will turn 70 next year, has no Canadian pension and will likely work in his business until his health gives out. Retirement is not even an option, and I fully anticipate having to support him down the road.

    Among my Canadian friends, on the other hand, most slipped straight into cushy government jobs after university, or in a few cases even without university, and are strictly 9-5. My mother-in-law just took an early government retirement pension at age 60. She wonders why my dad is working so hard. My sister-in-law gets to leave her government job at 12:30 on Fridays. These are really two different worlds.

  • Kincade June 21, 2012, 12:03 pm

    Over-Educated that’s a little simplistic in my view. I don’t think it’s that straightforward to characterize striving, responsible immigrants versus complacent natives.

    Immigrants – and I am one – are not of one story. Just among people I know there are the disappointed cab driving engineers, the work-3-job strivers, the sacrifice-everything-for-the-kids types, the elite professionals, the people who came for an arranged marriage and hate it here, the small business owners, the startup-world hipsters, the partying 20-something europeans, the guys just biding time til they can get a US visa, the idle living off big bucks made in a less cushy homeland, the professional students, people who only want to live among fellow citizens of X, people who never want to see fellow citizens of X ever again, and probably a zillion other themes that I haven’t encountered. Some of the above are financially responsible and some are decidedly not. And though it shouldn’t HAVE to be said none of this is dependant on individual nationality or ethnicity despite what someone else above is, uh, arguing.

    It’s applicable to your own background but that “selfless first generation who sacrificed everything” story can be as meaningless as the “they’re all spongers!” xenophobic stuff when applied with a broad brush, neither is reality for all of us.

  • Steve June 22, 2012, 12:02 pm

    Even when it was the bears, I knew it was the immigants.

  • Steve @ Grocery Alerts Canada June 22, 2012, 8:37 pm

    Ed,

    Do you have the name of the documentary?

    It sounds interesting and relatable to the topic.

  • SST June 23, 2012, 2:25 pm

    I am close with two first-generation immigrants, one from Czechoslovakia, one from the Philippines.

    The one from the Philippines moved here to improve her standard of living (in many ways, not just monetary). She was a professional in her native land, yet had to start all over because of the “great” Canadian standardization of education (I was unaware mathematical functions differ across borders). She worked three jobs (and still does) all the while studying many hours every day to get the coveted Canadian degree. Now she works like woman possessed. Why? Simple — she wants to be a millionaire. She has stated a number of times that she is “only a millionaire in one country”. Oh, she also owns a business back in the Philippines. Even more amazing than her work ethic was her conviction to a single goal: to bring her family to Canada. She lived ten years apart from her husband and children, putting her children through college and watching some of them get married — from the other side of the planet. A strong woman, indeed.

    The other woman, just as strong, has a different take on things. As a teenager, she fled both her family and country during the invasion of Czechoslovakia in 1968. Egypt and a few other countries before landing in Canada, still without her family. Now all but retired, she states this about Canadians: you are so worried about money, you don’t know how to enjoy life. This coming from a person who has experienced first-hand the value of life. I tend to agree. Her son entered the financial industry a few years ago and she said his personality has changed considerably — all he does now is think about money.

    Being a citizen of a stable, prosperous, and safe country that is Canada, it’s very easy to forget (or be totally unaware) how the other half (quite literally) lives.

    There are profound lessons to be learned from immigrants.

    Try tracing your own lineage to see what your immigrant ancestors endured and brought to Canada.

  • Robert June 24, 2012, 8:22 am

    This is funny. Let me ask you, Clark. Are you a visual minority, or first nation?

    Otherwise, you are the second or third or forth generation of immigrant based on the fact that Canada is only 200 years old.

    Without immigration, is there any way for Canada to sustain in the future financially?

    ” Have you formed any long-standing friendships with immigrants? Do you like the cultural diversity that they bring to Canada? Do you think that we are close to a saturation point in terms of financial burden?”

    When you ask “you” in the above sentence, whom on earth are you pointing at? Are you pointing at yourself, the second or third generation of immigrant?

    I would like to hear your answer, Clark, who has immigrant ancestors.

  • Ed Rempel June 24, 2012, 3:08 pm

    Hi Steve,

    It was a news story that I watched on Bloomberg while I was in Boston related to Obama’s policy.

    I’ll see if I can find it.

    Ed

  • Clark June 24, 2012, 10:36 pm

    @All: I agree that the questions at the end are probably irrelevant to the main post. They were only included with an intent to bring out some interesting personal episodes/stories like they did from a few readers.

  • Olusola July 8, 2012, 12:31 am

    My first reaction on reading this post and seeing the questions at the end is that the author assumes only non-immigrants read the milliondollarjourney.

    I’m a new immigrant to Canada and I think this post could have been better researched and more factual/life-experience based. Immigration is a a topic that people feel very strongly about regardless of where they’re coming from. A post on immigration that just “skims” is a disservice to this blog.

Leave a Comment