I have just been to a fascinating presentation and panel discussion, organized by the Harris Centre and Statistics Canada, about immigration (with focus on Newfoundland & Labrador).
From the panel discussion there emerged a few key points:
- Canada needs immigration because its population is aging and because, overall, Canada is an underpopulated country.
- Immigrants, typically young(er), healthier and more skilled, can help Canada out of its current housing (e.g. new construction workers, trades people…), infrastructure, and health-care (e.g. new doctors, nurses…) crises.
- Immigration can also address general labour shortages felt by many Canadian companies.
BUT
- The immigration process itself is a shambles. Once accepted, immigrants face huge hurdles (e.g. transport: previous driving experience is ignored for many immigrants, leading to astronomical insurance costs; nob-recognition of credentials; few social networks…).
- It is complicated and expensive for employers (who need to understand the shambolic immigration process) to employ immigrants.
- There is need for basic services, such as affordable daycare, to allow all people (immigrants included) to work and raise families.
- Even though immigration is part of the solution for the construction, healthcare and general labour crises, in the immediate housing is a major issue, not helped by rapid influxes of people.
All panelists mentioned the crises in housing, construction and healthcare, and the need for more investment. They called for ‘holistic’ approaches by federal and provincial institutions to provide services, housing, improve the immigration process, etc…
Where will the money come from for ‘holistic’ approaches?
It is unfortunate that we are living in an era where lowering taxes is presented as an obvious solution to all problems, and where tax avoidance is considered clever.
The question that was not addressed, but that hovered over the panel discussion, is where will the money come from to finance these ‘holistic’ approaches?
It would make sense to raise taxes – particularly corporate and capital gains taxes – to pay for much-needed renewals of Canada’s health system, its infrastructure and its housing. After all, corporations rely on these to make money. However, because of capital mobility (they can flee or avoid taxes with far more ease than citizens) there is little likelihood of this happening.
Raising personal income taxes could be a solution, but income taxes are already high in Canada by international standards, and remain high because people are less mobile than capital. Higher taxes on very high incomes would be a start, but – even if these taxes were not avoided – would probably not raise enough money to address the issues.
I left the panel discussion rather depressed: we are faced with a brick wall. A well-informed and exciting panel agrees on the need for sizeable public investment in order to overhaul Canada’s underlying health, infrastructure and housing systems, but the only avenue open to financeit is closed.
Immigration to Canada, which is needed for these overhauls, is currently being reduced because of pressure on the very systems that need overhauling.
Immigration system: dehumanisng and brutal
Which brings me, briefly, to the immigration system itself. Although, as I have written elsewhere, the public service can be innovative and agile, it isn’t always so.
At present, the immigration system is not only inefficient, it is brutal and wasteful. The federal government seems incapable of implementing change – maybe for structural reasons (such as unionization, inter-penetrating regulations that few people understand, archaic and ill-thought-out computer systems), but also because of chronic disinvestment, over the years, as tax cuts have become the prevailing ‘common-sense’. Such cuts – probably on the advice of private consultants– explain the archaic systems…
Even if immigration is a partial solution to some of Canada’s systemic issues, the immigration process itself (and subsequent failure, once immigrants are landed, to recognize credentials, driving experience, etc…) is failing.
Changing the low-tax common-sense?
All in all, a fascinating panel, but one which has raised – at least in my mind – many questions. Underlying these questions is a key issue.
Ever since the early 1980s, it has been ‘common-sense’ to lower taxes. However, it is by taxation that nations raise money to invest in, and maintain, infrastructure, education, day-care, health, immigration – all of which provide long-term benefits.
The current low-tax ‘common-sense’ is untenable. It is not by reducing immigration that the health-care, housing and infrastructure crises will be solved: at best, reducing immigration is a band-aid, temporarily easing accute pressures.
But higher taxes are not a magic bullet either. The government needs to demonstrate it can use these taxes wisely: the current immigration system – itself maybe the result of advice by private consultants – is not the best demonstration.
Richard Shearmur 