“The question is: Why do we need immigration? Well, five million Canadians are set to retire by 2035. And we have fewer people working to support seniors and retirees,” Immigration Minister Ahmed Hussen said recently, echoing the watchwords of Prime Minister Justin Trudeau.The Liberals repeatedly maintain higher immigration will, as Hussen says, “help us to ease the great challenges of the coming years, such as the slowing labour force growth and labour shortages linked to Canada’s aging population.”But do the minister’s claims check out?The short answer is: Not really. Leading Canadian economists say the Liberals’ claim that higher immigration levels will offset the aging of Canada’s workforce is, at the least, extremely exaggerated.As one economist half-joked, the only way immigration alone could actually make up for the country’s aging workforce would be if Canada exclusively brought in only 15-year-old orphans.There are two reasons we can’t expect immigration to come close to balancing out the retirement of workers:1: Immigrants themselves age, and then leave the workforce.2: Most immigrants come with dependents, including non-working children and spouses — as well as parents and grandparents.Canada’s business-oriented C.D. Howe Institute has produced a report showing Ottawa would have to bring in 1.4 million immigrants a year for decades to counteract the country’s low birthrate and the retirement of workers.That would be a rate four times higher than the 2018 historical record of 321,000, which polls by Ipsos and others show more than half of Canadians oppose. It adds up to a “preposterous scenario,” C.D. Howe says.“Canadians in general, and policy-makers in particular, should not think of immigration as an antidote to demographic and fiscal pressures,” says the report, concluding immigration has only a “muted impact” on Canada’s age structure.Related
Immigration is a “terrible” way to respond to the demographics of aging, emphasizes UBC economist David Green.“It’s not just that immigrants age. It’s that immigrants come with families. As soon as that’s true, you’re not going to alter the age structure dramatically through immigration,” Green told a recent Conference Board of Canada event in Vancouver.It was Green, during a coffee break, who remarked the only conceivable way immigrants could offset Canada’s aging workforce would be if they were exclusively 15-year-old orphans. That’s because it would take 50 years for the teens to reach retirement age and, as orphans, they wouldn’t need to bring in any parents or grandparents.Green first heard the line from McMaster University economist Byron Spencer, whom I contacted. In a peer-reviewed paper Spencer and his team warned long ago, in the 1990s, it’s virtually impossible for immigration to forestall the aging of Canada’s population. But very few listened then. Or today.
This Conference Board of Canada poster mirrors the message of the Liberals, in the way it acts as if high immigration will off-set retiring workers. Economists say it has minimal effect.
Some immigration specialists get the reality check, however. A senior immigration department director at the Conference Board workshop quietly acknowledged that, since immigrants age, they have minimal impact on countering the retiring demographic.Maybe someone in the immigration department should suggest to Hussen and Trudeau they tone down their rhetoric.Meanwhile, Hussen just pushes the big talk.“In 1971 there were 6.6 people of working age for each senior. By 2012 that ratio of worker to retiree had dropped to four to one. And projections put the ratio at two to one by 2036,” Hussen repeats in speeches.“If we’re going to be able to commit to keep our commitments for health care, for pensions, and all of our other social programs, and to continue to grow our economy and meet our labour market needs, in the decades to come we must respond to this clear demographic challenge.”Making things worse, Hussen, in a recent announcement in Surrey, which has a large population of Indo-Canadian immigrants, boasted of expanding the family reunification program, which does the opposite of replacing retiring workers.The federal Conservatives had lowered the number of parents and grandparents allowed in to Canada to 5,000 a year. But Hussen proudly proclaimed the Liberals are raising the number to 20,000 because “we recognize that parents and their children and their grandchildren just want one thing: they just simply want to be together and they don’t want to be kept apart. And the faster we can do that, the better.”Are there more effective ways than immigration to offset Canada’s low birthrate, the retiring of the workforce and the fact people now live on average to 82? These phenomena are not unique to Canada.McMaster’s Spencer offers a straightforward answer: “The effects of population aging on per capita income could be offset in the medium term by later retirement and, in the longer term, by growth in productivity.” The C.D. Howe Institute agrees.To that end the Conservatives, while keeping immigration rates steady, years ago announced their intention to follow the lead of Denmark, Australia, Britain, Finland, the U.S. and other countries and gradually lengthen the age of eligibility for such things as Old Age Security from 65 to 67.For its own reasons, however, the Liberals killed the plan to extend the retirement age, instead trotting out increased immigration as the email@example.com