Immigrants costing taxpayers $20 billion — study

By Jasminee Sahoye


A recent study states that immigrants who arrived in Canada since 1986 are costing Canadian taxpayers about $20 billion annually because they earn less and pay less taxes than they receive in benefits from government spending.

The study, Canada’s Immigrant Selection Policies, published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank also finds that the country’s immigrant selection process should rely more on the employment needs of the private sector and pre-arranged contracts for work to ensure new immigrants will prosper and succeed economically.

“Recent immigrants who arrived since 1986 earn less and pay less tax than they receive in benefits from government spending. As a result, they are costing Canadian taxpayers about $20 billion annually,” Herbert Grubel, senior fellow, Fraser Institute said.

Grubel, who is also an economics professor (emeritus) with Simon Fraser University, notes that the current federal government has recognized that these immigrants are not doing as well economically as those who arrived earlier and so it has made a start at reforming the immigration selection process.

“New policies introduced by the government such as more efficient selection processes, better information about candidate qualifications, speeding up the processing of refugee claims, reducing opportunities for fraud, and increasing the financial responsibility of sponsors of parents and grandparents will reduce the burden those groups impose on government services,” Grubel said.

“But the success will depend on enforcement of the new rules.”

Canada selects the largest proportion of its immigrants using an objective points system that reflects the candidates’ education, work experience, language competence, and other indicators that are linked with higher earnings. Individuals selected on this basis are called “principal immigrants” who in 2011 numbered 64,397, representing only 25.8 per cent of all 248,744 immigrants that year. The principal immigrants were accompanied by their dependants (spouses and underage children) numbering 91,724. The government refers to the principal immigrants and their dependants as “economic immigrants” who in 2011 numbered 156,121 and represented 62.8 per cent of all immigrants admitted.

To fully eliminate the current fiscal burden, Grubel recommends abandoning the points system and replacing it with pre-arranged contracts for work in Canada as main selection criterion for economic immigrants.