With any mention of immigration, the issue of racism is never far behind.
A Statistics Canada study that shows the tendency of recent immigrants to send money back to their homelands is a case in point. Reaction on public forums – the web certainly allows us to contribute our two cents’ worth, early and often – followed a predictable pattern: those opposed to immigration patterns seized on the study to condemn the practice, followed by a host of others playing the racism card.
Canadians remit about $5 billion overseas each year. While not insubstantial, the figure represents a small piece of the economy. In fact, from an economic perspective, the practice is no different – though much smaller – than what happens when we import goods from other countries, spend money on a European vacation or nip over the border to Buffalo on a shopping spree: Canadian dollars leave the country.
That particular economic argument is moot. Undoubtedly, much of the backlash is related to race, as immigrants from the Philippines and Haiti are the most likely to send money home. The study found the poorer the country of origin, the greater the chance of remittance.
By the numbers, roughly four in 10 immigrants who arrived in Canada during 2000/2001 sent money to family or friends abroad at least once during their first four years in the country.
Over the entire period, about 41 per cent of immigrants sent money home at least once. Within six to 24 months of landing, 23 per cent of immigrants had sent remittances to their home country; within two to four years after landing, about 29 per cent had done so.
Among those who sent money home, the average amount was $2,500 in the first period, and $2,900 in the second period.
The likelihood of immigrants remitting depended on three additional factors: their income, family obligations in Canada and abroad and demographics.
According to World Bank figures for 2004, remittances represent an important source of revenue for people in developing countries. They accounted for about 20 to 30 per cent of gross domestic product (GDP) in countries such as Haiti, Lesotho and Jordan, and for about 10 to 19 per cent in several others, such as Jamaica, the Philippines and the Dominican Republic.
In a sense, remittances by immigrants can be seen as a form of foreign aid. Probably a superior form, as the money goes directly to those in need, rather than siphoned off by agencies and corrupt government officials.
If we view international development as a good thing, then the practice is one we can support.
Yes, there are economic impacts here of sending dollars offshore. As noted, the amounts involved are miniscule by comparison to imports and direct foreign investment. There is certainly a need to make sure money isn’t flowing to groups supporting terrorism or domestic warfare, but that, too, is a minor consideration. Likewise, there’s no issue with people who work here using their after-tax dollars as they please – providing the money comes from employment income, not government assistance.
No, much of the criticism boils down to “them” sending “our” money to “those people.”
Overt racism aside, however, Canadians should be questioning immigration policies and their impact on our society. At that level of discussion, economics, demographics and pace of change are all valid topics.
Much of the growth we’re seeing in the country – largely in Toronto and southwestern Ontario, including right here in Waterloo Region – is fueled by policies dictating we need immigrants to offset declining birthrates and an aging population: we need more taxpayers to support increasing numbers of retirees.
Our solution has come at a cost, however.
A 2005 study by Herbert Grubel, professor emeritus at Vancouver’s Simon Fraser University, shows a sharp decline in the economic performance of recent immigrants to Canada since 1990.
The paper cites official statistics showing that recent immigrants, on average, have lower incomes than comparable Canadians even after 10 years’ residence in Canada. As a result of these lower incomes, Canada’s progressive income tax structure and the universal availability of government benefits have resulted in substantial transfers to these immigrants. Grubel estimates the transfer to immigrants who arrived between 1990 and 2002 is approximately $18.3 billion every year, based on 2002 data.
Among the reasons for the low incomes of recent immigrants, Grubel cites the fact that there are large numbers who bypass the government screening process designed to allow entry only to applicants likely to be economically successful. Those bypassing the screens include large numbers of family members and refugees, many of whom have low earnings capacity.
It’s with those figures, not country of origin or racial issues that we have to look at the system. There’s no room for the race card or politically correct posturing at the table.