Do Canada's Immigration Targets Make Sense?

Last week the federal government introduced a cap on international student visas. Going forward they will be distributed to the provinces on a per-capita basis. That got us thinking about Canada’s immigration policies in general. Canada’s openness to immigrants has always been one of Canada's great strengths. Our temporary immigration programs have some unique problems that are really tough to solve, but what about Canada’s permanent immigration system? How does it work? And do we have the right targets for Canada’s success?

In this 15-minute episode of the Missing Middle Podcast, Smart Prosperity Institute economist Mike Moffatt and journalist Cara Stern about the permanent and temporary streams of Canadian immigration, providing a lens through which to view the broader impact of the Trudeau government's targets on Canada's future growth and diversity.

Hosted by Mike Moffatt & Cara Stern

Produced by Meredith Martin

This podcast is funded by the Neptis Foundation and brought to you by the Smart Prosperity Institute.

Transcript

Cara Stern: 0:18

Hi and welcome to the Missing Middle. I'm Cara Stern.

Mike Moffatt: 0:22

And I'm Mike Moffitt.

Cara Stern: 0:23

And last week the federal government introduced a cap on international student visas and, going forward, they'll be distributed to the provinces on a per capita basis. But that got me thinking about Canada's immigration system in general. Our openness to immigrants, we know, has always been one of Canada's great strengths, and our temporary immigration programs have some unique problems that are really tough to solve. But we thought today let's talk about the permanent immigration system. So, first of all, what's the difference, mike, between a permanent immigrant, permanent resident, and temporary immigration?

Mike Moffatt: 0:56

Yeah. So on the non permanent side, it's people who are on a visa that will expire, so that could be international student, temporary foreign worker and so on. And, as we've seen in our discourse, there's no cap on that. There's no limit to that, at least until recently. Now, what we consider, normally consider immigration is permanent residency. So those are people who apply and, you know, are allowed to live in Canada permanently. We do have a cap for that and we should recognize that permanent residency. Not all of the people who obtain that are newcomers to Canada. Some are, but some are actually non permanent residents who have been here for years and are just switching over from being non permanent to permanent. So when we talk about, you know, an immigration target being 500,000 people, we should recognize that that doesn't mean we're going to have 500,000 newcomers, because we have newcomers who are non permanent residents. But as well, even in that immigration target, a lot of that is people who have been here for some time obtaining permanent residency.

Cara Stern: 2:08

Okay, so we know the targets have moved over the years. There was roughly a quarter million each year between 2001 and 2017. And then the liberal government started increasing it around then to more than about 300,000 per year, and targets have increased each year since to around half a million a year right now, and that's what it looks like it's going to be in the next few years. Is that a lot for our country?

Mike Moffatt: 2:30

So you get into these questions about like sort of relative to what. So we can look at this in absolute terms. Okay, you know 500,000 people. In absolute terms the answer is yes. I mean that is higher than I think anytime in Canadian history we kind of peeked around World War One or so but we could also look at this relative to the population. You know how many? You know how high is our immigration target relative to the overall size of the population? So if we have a target of 500,000 people and a population of 40 million, there's basically 12 new immigrants for every 1000 people. That's a little bit higher than in recent years.

Mike Moffatt: 3:14

We've been, you know, closer to that eight to nine level for the last 30 years or so. So you know it is somewhat of an increase but it's, you know, much, much lower than other periods in history. You know we had years in the 50s, 60s and 70s we were closer to that 15 to 20 level and again around World War One we were closer to 60 out of 1000. So you know, relative to the size of the population, it's, you know it's nowhere near the highest levels. And you know we have to realize that we're a much larger country than we used to be. So again you get into this debate versus relative, versus absolute size, but certainly in absolute size it is the largest that we've ever had.

Cara Stern: 3:58

Do we know where people are coming from? For permanent residency versus for temporary immigration? Is there a difference of where they're coming from?

Mike Moffatt: 4:06

Yeah, there's a lot of. You know there's differences between the groups, that for permanent residency they tend to be older, it tends to be a wider distribution of countries, whereas because a lot of our non-permanent residency is on the international student side, they tend to skew younger and they tend to skew from a couple different countries India and China. So there are, you know, big differences between the two. Again, on immigration, you know that sort of median age tends to be 28 and 29. But you know you get some 30-year-olds and some 83-year-olds and some 3-year-olds, whereas on the non-permanent side it tends to be more clustered around people, you know, late teenage or early 20s and so on.

Cara Stern: 4:54

Why do we need constant growth into the country?

Mike Moffatt: 4:58

Well, we don't necessarily need constant growth, and I would say, in fact, our issue is that we've had non constant growth, that our population growth has been all over the place in recent years and it's made it really difficult to plan. So I actually think having some more certainty helps with planning. I think over the last few years we've seen the challenges we have when our population growth rates are all over the place and we really can't make sure that we have not just enough housing but enough schools and healthcare and so on to keep track of that.

Cara Stern: 5:34

Yeah, I hear that a lot these days, things like people talking about how we have so many new people in this country, we don't have enough housing for people already here and we don't have enough family doctors, and so I hear people saying why don't we just kind of pause it or at least lower immigration levels temporarily until we kind of get that under control and then go back up to opening our doors as wide as they've been? I know that there are valid concerns about housing and medicine. Of course these are real things. But what would happen if you were to sort of freeze immigration temporarily while we try to get that under control?

Mike Moffatt: 6:10

Yeah, so a couple of things. So again, I hear this a lot. I think there's some challenges to this question. But first of all, I think it conflates population growth with immigration. Right, and those are two different things.

Mike Moffatt: 6:20

But I do think there is a reasonable argument to have about how high immigration targets should be and so on. But we also have to really like the healthcare one, I think is a prime example, because immigration affects both the demand and supply side of healthcare. And if we look at immigration to Canada, it's an awful lot of personal support, workers and nurses and so on. So you get that kind of challenge where you say, okay, yeah, if we're ratcheting down population growth, maybe we don't need to expand our healthcare system as much. But who's going to work in our long term care facilities and questions like that? So I do again, I think it's a reasonable debate to have about how high the cap should be. There's nothing magic about 500,000. But overall we have to sort of recognize that the newcomers to Canada are, you know, both affected demand side and the supply side of whether it be housing or education or healthcare or so on.

Cara Stern: 7:20

But of course we know that people coming here as personal support workers, for example, that might be one person in the family that may come with a few other people who all need healthcare and they all need a place to live. Does it balance out in your mind?

Mike Moffatt: 7:34

Well, I think, if the system is well designed, that it should. And I do think there are questions about, you know, canada's point system for immigration and, you know, are we bringing in enough of this group and enough of that group? Are we bringing in enough workers versus, you know, younger kids versus older, like? I think those are all useful discussions to have, but again, we should recognize that, you know, the bulk of our immigration tends to be people between, like, the ages of 25 and 40. Right, it's a lot of your kind of young, talented labor force and it is a challenge to fill these roles without those newcomers.

Cara Stern: 8:18

Is there a way like looking at this as an economist? Can you determine like an optimal number of immigrants that should be in the country that is, like a sustainable number that makes sense? Is there an optimal number?

Mike Moffatt: 8:29

Unfortunately no, and I think that's one of the that's what makes this such a such a debate, right, that's, you know there are any number of things that you look at. You go OK, well, optimal for what? Optimal for the health care system, the housing system, you know, optimal for Canadian culture? So, so it really it really depends on, you know, not just the number, but you know, the talent and the skills of the people being brought in. You know what it, what they contribute to Canadian culture. So it gets very, very messy very, very fast.

Mike Moffatt: 9:01

But I do think there are, you know, real concerns out there that we're not, you know, linking properly, linking immigration to the other things we need. And there's also issues around planning. I actually don't think this gets enough attention. That you know how we've traditionally, over the last few years, set our immigration targets is basically, they get announced in November for whatever the next year is. So that's a challenge in planning. If we're go OK, you know we're going to find out, you know, within two months notice, what those immigration targets are going to be. You know, I do think we need to look at having longer term planning. You know maybe five and 10 year plans and so on, you know, which would help us better align these things?

Mike Moffatt: 9:46

So I find oftentimes the number itself. It gets way too much attention because it's easy to understand, but all of those nuances about OK, well, how much notice do we give about the number? You know what is our system for determining, you know which 500,000 or 300,000 people will be, and so on. I mean, those are the, you know, the really important questions that determine whether or not our immigration system is working. But they tend to. They're complex, so you know they don't make for as good a discussion.

Cara Stern: 10:22

One of the most shocking things since I started covering this area as a journalist is that I didn't realize the Ministry of Immigration and the Ministry of Housing don't seem to talk to each other. At least they haven't historically. I hope they are now. It seems like they might be a little bit more now, but those numbers were never linked. Like how does that make sense? Why did that happen?

Mike Moffatt: 10:41

Yeah, I think overall that we make policy in silos and this is not just an immigration problem, it's just a general problem. And here's where I think that longer term planning can come into place right, that if we had sort of 10-year immigration targets with yearly targets, then we can make sure not just that there's enough housing but enough healthcare and education and so on. I think that would go a long way to it, even if they do talk to each other and the immigration department said in November okay, by the way, we're going to be increasing it by this much, that's not enough time to build houses and schools and roads and so on. So it is a real problem and I would like to see the federal government come up with longer term plans. You recognize that we are in a democracy. Governments will change, new governments will come in to have different priorities. That's all fine, but we need to as much as possible, we need to plan these things out better.

Cara Stern: 11:46

It feels a little bit like that they must have known, they should have been able to forecast that housing prices would get out of control, given population growth. It feels a little bit like they must be able to forecast that and they did it anyways, for economic reasons. Do you feel that way?

Mike Moffatt: 12:05

I do a little bit Again where I think their failure to forecast is on the non-permanent side. Right, because that's where the growth has been and has completely caught the federal government off guard. Statistics Canada does population forecasting every so often. They haven't updated their forecast since August 2022 and they're just like laughably out of date. Right, they ended up massively under forecasting.

Cara Stern: 12:31

Yeah, I remember that's something I learned from you about how they didn't even seem to know how many people were coming into the country on student visas, right, yeah, absolutely, and they weren't able to forecast things and some of it is hard to forecast.

Mike Moffatt: 12:45

We do have an increased number of refugees from Ukraine, right? So I don't think you can fault the federal government for not being able to properly predict the Russian invasion and things like that. Events are going to happen, that's fine. But, yeah, overall, the federal government's done an absolutely lousy job at doing population forecasts. So I don't think they saw this coming. I do think they understand the linkages between immigration targets and housing. I mean, that became clear in an access to information request that a reporter did recently. But I don't really I don't think they saw this population growth happening and I think they were caught off guard by it.

Cara Stern: 13:34

Is it possible to tie it to housing starts, tie immigration levels, or really population growth, to housing starts, or is it always going to be the case that people are coming in here faster than we can possibly get things built?

Mike Moffatt: 13:47

I think you can and I think this is where this long term planning comes in that if we're, if we're tying, you know, announcing these immigration targets, you know, two months before the next year, no, I don't think they can really be linked, or at least in any kind of meaningful way. You know, they would just be saying, ok, well, this is what we think, housing starts is going to be next year and then this is going to tie our immigration to that. But if we did longer term planning, then we could start to link these things together much, much better. So so that's again, it's all this kind of long termism versus short termism, and I guess, like, if this discussion has a theme, it's that all of these decisions that were made are not only just made in silos but they're, you know, really ultra short term focus. There's been a complete lack of any kind of long term, long term planning, and I think it's causing us all kinds of difficulties.

Cara Stern: 14:44

That's all for us today on the Missing Middle. Thanks so much for watching and listening and thanks, as always, to our amazing producer, meredith Martin.

Mike Moffatt: 14:50

Please like, subscribe or leave a comment. We'd absolutely love to hear from you.

Cara Stern: 14:55

And we'll see you next time.