Introduction to Economic and Urban Issues in Canadian Immigration Policy

Article excerpt

Abstract

This introduction highlights five important aspects of the research literature on the economics of Canadian immigration with a particular focus on cities, and introduces the collection of papers that follows in this special issue. Explaining the significant decline in the economic circumstances of recent immigrants has been, and will continue to be, a central focus of research and policy attention. We address this issue in light of the timing of immigrant flows relative to the business cycle, the increasing concentration of immigrants in urban regions and the changes in the immigrant selection process that have a bearing on the rate of economic integration of new arrivals. We then document the decline in labour market outcomes and, finally, consider selected broad implications of immigration for the Canadian economy.

Keywords: Immigrants, Canada, Economic Integration, Earnings, Cities

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Canada is changing and nowhere is this more apparent than in the composition of its population. According to the 2001 Census, the 5.4 million foreign-born in Canada comprise 18.4% of the total population, which is the highest proportion since 1931 (Statistics Canada, 2003). This current high-water mark follows a period with historically high immigration rates, similar to that in 1931. Moreover, the absolute number of immigrants arriving in Canada is higher than it has ever been. Like the first few decades of the 20th century, immigration is currently increasing Canada's cultural diversity and its population base. This has important economic implications which are the focus here.

Three aspects of recent immigration are particularly striking. The first is its urban character. Unlike the immigration in earlier decades, immigrants today are primarily settling in larger cities rather than populating the rural West. Of the 2.2 million immigrants (those not born in Canada) who arrived during the 1990s, 94% chose to settle in one of Canada's Census Metropolitan Areas (CMAs). In comparison, only 64% of the total population, which includes the same recent immigrants, live in a CMA. Further, 73% of those who arrived in the 1990s live in Toronto, Vancouver or Montreal, and within these three urban areas immigrants are also heavily concentrated.

A second issue is that the demographic characteristics of immigrants has changed, in many cases directly in response to shifts in policy priorities. The relative emphasis placed on different entry categories (such as economically-assessed, family and refugee class), and variations in the points system for selecting skilled workers, have had an important bearing upon this demographic change and the likelihood of economic success among new immigrants. On the one hand, the changing composition of immigrants by country of source has resulted in a greater proportion reporting neither official language as mother tongue and self-identifying as "visible minorities" with the related possibility that new immigrants face greater discrimination in the labour market; on the other hand, increases in such factors as educational attainment have increased aspects of recent immigrants' human capital endowment.

Third, and quite crucially, over the last two decades there has been a substantial deterioration in immigrant labour market outcomes. Whereas the mean earnings of previous cohorts fairly quickly converged to, or exceeded, that of their Canadian-born counterparts, there is clear evidence that this is not the case for recent arrivals. This has implications not only for the immigrant's own well being but also for the Canadian economy as a whole. For instance, recent immigrants are experiencing lower labour force participation rates, higher rates of unemployment and lower earnings, and this may impose a greater burden on social programs. For policymakers this raises questions about the role of immigration in prompting economic growth, and the implications for government transfer programs and tax revenues. …