media release

SFU economists refute Fraser Institute’s cost of immigration

July 26, 2011
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Contact:
Krishna Pendakur, (c) 604.715.9197, krishna_pendakur@sfu.ca
Mohsen Javdani, 778.241.5393, mjavdani@sfu.ca
Julie Ovenell-Carter, PAMR, 778.782.3210, joc@sfu.ca


Contrary to a recent report by the Fraser Institute conservative think tank, two Simon Fraser University economists have demonstrated that immigrants are not a burden to the economy.

Earlier this year, the Fraser Institute released a study claiming “immigrants on average received an excess of $6,051 in benefits over taxes paid,” for an annual cost of approximately $23 billion.

Krishna Pendakur and Mohsen Javdani recalculated the numbers. Using a wider sample size, corrected calculations, and hard data rather than estimates, their Fiscal Transfers to Immigrants  in Canada study revealed a far lower annual cost of about $450 per immigrant—roughly $2 billion a year.

Says Pendakur: “One of the common issues contested by analysts and policymakers is whether immigrants fully pay—in terms of taxes—for the public services they use.

“We find there is a small shortfall, but fiscal transfers reflect just one aspect of the contribution of immigrants to the Canadian economy.

“There are many others, typically much harder to quantify, but nonetheless important to our economic life such as the effects of immigrants on international trade, the labour market performance of Canadian residents, and the housing market. Still, a credible estimate of the fiscal transfer to immigrants is useful to focus policy debate.”

To that end, says Javdani, policy-makers should advance programs that help immigrants to succeed in the labour force: “If you look at the longer term, these immigrants are going to contribute through earning higher incomes and paying higher taxes.”

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6 comments
This subject needs a further study into the immigrant nuclear families. The majority of them rely in parents and grandparents to care after the child/children. Working parents are able to go to work with a peace of mind knowing that their children are well care. That allows two incomes into the family and create healthy environment for the children who at the same time get grandparents strong moral and family values. Not to mention what happen to children who have no other family members to care for them. Immigrant parents are more attached to grandchildren no counting with the language barriers and other issues they face. I do believe that they contribute greatly into the Canadian system helping the children to grab strong values in a positive way even when their input doesn't show up on the Government financial data. These children are the future of Canada. We are living in a society that struggle to keep its children away from drinking, alcohol, drugs and bullying. We're seen many young lives flush away; they need guidance and that cost money. Obviously, it is a difficult task, but parents and grandparents provide that guidance without a cost keeping parents and children at ease. I do believe that the medical expenses on children and parents will increase if they stop coming, for sure. It is time to think carefully in a decision that looks 'good' but could be disastrous in the end.
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So what you are saying, it is ok to bring people into this country that can contribute very little or nothing to the economy and the tax payers can keep supporting them. And the people that have skills, which is what we need, have to jump through all kind of hoops to get here. Hmm, sounds kind of a$$ backwards to me.
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Immigrants brings with the wealth of knowledge they received at a price which Canada gets it for free.
No cost of education to Engineers,Dentists ,Doctors,pharamcists and teachers etc etc.
calculate that cost into it and Canada is a net gainer economically.
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we came to Canada in 1966 from Scotland and have never collect welfare or unemployment and my wife worked at the minium wage so she paid very little cp contributions she worked for well over 25years yet she only gets about $350.00 less than people get that have never paid a cent into the system .
NOT FAIR
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I find that the system gets totally abused, I am an immigrant myself but before we came we had to sign papers that we would NOT be a burden to the Government, we had to speak either one of the official languages English/French. Now it is all well that grandparents come over to look after the children, so the parents can go to work, however these elders get sick, need medical/go on pension, they don't contribute anything else towards the country, so therefore our system gets drained and our hard worked seniors get second citizens. That is the same for the refugees, they get priority in hospitals, our citizens have to wait for 5 yrs to get the same operations. Canada is generous but we taxpayers pay the price.
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Recent policy change allows grand parents to come to Canada as visitors with a multiple entry visa valid for 10 years is a right answer to the need you mentioned.
As for temporary Foreign workers, they help fill the gap of labor shortage which is so costly to the Canadian economy. Each unfiled job opening, even as seasonal low and low paid job, if allowed to remain unfiled for 9 months of the year will cost the Canadian economy at least over 1 million dollars of lost income and over $125,000 of sales tax revenue shortfall to the government. Whether the shortage is due to a skilled labor shortage or due to the fact that Canadians don't want the job (such is the case of low skilled and low paid job) the result of unfiled job opening is a severe blow to the economy.
Currently visa processing is so slow that even the most legitimate entry visa applications suffer the same fate: long wait time or refusal.
When you need faster service at the post office you can pay extra for that, or when you need your passport on short notice you allowed pay extra for that, why not allowing fast track application when it comes to entry visas?
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