As the United States continues to propose restrictions on immigration and quotas on refugees, Canada can benefit from the influx of foreign-born labor.
One of President Donald Trump’s key campaign promises, immigration reform, could have an unexpected consequence: Canadian growth. While Trump is continuing to fight for his travel ban, which would block immigration from six majority-Muslim countries, Canada is in a unique position to bolster its economy while adding to its ethnocultural diversity.
Differing Immigration Systems
The first aspect to understanding the growth Canada receives from immigrants is in the immigration systems of each country. Canada admits immigrants on a points-based system which measures the merit of those who apply for entry. This means that foreigners immigrating into Canada need a minimum amount of points which are based on an individual’s education, language, employment experience, age, arranged employment, and adaptability, with the purpose of ensuring a successful transition for first-generation immigrants.
America’s immigration system differs drastically. The majority of immigrants given visas are done so on a family-based system, meaning preference is given to spouses, underage children, and parents of current U.S. citizens.
According to the American Immigration Council, family-based immigrants made up 64 percent of all lawful permanent residents. While the American immigration system contains a provision similar to the Canadian point-based system (i.e. employment-based immigration), this only made up 15 percent of all new legal permanent residents in 2014. It is important to note that Trump has endorsed apoints-based system , citing Canada as an example of success. However, this would be done in conjunction with immigration cuts and lowered quotas.
Importance of Immigration in the Welfare State
The population of Canada is aging, fast. While of the G7 countries only the U.S. has a lower percentage of the population over 65 years old, that demographic is growing fast in Canada. Statistics Canada estimates that by 2031, almost a quarter of the population will be 65 or older. This is a problem in the welfare state because, in a healthy economy, the retirement age is 65. No country can handle the economic burden that comes with a quarter of the population being retired. This requires an increase in the laboring population, which can be done either through high fertility rates, lower levels of retirement at 65, or by immigrants of working age.
Nationwide fertility rates are unpredictable and difficult to control, and higher rates of the elderly population in the workforce is seen as an unacceptable option to many. This makes immigrants the most favorable means of increasing the labor force, and immigration comes with added economic benefits separate of increased labor. This benefit is derived from the increased ethnic and cultural diversity that immigrants bring.
Analysis by the Centre for International Governance Innovation has determined that, across all sectors of business, a one percent increase in ethnocultural diversity yielded a 2.4 percent increase in revenue and a 0.5 percent increase in productivity. While this can be explained through Canada’s merit-based system, which targets younger, more qualified workers, this could also be attributed to the fact that immigration not only increases visible diversity, but also the diversity of ideas and problem-solving methods that come from different cultures.
With Trump attempting to decrease quotas on immigrants and refugees by 50 percent, this is Canada’s opportunity to benefit from America’s mishandled immigration policy and foster economic growth in a multicultural world.