the economic goals of canada's immigration - green, green

8/10/2019 The Economic Goals of Canada's Immigration - Green, Green

1/28

Canadian Public Policy

The Economic Goals of Canada's Immigration Policy: Past and PresentAuthor(s): Alan G. Green and David A. GreenSource: Canadian Public Policy / Analyse de Politiques, Vol. 25, No. 4 (Dec., 1999), pp. 425-451Published by: University of Toronto Presson behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3552422.

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2/28

h e Economic G o a l s

o

Canada s

mmigration

o l i c y

a s t a n d

resent

ALANG.

GREEN

Department

f

Economics

Queen'sUniversity

Kingston,

Ontario

DAVID

A. GREEN

Department

f

Economics

University

f

British

Columbia

Vancouver,

ritishColumbia

Nousexaminons

es

objectifs

6conomiques

e la

politique

ctuelle

d'immigration,

insi

que

e

r61e

de

l'immi-

gration

dans

l'ensemble

des

politiques6conomiques.

Nous

commenqons

ar

decrire

es

objectifs

6cono-

miques

de

la

politique

d'immigration

u coursdu dernier iecle. Nous

decrivons nsuite es

elements

cibles

6conomiquement

ar

a

politique

d'immigration

n les reliantsaux

tendances

istoriques.

inalement,

ous

examinons

n ensemble

d'objectifs

6conomiques

otentiels

pour

a

politiqued'immigration ui

sont

sugge-

r6s

par

'histoire

politique

canadienne.

En

conclusion,

l

apertque

les

objectifs

6conomiques

e devraient

pas constituer'orientationde base de la politiqued'immigration ans un avenir mmediat,card'autres

politiques

mieux

adaptees

euvent

tteindre es

objectifs.

L'immigration

evrait ontinuer

d'8tre

un

6l6ment

de

base

de

notre

structure ociale.

We examine he

economic

goals

of

current

mmigration olicy

and whatrole

immigration

hould

play

in

overall

economic

policy.

We

proceedby

describing

he economic

goals

of

immigration olicy

throughout

this

century.

We

then describecurrent

conomically

argeted

lements

of

immigration

olicy

and

relate

themto

historical rends.

Finally,

we

examinea set of

potential

conomic

goals

for

immigration uggested

by

Canada's

policy

history.

We

conclude hateconomic

goals

should

not

form the

defining

orientation

f

immigration olicy

in

the near uture ince other

policies

are better

ituated o

meet those

goals. Immigra-

tion should

continue

as a

defining

element

n

our social fabric.

INTRODUCTION

Canadian

immigrationolicy

s

currently

he

o-

cus of

considerable ebateand is

in

the

pro-

cess

of

being

reviewed

by

the federal

government.

The

key

question

n

the debate s what

should

be

the

goals

of our

mmigration olicy.

Once

hat

ques-

tion

is

answered,

ther

questions

uch

as

how

to set

the

size and

composition

f

the nflow

should,

hope-

fully,

be easier o answer.A

variety

f

potential

oals

present

hemselves:

umanitarian

oals

suchas

help-

ing

refugees

and

reuniting

amilies

in

Canada,

o-

cial

goals

such as

altering

he

nature

of

Canadian

society,

and

goals

related to

foreign

policy.

For

Canada,

hough,

one of

the main

uses of

immigra-

tion

policy

in the

past

has

been as a

tool

of

eco-

nomic

policy.

In

this

paper,

we examine

the eco-

nomic

goals

of current

mmigration

olicy

and the

CANADIAN

PUBLIC POLICY

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ANALYSE

DE

POLITIQUES,

VOL.

XXV,

NO.

4

1999

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3/28

426

Alan

G.

Green

and David

A.

Green

role

immigration

hould

play

in overall economic

policy.

To do

this,

we

argue

hatone must

consider

current nd

potential

goals

inthe contextof the

his-

toric goals of immigration olicy.This is true,in

part,

because the debate

on current

mmigration

policy

often refers o

historic

precedent

s a source

of

justification

or

particular

ptions.

This

usage

of

historical

rgument

eflects

he fact that or a

policy

such as

immigration

where he

potential

ffects are

both

arge

and

subtle,

he main

basis

or

understand-

ing

its

impact

must

be

in

our own

history.

Thus,

we

believe that

understanding

ow

immigration olicy

has been used

n the

past

s a

necessaryprecursor

o

discussinghow we want o use it in thepresentand

future.

Further,

nowledge

of

past goals

of

immi-

gration

policy

allowsus to understand

hether ur-

rent and

potential

policies

are

radicalshifts from

whathas been deemed

conomically

nd

politically

feasible n the

past.

To the extent hatnew

policies

represent

adical

hanges,arguments

n

their avour

bear a

greater

burden f

proof.

We

proceed

through

our examination

n

three

steps. First,we describethe economicgoals pur-

sued

by immigration olicy

fromthe earliest

years

of this

century

o the

present.

Second,

we

describe

current

conomically argeted

lementsof

immigra-

tion

policy

and relate hemto the

historical rends.

Third,

we

examinea set of

potential

conomic

goals

for

mmigration

olicysuggested y

Canada's

olicy

history.

Our

aim is not

to determinewhether

ach

potentialgoal

is reasonable n

itself but to

decide

whether

mmigration

s the

best meansof

attaining

that

goal.

We

argue,

irst,

hatCanada's

mmigration olicy

history

up

to the

late 1980s can be

summarized s

alternating

eriods

of

large

nflows

targeted

t

spe-

cific economic

goals

and

periods

of virtual shut

down of

immigration

n

the face of

poor

domestic

labourmarketconditions.Most

importantly,

co-

nomic

goals

formed

a central

orientation f immi-

grationpolicy throughout

much

of

the twentieth

century.

Second,

recent

policy departs

harply

rom

our

history

in not

substantially

educing

nflows

despitehigh

and

persistent nemployment

ates.

The

specific

economic

goals

of the

policy

are also

not

well

specified,

n

contrast

o

the

past.

This

raises

thequestionof whethermmigration olicyshould

return o its focus on economic

goals

and,

f

so,

on

which

goals. Using

a combination

f current mmi-

gration

esearch

nd

comparisons

o historical

pat-

terns,

we do not finda

strongargument

n favour

of

using immigration

or

virtuallyany

of

a consider-

able

list

of

potential

conomic

goals.

Our

argument

is

less that

mmigration

s

not

useful for

such

goals

as

buildingup

the stock

of human

capital

in the

economy

than

that other

policies

are

superior

or

meetingthose goals. Ourconclusion is that eco-

nomic

goals

shouldnot form

the

defining

orienta-

tion

of

immigration

olicy

as we

move nto the next

century.

That does

not

mean, however,

hat immi-

gration

shouldbe

stopped.

There

is

also

no

clear

evidenceof

large

economiccosts to

immigration,

t

least as

long

as

it

is well

managed.

Thus,

the

best

immigration

olicy

for

Canada

ppears

o

us

to be

one that

focuses

on

humanitarian

oals

while

pay-

ing

attention

o short-term

osts

of

immigration

n

theCanadianabourmarket.mmigrationn thelast

20

years

has

played

a

significant

role in

defining

Canada

as

a

country

with

a

richly

diversifiedcul-

ture

and,

hrough

efugeepolicy,

as

a

generous

oun-

try.

Those should

continue o be

its main

goals.

Finally,

we do not

pretend

o do

an

adequate

ob

of

placing mmigration

n the

contextof

political,

social,

and

cultural rends.

Our aim is

to

discuss

immigration

s

an

economic

policy.

We

strongly

encourage

eaders o seekout work

by

authors uch

as

Abellaand

Troper

1983);

Avery

1979);

acovetta

(1992);

Ramirezand

Del Balso

(1980);

and

Rich-

mond

1967)

in

order o

understandhe

importance

of

immigration

o

Canada

n

a

widercontext.

THEHISTORIC

OALSOF CANADIAN

IMMIGRATION

OLICY

In

this

section,

we

describe he main

economic

goals

addressed

by

immigrationpolicy

over

Canada's

CANADIAN UBLIC OLICY

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POLITIQUES,

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4/28

TheEconomicGoals

of

Canada's

mmigrationolicy:

Past and

Present

427

history.

We describe he

goals

within

each of a set

of

periods,

wherethe

period

endpoints

are defined

by

majorchanges

n the stated

goals

of the

policy.

We do not

attempt

o

assess whether

he

policy

was

successful

in

meeting

each of these

goals.

We are

more

concerned

withhow

mmigration

asbeen

per-

ceived

as an economic

policy

tool

andhowthat

con-

ditions our current

ptions.

Before

beginning

on our

investigation,

we

pro-

vide some definitions. t

will

prove

usefulto follow

Freda

Hawkins

(1972)

in

dividing

the economic

goals

of

immigration olicy

into short-

and

long-

term goals. We will categorizeachievingdemo-

graphic

benefits

those

relating

o size

and

age

com-

position

of the

inflow),

benefits from

general

m-

migrant

characteristics uch as

flexibility,

and in-

vestmentand rade low benefitsas

long-term oals

of

immigrationpolicy. Achieving

benefits from

meeting

mmediate

hortages

n

the labour

market,

we will

categorize

as short-term

oals.

As we shall

see,

the

setting

of Canadian

mmigration

olicy

has

often reflected

a basic

tensionbetween

using

mmi-

grationas a tool for promoting ong-termgrowth

and

using

it as

part

of short-term

abour market

policy.

However,

he two sets of

goals

are not al-

ways

in conflict and

n

fact

overlap

at times.

The

pursuit

f

these various

goals

is conditioned

by

attempts

o minimize he

potential

costs

of

im-

migration.

Thus,

a

defining

feature of

Canadian

immigration olicy

has been a

concern hat

the

in-

flows not exceed the

absorptive

apacity

of the

economy.According o thisconcept, he idealrate

of

absorption epends

on the

ability

of

the

economy

to

provide

employment

or

new

immigrants

t the

prevailing

ominal

wage

(see

Timlin

1960).

Hence,

in

periods

of

rising

unemployment

he

absorptive

capacity

or new

immigrants

eclines and

the

gov-

ernment

akes

steps

to

limit the

number

f arrivals.

This

policy

is reversedas

the

domestic abourmar-

ket

tightens.

This is

a

recognition

hat

arge

mmi-

grant

nflows

may displace

native-born

workers n

the hosteconomy n the shortruneven if thereare

offsetting long-run

benefits from the

inflows. In-

deed,

the

concept

of

absorptive apacity

s

probably

more

strongly

related o short-termhan

ong-term

goals:

if

the

government

s

using immigration

o

meet excess demand or

specific occupations

hen

by

definition he

absorptive apacity

of the

economy

is

being

considered.

Similarly,

f the

government

s

pursuingprimarilyonger

term

goals

then it is

less

likely

to

respond

o short-term ost

considerations.

1870-1913

This

was the

period

which,

aftera slow start

during

the last decadesof

the nineteenth

entury,

aw the

settlementof the

west,

high

levels of

investment,

rapideconomicgrowthandthe establishment f a

national

economy.

During

hese

years,

and

indeed

up

to

1930,

immigration olicy

was

part

of a

gen-

eralset of

national

olicies.

These

ncluded hecom-

pletion

of three

transcontinental

ailways,

he

im-

position

of

high

levels

of

protection

n

the

import

of

secondary

manufactured

oods,

and he

adoption

of a

land

policy

aimed at

inducing mmigrants

o

settle n the

west.As a

set,

these

policies

weremeant

to tie

Canada

ogether

nto an

integrated

whole

with

a strongeasternmanufacturingector selling its

wares o an

expanding

western

esource ector.

The

promotion

f

immigration

was

clearly

an

important

element

in

this

development trategy.

Faced with

large

immigration

nflows

from the

United States

and

overseas

starting

n

1896,

the

government

was

forced to

replace

the

original

Act

of 1869 with

a

new

Act in

1910.The new

Act included

a basic

ap-

proach

of

focusing

on a

prospective

mmigrant's

country

of

origin;

an

approach

hatwas

unchanged

until a non-discriminatoryet of regulationswas

created

n

1962.

The

stated

oal

of

immigration

olicyup

to World

War

was to secure

armers,

arm

workers,

and

fe-

male

domestics.The search

or such

workerswas

to be

concentratedn

Britain,

he

United

States,

and

northwestern

Europe.

n

actual

act,

despite

he

pub-

lished

goals

of

seeking only

farmers or

the

west,

the actual distribution

of

immigrants

was

about

equallydividedamongthose intending o work in

agriculture,

manufacturing,

nd

the service sector.

CANADIAN

PUBLIC

POLICY

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VOL.

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1999



5/28

428 AlanG. Greenand David

A.

Green

Moreover,

mmigrants

were destined

o all

regions

of

Canada,

not

just

the

west

(Green

and

Green

1993).1

Further,

whenexcess demand or labour

n-

creased

in

this first

period,

the

government

was

forced o abandon

ts

racist

goals

to

someextent

and

expand

recruitment

eyond

the

traditional

ource

countries.

Specifically,

his meant

bringing

n

im-

migrants

rom

Central

and Eastern

Europe Avery

1979).

1919-1929

During

his

decade he official

immigration

egula-

tory

structure

was

put

in

place.

The

first

major

changecame with the 1919 revisions o the 1910

Immigration

ct.

These

revisions

established

lit-

eracy

test

for

all

prospectivemmigrants;

xpanded

the termsof section

38 of

the 1910

Act to allow

the

government,

hrough

Order-in-Council,

o

limit

the

numberof

immigrants

dmitted

n

a

given

period

and to refuse

admissiondue to

conditions

tempo-

rarilyexisting

n

Canada ;

ndadded

he

word na-

tionality

o that of race

o define

the

origin

of

immigrants.

he

net

effect of these

changes

was to

expand hepowerof thegovernmentverthelevel,

timing,

and ethnic

composition

f

immigration.

This

period

witnessed he first

official

division

of

source

countries nto

preferred

nd

non-preferred

groups;

a division

thatwas to

form he core

of Ca-

nadian

mmigration

policy

until

the

early

1960s.

Admission rom the

preferred

ountries

was

based

solely

on

country

f

origin.2

Prospective

mmigrants

from

non-preferred

ountries

were

admitted

under

a varietyof conditions.Applicants rom northern

andwestern

Europe

weretreated s

almost

equal

o

those

from

preferred

ountries,

while

those from

central,eastern,

and

southern

Europe

aced stricter

regulations.

mmigrants

rom

other

regions

were

admitted

nly

if

sponsored

y

a

relative

already

e-

gally

admitted o

Canada.

In

1925,

ust

two

years

after he

formaldivision

of

countries ntothese two

categories,

he

govern-

mentpassed heRailwaysAgreement,harteringhe

two

major

railway companies

(the

CPR

and the

CNR)

to, recruit,

ransport

nd

place

in

Canada,

agricultural

amilies,

arm abour

nddomestic

erv-

ants. The

agreement

imited

heirsearch or

immi-

grants

o central

and eastern

Europe.

The

pressure

to extend he search

nto

non-preferred

ountries

n

this

way

arose from the

scarcity

of farm abour

n

traditional

ource ountries

e.g.,

Britain

nd

he

US)

coupled

with

growing

demands

or such

workers

from the

west.

Thus,

supply

considerations

orced

the

government

o alterits official

goals.

Recent

work

Green

1994)

ndicates hat

his

policy

of

steer-

ing

immigrants

o the west

was

highly

successful.

TheperiodustfollowingWorldWar is alsothe

first time in which the

government

ormally

ac-

knowledged

he

concept

of short-run

bsorptive

a-

pacity.

n

1918,

he

government

stablished

he

Em-

ployment

Service

Council

a federal

body

with

a

mandate o control he

level of

immigration.

he

concept

of

absorptivecapacity

was

first

imple-

mented

n 1921 when

the

government

efused,

n

the face of

rising

unemployment,

o

issue

applica-

tionsto

employers

wishing

o

bring

n

foreign

work-

ers. This,combinedwith the RailwayAgreement,

signalled

a move

towardactive

intervention

n

the

selectionof

immigrants

y

the

government,

ven if

it

used

other

gents

oractual

mplementation.

teer-

ing

immigrants

o

specific

sectors

and

regions

was

part

of

the stated

government

olicy

from the

late

nineteenth

entury

ut

apparentlynly

becamea fact

after

1919.

The

1930sand

1940s

Afteralmostsix decadesof activelyrecruitingm-

migrants,

he door

closed

to most

newcomerswith

the

passage

of

Order-in-Council PC

695 on

21

March

1931 and

remained

hat

way

until

after

the

end

of the

Second

World

War.

Figure

1,

in

which

we

plot immigration

s a

percentage

f

the current

population

ver

time,

shows

that

immigration

ell

to near

zero

as

a

percentage

f the

population

f the

time.3

Immigration

as closed off

from the whole

world,

with he

exception

f

Britainand

he

US,

and

with theoccupationxceptionof farmerswithcapi-

tal. Even n

these

difficult imes

amily

reunification

CANADIAN

PUBLIC

POLICY

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VOL.

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6/28

The

EconomicGoals

of

Canada's

mmigration

olicy:

Past andPresent

429

FIGURE

Immigration

s

a

Percentage

fthe

Current

opulation,

anada,

896-1997

5.5

5.0

4.5

4.0

3.5

3.0

0

4

2.5

2.0

1.5

1.0

0.5

0.0

1905

1915 9251935

1945

1955

965

1975

1985

1995

005

Year

was a

priority,

lthough

his

right

was

narrowly

im-

ited

to

include

only

immediate

amily

members

who

would

not

directly

enter

he

labour orce.

The new

regulations

were a reaction o

extreme

economic conditions.

By

1931 the

unemployment

rate

stood at over

11

percent

and,

although

he

offi-

cials of the

time did not knowhow

long

these con-

ditions wouldprevail, he situationwas suchthata

policy

shift of this order

of

magnitude

eemed

us-

tified.

Nation-building,

which had been of

key

im-

portance

o the

government

rom

1870 to

1930,

had

been

replaced

by

preserving

he

nation n the face

of

this

major

depression.

This was then

ollowed

by

a

restrictive

olicy

dictated

by

the

exigencies

of war.

1946-1962

Immigration olicy

in the immediate

postwar

pe-

riod was dominatedby two mainevents.The first

was

the

large

influx of

displaced persons

from

Europe.

The

second was the

establishment

f clear

ethnic and

economic

goals

for

immigration olicy.

The

displacedperson

low fit with

the broad thnic

targets,

ince

most

of those

accepted

werefromEu-

rope,

but

was sometimes

n

conflict

with the eco-

nomic

goals.

The tone

of

immigration

egulations

or the

dec-

adeanda halffollowingthe end of hostilitieswas

set

by

Mackenzie

King's

statement

efore

he

House

in

May

1947. It

is worth

repeating

n

some

detail

since it was a

blueprint

or

government

olicy

on

this issue.

The

policy

of the

government

s to foster

the

growth

of the

population

f Canada

by

the en-

couragement

f

immigration.

The

government

will

seek

legislation,

regulation

and

vigorous

administration,oensure hecareful electionand

permanent

settlement of

such numbers

of

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430 Alan G. Greenand DavidA. Green

immigrants

s can

advantageously

e

absorbed

in our

national

conomy....

There

will,

I

am

sure,

be

general agreement

with the

view that

the

people

of Canada o not

wish,

as a

resultof mass

immigration,

o make a fundamental

lteration

in the character f our

population.

Large-scale

immigration

rom the

Orient

would

change

he

fundamental

omposition

f the Canadian

opu-

lation

(Quoted

n

Green

1976,

p.

21).

The statement as

six

main

components.

irst,

m-

migration

was

to be

used to

promote

population

growth.

Second,

immigration

would

improve

he

standardof living of the extantpopulation.This

would

operate

y

enlarging

hedomestic

market,

hat

is,

by

promoting

conomies

of scale.

Third,

mmi-

gration

was

to be selective.

Fourth,

mmigration

as

to

be related

to

the

absorptive

capacity

of

the

economy.

Fifth,

mmigration

was

to

be a

matter f

domestic

policy,

hat

s,

national oncernswere

para-

mount. Sixth,

immigration

hould

not

change

the

basic

character f the

Canadian

opulation,

mean-

ing

thatrestrictions

n Asian

mmigration

must

re-

main n place(see Hawkins1972).

The statement ontaineda

potential

ension

be-

tween

the

main

goals

of

immigration

olicy.

It

en-

compassedong-run

enefits

i.e.,

population rowth

and economic

development),

while

reaffirming

he

government's

ommitment o

matching

short-run

labourmarket onditions.As

in

the

1920s,

no

real

tension existed

in

the

immediate

postwarperiod

becausethe desired

mmigrant

was

essentially

un-

skilled.Thepolicywas dominated yhighdemand

for labourers

n the

booming

resource

ector,

par-

ticularly

n

forestry

and

mining.

Thus,

the

govern-

ment

could

increase

he

population

ize

and

meet

perceived

labour

shortages

at the

same time

(Hawkins1972).

However,

upply

constraintsrom

traditional

ourcecountriesmeant hat

the

govern-

ment

had to

partially

bandon he racist

elementof

the

policy

and extendits search

to

non-preferred

countries

Richmond

1967).

It did this in

part

by

relaxingconditionsof acceptance or immigrants

from

non-preferred

ountries

nd

partlyby

expand-

ing

the

sponsorshipights

f

immigrants

rom

entral,

eastern,

nd

southern

urope

o

parallel

hose

avail-

able o

immigrants

rom raditionalource

ountries.

The extensionof

sponsorship

ights

to

landed

immigrants

romnon-traditional

ources n

Europe

created

difficulties.

Landed

mmigrants

rom

south-

ern

Europe,

nd

Italy

n

particular,

eremuchmore

likely

to make

use of

sponsorship ights

han mmi-

grants

rom

raditionalourcecountries.The

result

was a much

moreunskilled nflow

beginning

n

the

late

1950s

(Green

and

Green

1995).

This

occurred

just

at a time of

economic

policy

change

as

the

governmentought o steer heeconomyawayfrom

a resourcebase and

towarda modern

manufactur-

ing

structure. s

part

of this

change

n

direction,

t

was

argued

hat

Canada

eeded

killed

workers

nd

needed hem

mmediately.

o

accommodate

onger

term skill

requirements,

he

postsecondary

duca-

tion

system

was

to be

expanded,

but the

more

m-

mediate

needs would have

to be met

through

immigration.4

Thecontrast etween helarge,unskilled nflow

and

the

goal

of

raising

the

skill

level

of the

workforce

reated

he first

substantial

ension be-

tween

the short-

and

long-term

goals

of

immigra-

tion

policy.

This

tension had

a

direct

nstitutional

embodiment n

the two

departments

ealing

with

immigrants

n

this

period.

The

Department

f

Citi-

zenship

and

Immigration

ook a

longer

run

view,

while

the

Department

f

Labour

ttempted

o tie

the

level of

immigration

o the

business

cycle

and,

moreover,o specificoccupational ob vacancies.

Hawkins

1972)

argues

hat,

nstitutionally,

he late

1950scanbe

seen

n

terms

of a

battle

between hese

two

departments.

rom he

onger

erm

view of

Citi-

zenship

and

Immigration,

larger,

ess skilled in-

flow

wasnot

necessarily

troubling

utcome.How-

ever,

for the

Department

f

Labour,

t

was a

disas-

ter,

especially

coming

as it

did at a

time of

rising

unemployment.

The

justification

or

immigration

s a meansof

filling

skill

gaps

is

significant

ince it

recurs

many

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TheEconomic

Goals

of

Canada's

mmigration

olicy:

Past

and

Present

431

times

in

the

next three

decades.5

This

approach

points

to an

implicit input/output

model

of

the

economy

in which

production

s

hampered

f

one

importantactor

s

missing.

The idea

of usingim-

migration

o

prevent

hat

problem

s at

the heartof

the selection

system

created n the next

period

we

consider. t

did, however,

ncrease

potential

upply

problems

ince

the world

supply

of

skilled

workers

was less thanthat

of

unskilledworkers.

1962-1973

In 1962the

government

bandonedts

long-standing

racist

immigrationpolicy.

Henceforth,

admission

was to be basedon anindividual's ersonal harac-

teristics,

especially

heir

education nd

otherskills

qualifications,

atherhanhis or her

nationality.

his

is

clearly

set out

in

the 1962

policy

statement

by

the minister

of

immigration

nd

citizenship,

Ellen

Fairclough:

The

key

to

our

immigration

olicy

will

be the

consistent

application

f

proper

election

stan-

dards

designed

o

bring

he best

possible

settlers

to Canada.amsureallCanadiansgree hatonce

thesestandards reestablished

hey

shouldbe

ap-

plied

consistently

o all who

seek

admission

o

this

country, xcept

where

the admission

of the

immigrant

s basedon

compassionate rounds

r

on close

relationships

Quoted

n

Green

1976,

p.

37).

The lack of mention f

population rowth

s a

main

goal

is

in

striking

ontrasto Mackenzie

King's

1947

statement.Theemphasison selectionstandardsn-

dicatesa

victory

or

the short-run iew of

immigra-

tion

policy championed

n the

Department

f La-

bour.

ndeed,

even the

elimination

f

the

racistbias

in

the

policy

could be seen

cynically

as an

attempt

to

expand

he searcharea n

response

o

inadequate

supplies

of skilled

immigrants

from

traditional

sources. This

victory

was consolidated

with

the

amalgamation

f the

Department

f

Citizenship

nd

Immigration

nd he

Department

f

Labourntothe

Department

f

Manpower

nd

Immigration

n 1966.

The new

department

as

primarily

oncernedwith

linking

he level and

composition

f

immigration

o

the immediate eedsof

the domestic abour

market

(see

Hawkins

1972,

pp.

127-31).

The

shift n

policy

wasnot without

omplications.

Eliminating

acism n

selection meant

that

immi-

grants

from all

parts

of the

world

gained

greater

sponsorship ights.

As

immigrants

rom

countries

with

ower

average

ducation evels

exercised hese

rights,

the

result

could have been

an

increasingly

unskilled

nflow.

Also,

the new

selection

standards

were not well

specified,

mplying

hat

considerable

discretionary

ower

was

being

placed

n

the

hands

of overseas mmigrationfficers.

The

solutioncame

n

1967 with

the

introduction

of

the

point

system

(Order-in-Council,

October

1967,

PC

#

1616).

The

point

system

provided

an

objective

scale based on

education,

ge,

language,

etc.

against

which

applicants

or

admissioncould

be assessed.It

was the

first

major

tep

to limit

the

discretionary

owers

of

immigration

fficersand o

provide

them

with a

set

of

explicit

guidelines.

Applicantswere divided into three main entry

classes:

independents,

whose

admission

depended

solely

on

an

assessmentunder the

point system;

nominated

elatives,

who were

assessed underthe

point

system,

but

were

given

bonus

points

basedon

family

ties;

and the

family

class,

who were

admit-

ted

based

solely

on

kinship

ties.

The

family

class

was to

be

given

top

processing

priority.

Witha

total

number f

immigrants

oughly

ixed

by

the size of

the

budget

allocated o

processing pplications,

his

meantthatassessed mmigrantswereeffectivelya

residual

under he new

system.

This

was not

an im-

mediate

issue,

as

the

assessed

part

of

the inflow

made

up

over 70

percent

of

immigrants

n

the

re-

mainderof

this

period

Wright

and

Maxim

1993).

This feature

was to

become

very

important,

ow-

ever,

when the level

of

immigration

was

cut in

the

recessions

ahead.

The form

of the

original

point system

ndicates

success for those who

viewed

immigration

as an

immediate

abourmarket

olicy.

The

points

assigned

CANADIAN

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432

Alan

G. Greenand David

A.

Green

to

specific occupations

were to

be

kept

under on-

stant

review and

changed

as

new

information n

vacancies

became

available.

n

fact the

changes

n

point

levels

assigned

o

specificoccupations

were

distributed

o overseas

agents

on a

quarterly

asis

(Green

andGreen

1995).

This was the

ultimate ic-

tory

of

the belief

that

mmigration olicy

could be

micro-managed.

able

1

provides

he

distributionf

points

acrossassessed

categories

n

versionsof

the

point

system

rom

1967

to

today.

n

1967,

an

appli-

cant needed 50 out of a

possible

100

points

to

be

admissible.Of the total

possible

points,

40

percent

were based

on

assessmentof

predicted

hort-term

successin the applicant'sntended ccupation nd

destination.6

his was balanced

by longer

ermad-

justment

actors,

such as

education,

mplying

hat

the

short-term

oint

of

view

had not won

an abso-

lute

victory.

1974-1985

Thiswas a

period

f

big swings

n

thebusiness

ycle.

Immigration

nflows were

adjusted

accordingly.

Immigration

ell

between1974and

1978,

rose from

1978to 1980 andthen fell from1980 to 1986.The

major wings

n

the level

of

business

activity

n

this

period

were the

first

real test of

the

efficacy

of the

new

regulations overning

dmission.

n

some

ways

they

failed since

applicants

could obtain

enough

points

based

on

years

of

schooling,

age,

and lan-

guage facility

to

meet

or

exceed the

minimum

e-

quired

oradmission ven

hough

heir

pecific

kills

might

be

in

excess

supply

at

the time.

This failure

indicates he

difficulty

of

trying

o

controlboththe

level andcompositionof the skilledcomponent f

the inflow with

points

assessed for

personal

har-

acteristics.

The

governmentesponded

y

imposing,

in

1974,

a

ten-unit

penalty

n

points

assessment

f

the

applicant

did not have

previously rranged

m-

ployment.

The

system,

however,

wassuccessful n

reducing

he number f

unskilledworkers

dmitted

to Canada

Green

1995;

and

Green ndGreen

1995).

Although

he

regulations

stablished

n

the 1960s

remainedargely ntactduring his nextperiod, he

government

id

bring

n a new

Immigration

ct

on

10

April

1978.

ThisActdefined hreemain

goals

of

immigration olicy:

(i)

to facilitatethe

reunion

n

Canadaof Canadian esidents with

close

family

members rom

abroad;

ii)

to

fulfil

Canada's

egal

obligations

with

respect

o

refugees

and

uphold

ts

humanitarian

raditions;

iii)

to

foster

the

develop-

mentof

a

strong

andviable

economy

n all

regions

of

Canada.Under

hese

provisions amily

members

and

refugees

were

given

top processingpriority

nd

Canada

was

committed

o

bringing

n a

substantial

numberof

refugees

every year,

rather han

ust

in

emergency

ituations.This forceda

reduction

n

the

shareof

immigrants

who were

assessed

and

repre-

sented a shiftawayfrom a policyfocusedon eco-

nomic

goals.

Concerns

ver

meeting

hort-term

abourmarket

goals

and over

absorptive apacity

did not

disap-

pear,

however.

The

first

concernwas met

by

focus-

ing

on

applicants

ith

arranged

mployment

r those

who

could

be

directed o

specific

occupations.

Ab-

sorptive

apacity

oncerns

were

met

by

altering

he

size

of the

ini??w

in

response

o

cyclical

fluctua-

tions.The argest djustmentsccurrednMay1982

when

the

government

eclared hat

the

only

inde-

pendent

pplicants

who could

enterwere

those with

arranged

mployment.

At the

same

time,

the

gov-

ernment

nnounced

ubstantial uts in

the level of

the inflow

which were

implemented

n

the follow-

ing year

and

remained

n

place

or the

following

our

years.

These

adjustments

ndicate that

short-term

economic

goals

still

held

precedence

n

this

period.

Nonetheless,

economic

goals

took a

back

seat to

humanitarianoals.

1986-1993

When

the

immigration

oor

reopened

after

the

re-

cession

of

the

early

1980s,

it

did

so

on a

very

dif-

ferent

basis

than when

it had

been shut. In

1985,

the

new

Conservative

overnment

ndertook re-

view of

immigration olicy,

the

conclusionsfrom

which

are evident n a

specialreport

o

Parliament

in

June

of

1985

(Canadal985a)

and in the

Annual

Report oParliament nFuture mmigration evels

several

monthslater

(Canada

1985b).

A

central

CANADIAN

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VOL.

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10/28

The

EconomicGoals

of

Canada's

mmigration

olicy:

Past andPresent 433

TABLE

The

Points

ystem

ver

ime

Factor '67 '74 '78 '86 '93 '96

Education

20 20 12

12

14

21

Experience

-

-

8

8

8

9

Specific

ocational

10

10 15

15

16

preparation

Occupational

emand

15 15

15

10

10

Labour

arket

alance

- - -

- -

10

Age

10

10 10

10 10

13

Arranged

mployment

10

10

10

10 10

4

or

designated

cc.

Language

10

10

10

15 14

21

Personal

uitability

15

15

10

10 10

17

Levels

-

- -

10

8

Relative

0/3/5+ 0/3/5 5

-

-

5

Destination

5

5 5

Total 100

100

100

100

100

100

PassMark 50

50

50

70

67

Bars

n

Entry:

1967 noone

ategory

esultanbeconclusiveither

ay.

Feb. 974

applicant

ust

ithereceive

t

east

neunitor

occupational

emandr

get

en

points

or

arranged

employment

r

designatedccupation.

Oct. 974 ten

points

ould

e

deducted

nless

he

applicant

howed

videncef

arranged

mployment

rwas

going

to

a

designated

ccupation.

emoved

n

April

979 ut

eimposed

n

September

979.

May

982

only pplicants

ith

rranged

mployment

re

ligible

oradmission.

emoved

n

January

986.

1992 zero

nitsor

xperience

s an

automaticar

nless

he

person

as

arranged

mployment.

Note: heablehowsmaximum

oints ossible

n

each

ategory.

aximum

oints

nd

PassMarkave

een

escaled

in

1993 nd 996

o

put

he

ystem

n

erms f

points

ut f

100.

+

Pointswarded

epend

n

relationship

o

sponsor.

*ThePassMarkariesy kill roup.Theotal vailableointsctuallyquals4.The assmarksre: rofessional,

52;

killed

dministrator,2; echnical,7;

rades,

5.

CANADIAN

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434

Alan G.

Greenand

DavidA.

Green

concern n these

reports

s that

fertility

n

Canada

had

fallen

below

replacement

evels,

with the im-

plication

hat he

population

would

begin

o

decline

justafter

he turnof the

century

f

immigration as

maintained

t its then current ow levels. The

re-

ports

also

reflect

a

belief that he economic

compo-

nent

of

the

inflow should be increased.

But,

cau-

tions the

Annual

Report,

the

ncrease

n

the eco-

nomic streammust

not ... be at

the

expense

of the

social and

humanitariantreams

ibid.).

Immigra-

tion

levels

would

be

increased

ubstantially

nd

re-

strictions

on

the economic

component

would be

lifted

to

try

to makesurethat

component

rew

with

theoverall evels,buttheassessed nflowwas still

very

much

a residual.The new

policy

represented

victory

for those who saw

immigration

s a

long-

run

policy

tool.

Immigration,

s an

economic

policy,

would

be used

primarily

to bolster

population

growth

and

o

readjust

he

age

structure

f

the

popu-

lationso

that herewouldbe

enough

workers

o

pay

for

the

baby

boomers'

pensions

and

healthcare.

The outcome

of

these

policy

deliberationswas

a

removal f theprerequisitef arrangedmployment

for

independentapplicants

n

January

1986. The

level of the

inflow

jumped

rom

83,402

in

1985 to

99,219

in

1986,

and hen

o

152,098

n

1987.These

were

the

first n a

seriesof increases hat

eventually

led

to

a level of

nearly

250,000

in 1993.

The

new

policy

also

saw

the

expansion

of

the

business

component

of the inflow.

Self-employed

workers

and

entrepreneurs,

ho were

expected

to

establishand run a business n Canada,had a spe-

cial

place

within he

point

system

rom

he start. n

January

1986,

the

government

dded

the investor

class,

applicants

within

which

gained

admission

y

investing pecified

amounts

n

Canadian

nterprises.

Whilethe businessclasses havenever

becomemore

than a small

part

of the

inflow,7

his

represents

philosophical

hift toward n

idea that

mmigration

could be used as a sourceof

capital

and

as a means

of

establishing

rade

links.8

Notice that

these,

too,

arelong-term oalsof immigration olicy.

At the same

time as these

changes

were

being

implemented,

he

government

undertook

demo-

graphic

eview

o examine he

consequences

f

de-

clining

birth

ratesand their

mplications

or immi-

gration

policy.

That

review,

whichwas

presented

n

1989,

indicated hat

immigration olicy

was

not

a

good

tool

for

meeting

he

demographic oals

setout

in

the earlier

policy

statements.

n

particular,

ith

a

fertility

rateof

1.7,

gross

flows

that were

likely

to

be

politically

easible could not

provide

continual

population rowth.

Further,

he

review

showed

hat

even wild

immigration

cenarios

with

large

nflows

and

50

percent

of

the inflow under

age

15

would

not have a substantialmpacton the age structure

(Canada

1989).

Immigration

was not

the solution

for a

naturally ging

population.

In the

early

1990s,

the

government

moved

away

from

demographic

oals.

At

the same

ime,

it

began

to

increase

he

importance

f

the

economic

compo-

nentof the inflow.9

Beginning

n

May

1991,

a

des-

ignated

ccupations

ist wasformedwhich

contained

occupations

n

short

supply

in

specific

provinces.

Immigrants homatchedhislistweregivenadded

points

and

processed

n

a

high

priority

basis. Most

importantly,

n

1992

the Conservatives

ntroduced

a

new

Immigration

ct

which

was

designed

o

pro-

vide

greater

ontrolover the

inflow.

The Act

gave

the

department

road

ew

regulatory

owers,

nclud-

ing

the

power

to set

limits on

components

of the

inflow and

urn

away

applicants

nce

specific

num-

bers

hadbeen

reached or a

particular

ategory.

his,

potentially,

was a

move

toward

ncreased use

of

immigrationoreconomicpolicy.Indeed, hegov-

ernment

roposed

o

use the new Act

to reduce

he

proportion

f

the nflow

who

were

n the

family

class

from

52

percent

n

1992

to 43

percent

by

1995.

Strangely,

new

set of

regulations

roposed long

with

heAct

didnot

makeuse of

these

powers.

While

the

regulations

roposed

etting argets

or the vari-

ous

components

f the

nflow,

he

assessed lass was

still

a residual.The

government

lso

committed o

stablenflowsofabout1percent f thecurrent

opu-

lationand

ncreased he size of

the inflow

to

nearly

CANADIAN

UBLIC OLICY

ANALYSE E

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OL.

XXV,

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4

1999



12/28

TheEconomic

Goals

of

Canada's

mmigration

olicy:

Past andPresent

435

250,000

in

1993

in

spite

of a

persistently

poor

la-

bourmarket.

This

was

the first

time thata

Canadian

government

ad

responded

o

high unemployment

rates

by

even

maintaining,

et alone

increasing,

he

size of

the inflow.

RECENT OLICY

Recent

mmigration

olicy

can be seen as an exten-

sion of

policies

established

n

the

early

1990s.

The

most

comprehensivelueprint

ortheLiberals'

trat-

egy

is found

in the

1995

document,

nto the 21st

Century:A Strategy or Immigrationnd Citizen-

ship.

The

key

elementsof the new

framework re

as

follows.

Immigration

evels are

to be maintained

t

1

percent

of the

population

evel,

though

target

ranges

rather han

specific

numbers

are to be set.

Within hat

rough

total,

refugee management

s

to

be moved into a

separate

ystem

with

separate

e-

sourcesand

goals

from he rest of

the

inflow.

There

is a

clear commitment o

achieving approximate

equality

of

the

family

class and

assessed

inflows,

even if thatmeans allingshortof overall evel tar-

gets.

For

instance,

Into

the 21st

Century

proposes

placing

family-class

applicants

ther

than

spouses

and

dependent

children in

a

separate

class

and

putting

numerical

imits on

that

class.

All

of these

elements

point

o

a

continuation f the

trend oward

an enhancedrole for

the economic

component

of

the inflow.

Indeed,

t is the

Liberal

government

hat

has met the

goal

stated

by

the

Conservatives f

hav-

ing

the

family

component

make

up

no

more han45

percentof theinflow.

What

s

the

goal

of

this

enhanced

conomic om-

ponent?

Statements

n

Into the 21st

Century

nd a

set of

proposedregulations

ntroducedn

Novem-

ber

1995,

but

subsequently

ithdrawn,

rovide

ome

guidance.

Those

statements

ndicatethat the

gov-

ernment

no

longer perceives illing

short-term c-

cupational

gaps

as an

important

goal.

In

telling

wording,

he

government

tates that

filling precise

occupational iches s notalwayseffective nmeet-

ing long

term

needs

Canada

995).

The 1995

pro-

posedregulations

ontained

reworking

f the

point

system

with

emphasis

n broad

ccupational

lasses

rather

han

specific categories.

However,

political

trade-offs

meanthis switch

away

from

targeting

occupations

will not be

complete.

In Into the

21st

Century

the federal

government

ommits o

pro-

vide

provinces

with the

opportunity

o choose

a

number

f

independentmmigrants

who

meet

pro-

vincialeconomic

objectives

Canada

1994b).

Im-

migrants

will be selected o meet

specific

skill

needs

in

specific

regions,

as denoted

by

the

provincial

governments,

ith

applicants

n

this

categorygiven

extra

points

and

high

processingpriority.

The

current

oals

seem, instead,

o be

more

ong

term.

Specifically,

mmigration

olicy

s to

be used

o

change

he nature

f the

Canadian

workforce: The

proposed hanges

in

mmigration

olicy)

seekto im-

prove

he

skills,

lexibility

nd

diversity

f the

Cana-

dian

workforce

esponding

o

Canada's

ew,

emerg-

ing

economy

ibid.).

Notably,

he

government

ro-

posed

a

program

e

establishedo

identify

ccupations

where

there s

a

shortage

f

labourand

which

are

closelyrelated o the skills of a specific mmigrant.

Thus,

rather

han

making

admission

onditional

n

there

being

a

labour

hortage

n

the

immigrant's

n-

tended

occupation,

he

government

would

bring

in

skilled

workers nd

help

hem

o

search or

a

job,

pos-

sibly

n a

different

ut

related

ccupation

o

their

own.

The

most

telling

evidence

of a

switch

toward

long-term

goals

is

the virtual

abandonment f

ab-

sorptive

apacity

as

it

had

been

interpreted

y

pre-

vious governments.This is evident in Minister

Sergio

Marchi's

tatement

ccompanying

he

1994

Immigration

lan:

Periodically

hroughout

ur

history

especially

during

economic

downturns

there

have been

calls to slam

the

door shut

to

immigration....

believe

thatsuch

sentiments

ndicate ack of

vi-

sion of

what

his

country

an

become....I

believe

that

decisionsabout

mmigration

houldbe made

fromthe perspectiveof a

long-term

vision for

Canada's uture

Canadal994a).

CANADIAN

PUBLIC

POLICY

-

ANALYSE

DE

POLITIQUES,

VOL.

XXV,

NO.

4

1999



13/28

436

Alan G. Greenand DavidA.

Green

The main evidence that the

government

as aban-

doned

absorptivecapacity

is the

maintenance f

large

inflows in the face of

persistenthigh

unem-

ployment.

The level

of the inflow has

been reduced

in

recent

years,

but

to nowherenear

he extentone

would

predict

based

on earlier

responses

o bouts

of

high unemployment.

o makethis

point,

we re-

gressed

numbers f landed

mmigrants

n

each

year

from 1946

to

1989

on

a

constant

and

he detrended

annual

unemployment

ate

lagged

by

one

year.10

This

is

meant o show the correlation etween m-

migration

and the

business

cycle

over a

period

n

which

absorptive apacity appeared

o be

part

of

policydecisions.Figure2 containsa plotof the ac-

tual

mmigration

umbers

nd

a fitted ine

showing

predicted

mmigration

evels based

on

our

simple

regression.

Note that the fitted line

from 1990 to

1995

represents prediction

f

the

evels

that

would

have been

in

place

over

this

period

if

absorptive

capacity

were still

important.

he fitted ine

tracks

actual

immigration

evels

quite

well before 1990

with the

exception

of the

spike

created

by

the 1956

Hungarian

efugee

movement.

n

contrast,

here s

a

largegap

between he

actual

and

predicted

nflows

in

the

1990s;

while the

prediction

ased

on

extend-

ing

the

pre-1990

absorptive apacity policy

turns

down

n the 1990sbecause

of

risingunemployment

rates,

the

actual

evels

continued o rise.

By

1993

the

gap

between he actualand

predicted

evels was

150,000.

Even with recentreductions n

the

immi-

gration

evel,

thedifferences

approximately

0,000.

The

gap

is a

measureof the extent

to

which both

governments

n

this

period

have moved

away

from

earlier

policies.

The

abandonment

f

absorptive

a-

pacitysignalsa victoryof the long-termover the

short-term iew

of

the benefitsof

immigration.

n-

stitutionally,

herecreation f a

separate

Department

of

Citizenship

nd

Immigration

n

1993can be seen

eitheras

the sourceor a

signal

of the shift in

power.

Several

acets

of

the new

immigration rogram

are

ailored o the

goal

of,

ensuring

hatnewcomers

FIGURE

Actual

ndPredicted

mmigration

ates,

Canada

947-1997

27

26

25

24

\

o

23I I

22

C

21

S20

I

319

o

18

\

I

7I I

I17

1

\

i

-14

i

c

13

-

-

12

t

c

11

-

--

9

\ /

9

7

[

6-

4

-

Actual

mmigration

3

-

- -

Prediction

ased

n

Unemployment

ate

2

1

0

I

I

45

50

55

60 65

70 75 80

85 90

95

100

Year

CANADIAN

PUBLIC

POLICY

-

ANALYSE DE

POLITIQUES,

VOL.

XXV,

NO.

4

1999



14/28

The

EconomicGoals

of

Canada's

mmigration

olicy:

Past

and Present

437

to Canada

an

ntegrate

ndcontributeo

Canada

s

quickly

as

possible,

without

adding

o

the

burden

on social

programs

Canada

1996).

This is

the

sourceof newpolicy proposalswhich wouldmake

immigrantspay

for

settlement

ervices and make

sponsors

post

bonds out of which

any

welfare

use

by

the

sponsored mmigrant

n the

first ten

years

afterarrivalwouldbe subtracted.t

is also a

source

of the

push

for more flexible

workers

ince,

in

the

new conomy

where

constant

hange

s

to be ex-

pected,

more

lexibility

will

mean ess

timecollect-

ing

social

security.

Most

mportant

n

this

regard

s

the increased

mphasis

on

language

proficiency

n

the selectionprocess.Immigrantsluent n English

or French

re

argued

o

enter he

labourmarket

more

quickly.

Finally,

the

government

as

maintained

commitment

o

using

mmigrants

o

generate

nvest-

ment

and

trade

lows.

SUMMARYF

MAIN

TRENDS

The

policy periods

we

haveexamined

anbe

aggre-

gatedinto five broadperiods.The firstcovers the

time before

approximately

960.

This is a

period

when short-and

long-term

conomic

goals

for im-

migrationpolicy

were

in

concert.The

government

wantedboth more

people

n

general

o

populate

n

empty

and andmore

unskilled

people

n

particular

to

provide

he abour o

develop

ournatural

esource

base. The

specific goals changed

over

time from

unskilled

abour

generally

before

WorldWarI

to

farm abour or the west

in

the

1920s to

unskilled

labour orminingandforestryn the 1950s.Over-

laid on

top

of this was an

attempt

o tailor

he

size

of the inflow to the

absorptive capacity

of

the

economy.

This meant

virtually

hutting

down im-

migration

during

economic

downturns. rom

1960

to 1978 the economic

goal

of

immigration

olicy

changed

o the short-termne of

matching

kill

gaps

in

the

occupational

tructure. he

pointsystem

was

part

of an

attempt

o

do that

matching

as were at-

tempts

o

keep

the size of the

sponsoredomponent

of the inflow small. From 1978 to 1986,the eco-

nomic

goals

of

immigration olicy

were

swamped

by

humanitarian

oals.

The

government

maintained

a

commitment

o

targeting

mmigrants

o skill

gaps

buttheir

ability

o do so was

hampered y

a

system

in whichapplicants ssessedfor theirskills were a

residual

category

relative to

refugees

and

family

class

immigrants.

hen

rom

1986to

1989,

the

gov-

ernment

ocusedon

long-term,

demographic oals

for

immigration,

lacing

ittle

emphasis

on

select-

ing specific

skills.

Up

to the end

of the

1980s,

Canada's

mmigra-

tion

policy

couldbe

broadly

ummarizeds

one with

low inflows n

economic

downturns

lternating

ith

large inflows directed at specific goals in better

times. This

time-honoured

attern

was

abandoned

in

the

1990s,

with the

government

deciding

that

long-term

benefits of

immigration

were

sufficient

to

justify

maintaining

arge

inflows in

the

face of

high

domestic

nemployment.

urther,

he

ong-term

goals

being

pursued

re

different

rom

those at

any

previous

ime:

they

are not

the

broad

demographic

goals

of

expanding

he

population

s

an end in

it-

self or of

changing

he

age

structure.

nstead,

the

new long-termgoal appearso be to use immigra-

tion to

change

he

nature f

the

Canadian

orkforce,

making

t more

skilledand

flexible.We

have

never

before

ried o use

immigration

olicy

to

change

he

skill

mix in the

economy

without also

stating

ex-

plicitly

whichskills

are

acking,

hat

s,

without

ry-

ing

to

micro-manage

he

process.

WHAT

SHOULDTHE

ECONOMIC OALSOF

IMMIGRATIIONOLICY E?

We

turnnow

to

assessing

immigration

s an eco-

nomic

policy

tool

for

Canada.

Rather han

directly

evaluating

urrent

mmigration

olicy,

we

pursue

he

more

general

end of

examining

a

set of

potential

economic

goals

for

immigration.

Once

that

evalua-

tion

is

complete,

an

understanding

f

the

subset

of

goals

characterizing

urrent

olicy

will follow.

The

specific

set of

goals

we examineare

those that

have

been

pursued

n

Canada's

mmigrationolicy

at

least

once in

our

history.

Focusing

on

this set allows

us

CANADIAN

UBLIC

OLICY

ANALYSE E

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XXV,

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1999



15/28

438

Alan G. Greenand DavidA.

Green

to

narrow urdiscussion

o

the

goals

thathavebeen

deemedrelevant or Canada.Our

approach

n

con-

sidering

each

goal

is to ask whether

mmigration

s

the

best

policy

for

meeting

hat

goal

rather han

dis-

cussing

the usefulness

of the

goal

itself.

Thus,

we

will

consider

mmigration

s one of

a

group

of

(pos-

sibly)

competing

policies.

We

argue

hat,

unlike n

the

past

when

therewere

identifiable

oals

for

im-

migrationpolicy

that could not be met

through

l-

ternative

policies,

there s

currently

o

single

goal

for

immigration olicy

thatcould

not be

met better

through

an alternative.

Beforeevaluating ny policy,we need to decide

who we care about

in the

evaluation.

A

common

approach

s to examine

he

impact

of

immigration

on individualsresident

n

the host

country

before

immigration

ccurs.

This,

however,

eads to

poten-

tial nconsistencies s

the

optimal

olicy

may

change

once the new

immigrants

rrive

n

Canada nd

heir

utilities

are included

n

any

calculations. 1

s an

extreme

response

o this

consistency

problem,

we

could take accountof the utilities not

only

of

resi-

dentsandimmigrants ut also of potential mmi-

grants.

This

approach

lso has

difficulties,

which

are

evident

n the

contextof a classical

utilitarian

social welfare unction.

Working

with such a func-

tion,

we could end

up

at the

conclusion that we

should

bring

n

a

large

number

f

immigrants

ven

if

doing

so meant

very

low

average

utilities

for

everyone

n

the

country.

he atter

policy

essentially

tradesoff the

standard

f

living

for sheer

numbers

of individuals ndarises

because he

averageutility

level andthe number f peoplein a population re

perfect

substitutes

n a

classical

utilitarian ocial

welfare function.

In

response

to

these

problems,

Blackorby

and

Donaldson

1984)

introduce n

ap-

proach

called

critical level

utilitarianism

CLU).

Under

CLU,

one evaluatesdifferent

ocial states

by

adding

up

the

lifetime

utilities of all residentsand

potential

residents after

subtracting

rom

each a

fixed,

critical evel of

utility,

a. This critical

evel

acts like a fixed

cost

of

adding

extra

people

so that

a higher evel of a implies hatsocietyplacesmore

emphasis

on

individual evels of

utility

and

ess on

having

more

people.

Thus,

we can

analyze

various

immigration

olicies

not

just

by

asking

whether t

increases total or

average utility

but

by

asking

whether t results

in

more

people (including

the

immigrants

who

would be

brought

in

under the

policy) having

more

than

a minimum tandard f

living.

It is this

CLU

approach

which we will im-

plicitly

consider

n the

discussion

hatfollows.

Our

next

step

s to sketchout an

economicmodel

as a frameworkor

discussion.The

model we

will

consider

s a standardne

presented

n

Borjas

1995)

among

other

places.

In

this framework

e assumea

productionunction (K,L)whichis a functionof

the

capital,

K,

and

abour,

L,

used

in the

economy.

For the

moment,

mmigration

will be

assumedto

cause

an

increase n L but

have no

effect

on

K. Per-

haps

the most crucial

assumption

at

this

point

is

about he returns

o scale embodied n

the

produc-

tion function.

Trefler

1997)

showsthat f

the func-

tion

embodies

a

constant

returns-to-scale

echnol-

ogy

then

ncreasing

without

hanging

K

may

mean

that

average

ncome will

stay

constantor

fall,

de-

pendingonassumptions elating o tradeandfactor

mobility.

f,

in

contrast,

he

function

embodiesan

increasing

eturns-to-scale

echnology

then immi-

gration

an lead

to

growth

both in

total

output

and

in

incom

the economic goals of canada's immigration - green, green

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