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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