Canada struggles to shape an immigration policy that brings in the right people for the right jobs – at the right time

By Alan M. Field

Part 2 of 2

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According to Martin Collacott, Chairman of the policy advisory board of the Centre for Immigration Policy Reform, the federal government has in effect given notice that it will not bring in all of the 165,000 people who are currently in the backlog. What it is saying is that “we can pick and choose people, and give priority to skilled immigrants.” The government has also issued a moratorium on new applications for parents and grandparents. “Kenney is quite astute,” said Mr. Collacott. “He is our best immigration minister.” Other recent initiatives include the following:

• Citizenship and Immigration Canada proposed that it will reduce the work experience requirement for eligible temporary foreign workers applying to stay permanently in Canada under the Canadian Experience Class (CEC) program. This move would make it easier for skilled tradespersons currently working in Canada to transition to permanent residence, since their work activities are often project-based and may be seasonal. Currently, under the temporary foreign worker stream of the CEC program, an applicant must have acquired 24 months of full-time work experience in Canada within the previous 36 months. The proposed regulatory changes would reduce that requirement to 12 months of work experience. Launched in 2008, the CEC program offers a route to permanent residence – and eventual citizenship – for international foreign students and temporary foreign workers who have strong skills and Canadian work experience.

• As of July 1, 2012, most applicants for semi- and low-skilled occupations under the Provincial Nominee Program will be required to take a language proficiency test and obtain, in the case of English, a minimum grade of “CLB 4”, which confirms “basic proficiency” in all four categories: listening, speaking, reading and writing. (An equivalent French-language test applies to French-speaking applicants.) Applicants must prove their results in a language test administered by a designated testing agency.

• On April 18, 2012, Minister Kenney announced that the government will conduct consultations with stakeholders about whether to create a new and specialized program to attract immigrant entrepreneurs. “Our government’s top priority remains jobs, growth and long-term prosperity,” Mr. Kenney said. “Canada cannot afford to lose in the competition for foreign entrepreneurs among immigrant-receiving countries. We need to proactively target a new type of immigrant entrepreneur who has the potential to build innovative companies that can compete on a global scale and create jobs for Canadians.” For his part, Mr. Collacott suggested that another way to improve the availability of qualified labour would be to encourage veteran Canadian workers (whether tradespeople or professionals) to keep working beyond the age of 65. Such a policy, noted Mr. Collacott, could be especially effective now that the Canadian economy is becoming more dependent on knowledge-intensive skills that do not necessarily diminish with greater age.

Meanwhile, the Alberta Coalition for Action on Labour Shortages has called for the following steps to address some of the same issues: changing the point system of the Federal Skilled Worker Program (FSWP) to place greater emphasis on labour demand and validated employment offers; expanding opportunities to transition temporary workers to permanent immigrants such as the Provincial Immigrant Nominee Program and the Canadian Experience Class; changing National Occupation Codes, used in both the permanent and temporary streams, to reflect employer needs and recognize a broader range of existing skilled positions; and reforming Temporary Foreign Worker processes to recognize employer pre-qualification, and streamline the application and approval process.

These efforts are being closely monitored by the business community, which considers immigration reform an essential foundation for Canada’s future prosperity. Immigration reform plays a major role in the Canadian Chamber of Commerce’s 10-point national plan aimed “to regain Canada’s competitive edge” in the global economy.

Difficulties in measuring progress in immigration reform

Plotting on paper the course of immigration reform for Canada will be an easier task than actually implementing policy changes that address the specific needs of various sectors of the Canadian economy. Even with the best intentions, the Canadian immigration system could “have difficulty responding” to labour gaps and shortages for a number of reasons, according to the report, Making It in Canada: Immigration Outcomes and Policies, by Garnett Picot and Arthur Sweetman. For one thing, “obtaining reliable information on the magnitude of occupational imbalances, in either the short term or the longer term, is difficult,” write the researchers. Moreover, although approaches to forecasting occupational labour demand can provide broad guidelines about coming shortages, such efforts usually fail to “accurately forecast future [labour] demand for specific professions.” And while observations made on the ground by employers and local economists can help to assess short-term demand, “such demand can change quickly with the business cycle.” More distressingly, “boom and bust periods are associated with the commodity based industries, in particular, where many of the shortages appear,” such as the energy and mining sectors, which are vital to the health of Canadian economy, added Mr. Picot and Mr. Sweetman.

Beyond that, neither professional forecasting nor on-the-ground observations and analysis can “account for other labour adjustments that tend to reduce shortages, such as capital investments, occupational wage increases, worker mobility, occupational mobility and training that allows existing workers to move into shortage occupations,” said Mr. Picot and Mr. Sweetman. Political considerations will also continue to intrude on the implementation of policy, despite all the best efforts to minimize them. Although Canadian firms “can lay workers off at the end of a boom or abandon their obligations as they go into bankruptcy, the nation cannot ‘lay off’ new citizens. The planning horizons and risk profiles of business and government differ dramatically,” wrote Mr. Picot and Mr. Sweetman.

Another fundamental challenge for policy-makers is that many occupational labour shortages are transitory, but the process of admitting immigrants into Canada is time-consuming. Thus, federal and provincial governments will continue to “have difficulty using immigration to meet occupational targets,” explained Mr. Picot and Mr. Sweetman. A policy aimed at meeting short-term economic needs could turn out to be way off target by the time many of the immigrants involved in that initiative are actually working in Canada. Can provincial governments do a better job of forecasting than federal agencies? In the early 2000s, some policy-makers believed that provincial governments were better positioned to target immigrants from specific categories of professionals because provincial bureaucrats were closer to local labour markets and their needs. But Manitoba’s Provincial Nominee System, after initially trying to target specific occupational shortages in that province, quickly abandoned that route after discovering that labour markets were changing too rapidly to make accurate forecasts.

Other new initiatives, such as Minister Kinney’s suggestion that Canada encourage immigration by foreign entrepreneurs, could also turn out to be very tricky to implement. Assuming that this idea meets with approval from business and educational institutions, how exactly would it work? Which government bureaucrats would be held responsible for deciding which foreign entrepreneurs have ideas worthy of encouraging by granting them Canadian citizenship? What are the odds that Canadian bureaucrats would make the right decisions about which entrepreneurs stand the best chance of success in Canada? How far along would an entrepreneurial idea have progressed in order to qualify its inventor for rights to citizenship? Would entrepreneurs be deprived of citizenship rights if the companies they founded in Canada failed to meet financial benchmarks – or went bankrupt? And so on … The questions are endless.

Conflicts of economic and political interest will continue to muddy the waters of immigration reform. On the one hand, said Mr. Collacott, employers’ organizations understandably want to encourage the immigration of more and more workers who can join the Canadian workforce without benefit of further training. Ideally, such workers have specialized, high-demand skills, rather than diplomas that are impressive when hung on the wall but useless in the job market. When those kinds of workers become available, wage rates are less likely to rise in that sector, and companies will spend less on training and/or re-training immigrants. Powerful lobbies of immigration lawyers, and non-governmental organizations that receive governmental funds to train immigrants, also have a vested interest in not impeding the flow of immigrants, noted Mr. Collacott.

Recent immigrants to Canada are not necessarily eager to change the way things work because they may fear that a greater influx of new workers will suppress wage rates. Canadian trade unions, which were long reluctant to support increased immigration during the 1990s, have become very supportive of higher immigration lately, added Mr. Collacott. The reason: The percentage of unionized workers in the Canadian private-sector has declined, so trade unions view increasing immigration as an effective way to boost membership. For such unionists, the number-one priority became the health of the unions – measured by the number of members – rather than the strength of the economy, added Mr. Collacott.

Immigration is not a simple “right versus left issue,” when it comes to political calculations. On both sides of the Canadian political parliamentary aisle, there are some people who favour a stronger flow of immigration and there are others who favour the opposite approach. For example, some on the left side of the aisle support a freer flow of immigrants as a more politically correct measure, while some employers favour such a flow because they need to meet labour shortages.

General principles worth pursuing in immigration reform

With so many complexities to take into account, it is useful for policy-makers and stakeholders to identify some general principles to follow when enacting immigration reform. Testifying before the Canadian Parliament’s Standing Committee on Citizenship and Immigration last October, Herbert Grubel, Fraser Institute Senior Fellow and co-author of the study, Fiscal Transfers to Immigrants in Canada: Responding to Critics and a Revised Estimate, suggested the “moral and political criteria we should adopt” when pursuing reforms. “First, let us set policies so that immigrants benefit Canada, not so that Canada benefits immigrants; second, let us use our country’s desire to help foreigners only after we have provided adequately for the many of our compatriots who need health care, caregivers, housing, special education and so on. If we want to contribute to the welfare of foreigners, let us continue to admit genuine refugees and send foreign aid to the needy abroad.”

Beyond that, Mr. Grubel added, “We should adopt policies that bring into Canada only immigrants who pay taxes high enough or have access to funds that match the costs they impose on our social programs.” As for the current backlog of applicants, he added, “Let me present my radical proposal: Simply pass a law that repeals the existing legislation, promising that anyone who pays a fee is guaranteed consideration for an immigrant visa. Dissolve the existing backlog by sending each applicant a letter saying, in diplomatic language of course, that ‘Parliament has decided that Canada is no longer obligated to consider your application; attached to this letter is a refund of the fee you have paid, including interest.’” In conclusion, Mr. Grubel said, “Let market signals – not politicians, technocrats and vested interests – determine who should be admitted and how many immigrants should enter Canada annually. Relying on market signals in the operation of the economy has served Canadians and the rest of the world well; it should do so for the selection of immigrants.”

Matching the right workers with the right jobs will never become an easy task. Finding the right foreign workers will involve establishing a well-calibrated balance between encouraging immigrants who are skilled professionals and those who are workers adept at using shovels to fill jobs that are in great demand and pay relatively well – even if they don’t require higher education. In any case, hard policy choices must be made soon if Canada is going to come even close to building the workforce it needs to be globally competitive in the years ahead. As Warren Everson, The Canadian Chamber of Commerce’s Senior Vice-President for Policy, noted, the association’s corporate members “want and expect a sense of urgency and impatience about policy. Choices have to be made, and as a nation we can’t dawdle. There is an appetite for decisive action at all levels of government.”