Tuesday, 27 May 2014

OECD Report: Immigrants Bring Little Or No Overall Economic Benefit

A recent OECD study of leading economies found that immigration of the past 50 years has been of little or no benefit to them, being of neutral benefit at best.  Immigrants since 1964 - roughly the time Canada's immigration system began to change into the "compassionate and fair" points-based system we have today - have proven to be no "panacea of economic growth."

However, the same study found that immigrants have a neutral effect on the tax base as well with their contributions to it and use of tax supported benefits leveling out.  A Fraser Institute study begs to differ with the OECD on this point in the particular case of Canada.  In any case I'll concede to the OECD's conclusion that immigrants haven't been a drain on taxes here in Canada. But they're not net contributors either.

If immigrants are not contributing to economic growth in any significant way while at the same time not contributing to the tax base in any significant way then what's the point of allowing immigrants into the country in the first place?  In this situation it's immigration for immigration's sake.

Critics point out that most of the benefits, if not all the benefits, of the immigration system are enjoyed by the immigrants themselves since the vast majority of them come from societies of low consumption and poverty and move to a society of high consumption and affluence.  Even if they live in poverty here in Canada most of them are still better of here than where they came from.  Canada's immigration system, then, is just an extension of the foreign aid program and immigrants are, for the most part, just charity cases.  It's The Blindside as immigration policy.  We may be powerless to change the impoverished societies from whence immigrants come from but we can at least help a few of them by helping them escape those societies by bringing them here.

As for Canadians we get almost nothing beneficial out of this arrangement aside from the opportunity to pat ourselves on the back as a sign that we are the most civilized and compassionate people on the planet.  And the reward is to experience the negative effects of it especially in our cities.

That being the case immigrants aren't the ones making a sacrifice when they move here since for them the payoff in the end can exceed the effort.  They're making an investment and like all investors they're taking a risk in the blue chip stock that is Canada.  It's Canadians who must sacrifice to accommodate them and suffer the costs or reap the gains of what they contribute to society and the economy.  And it appears what they contribute is nearly nothing of significance so why should we support a mass immigration system when clearly it's not in our interest to do so?

9 comments:

Anonymous said...

Ontario now requires 50 billion to update the transit system to accommodate it's population growth which has come mostly from immigration. This is going to increase taxes for every Ontarian. It is so demoralizing watching Ontario actively cheer for the culture replacement that the generational Canadians are forced to pay for it through increased taxes. Immigration of the last 30 years has lowered wages, increased our taxes and has been breaking down our unity. I can't see anything good from mass immigration and it needs to stop. It is utterly unfair to destroy our identity, unity, and ask us to pay for it.

Alain said...

I also beg to differ about the cost being neutral. Once you calculate the use of numerous social programs, not just welfare but all the others including translation service and the cost to law enforcement due to accepting those hostile to their host country it is anything but neutral. These costs are at both the federal and provincial level, and as a result of all this we now have a thriving immigrant industry benefiting from this gravy train. In spite of the name immigrant industry, it is not composed only of immigrants or new Canadians.

Anonymous said...

In four decades, we've ruined a near 98% homogeneous White country (now reduced to 77%) whose previous model was working well until we foolishly opened the floodgates to third-world immigrants.

It seems history is repeating itself:

http://www.youtube.com/watch?v=VmrfqU7JLSk

Anonymous said...

Pax, just a heads-up if you're not aware.

A new Canadian website operated by Prof. Ricardo Duchesne (amongst others) are promoting Euro-Canadian interests.

One post says in part: " ... We know that sooner or later a Google Alert will drop our little organization into their net like a quail about to be savaged by a group of cats. And yet there is still peace and quiet here in the dawn hours at the CEC."

http://www.eurocanadian.ca/

Anonymous said...

"However, the same study found that immigrants have a neutral effect on the tax base as well with their contributions to it and use of tax supported benefits leveling out. A Fraser Institute study begs to differ with the OECD on this point in the particular case of Canada. In any case I'll concede to the OECD's conclusion that immigrants haven't been a drain on taxes here in Canada. But they're not net contributors either."

Pax, if you look at where the OECD report is getting its numbers, which is "The fiscal impact of immigration in OECD countries" by Liebig and Mo in International Migration Outlook 2013, you'll see that the estimated net fiscal impact of immigrants in Canada, expressed as a percentage of the GDP, is actually negative, at -0.06% (see Table 3.7). Immigrants are also overrepresented among recipients of social assistance in Canada, at 1.2 (Table 3.6). In other words, immigrants are a drain on the Canadian economy, but not by much.

The report says this about the Fraser Institute studies:

For Canada, Grubel (2005) found for the immigrant cohort that entered in 1990 a negative net fiscal contribution of CAD 6 294 in 2000 for each immigrant; a later study by Grubel and Grady (2011) arrived at similar results for the migrants who entered between 1987 and 2004 (a net burden of CAD 6 051; or about 1.5% of GDP in the fiscal year 2005/06). However, Javdani and Pendakur (2011) challenged these findings, demonstrating that with a more precise accounting and somewhat more realistic assumptions one can drastically alter the results by Grubel and Grady (2011). Their estimate is a negative net contribution of about CAD 450 per migrant.

They accept the methodologically flawed Javdani and Pendakur study as more legitimate than the Fraser Institute's findings. They also don't mention Grubel and Grady's rebuttals of Javdani and Pendakur. Consequently, I would take the OECD minimization of immigrant fiscal impact in Canada with a grain of salt. Don't concede anything.

PaxCanadiana said...

The Javdani and Pendakur study just moved the goal posts. Even then they still conclude that immigrants are costing us more than they're worth begging us to ask what's the point of immigration?

I only conceded to the OECD conclusion for the sake of the post to point out that immigrants are not net tax contributors either.

So immigrants provide no overall economic benefit and no tax benefit. So what are they good for, again?

PaxCanadiana said...

A new Canadian website operated by Prof. Ricardo Duchesne (amongst others) are promoting Euro-Canadian interests.

I'll add it as link.

I understand Prof. Ricardo Duchesne is from Puerto Rico. Being am immigrant I can see how that will disarm his detractors a little so I'm going to guess they'll play the white supremacist angle.

Anonymous said...

They are good for keeping educated white women who speak english out of work like me.

Anonymous said...

Why they do this is related to the banking system.

Canada has an inflation target. This is effectively a growth target. When inflation continues, it makes sense to spend. When deflation occurs, it makes sense to save (which scares economists).

Continuous growth requires more resources, including more workers. Educated, intelligent people tend to have fewer children. So, to maintain the growth targets, they want more immigrants. It's not so much about being a net positive or negative overall, rather, the goal is to have population growth keep up with economic growth.

If you want to fix the immigration system, the banking system must first be fixed. Otherwise, when the growth stops, our economic system is crippled, and we pay a different price.