Evidence of meeting #66 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was immigration.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

9:30 a.m.

Conservative

The Chair James Rajotte

I call this meeting to order. This is the 66th meeting of the Standing Committee on Finance.

The orders of the day, pursuant to the order of reference of Monday, May 14, 2012, are continuing our study of Bill C-38, an act to implement certain provisions of the budget tabled in Parliament on March 29, 2012, and other measures.

Colleagues, we have with us two panels here this morning.

In the first panel, we have six presenters.

We have Mr. Patrick Grady, an economist with Global Economics; we have Mr. Richard Kurland, who is a policy analyst and attorney; we have Mr. Ian Lee, professor at the Sprott School of Business, at Carleton University; we have Mr. Lorne Waldman with us as well; representing the Canadian Federation of Students, we have Madame Roxanne Dubois, national chairperson; and from Oxfam Canada, we have Mark Fried, the policy coordinator.

Welcome to all of you. Thank you for being with us. You each have up to five minutes maximum for an opening statement.

We will start with Mr. Grady and work our way down the line.

9:30 a.m.

Patrick Grady Economist, Global Economics Ltd., As an Individual

Thank you, Mr. Chairman.

I'm pleased to have received your invitation to testify on the immigration measures in Bill C-38, part 4, although it's a very small part of a rather large pie.

For background, I'm an economist who has studied immigration issues. I collaborated with Professor Herbert Grubel to do a study for the Fraser Institute, which estimated that since 1987, immigration has been costing the Canadian government $16 billion to $23 billion per year.

I'm also on the advisory board of the Centre for Immigration Policy Reform. This is a new organization that was established to advocate for immigration policies that are more in Canada's economic interest. We believe it makes no sense to continue to bring in so many immigrants every year when there are so many Canadians unemployed and immigrants are performing so poorly in the labour market. Our view is that immigration should be used only to complement the existing workforce in Canada and not to provide a quick source of cheap labour for employers that discourages Canadians from entering the labour market.

We also believe we should rely on our own education and training infrastructure, which is among the best in the world, to meet our labour needs, and we believe it's capable of doing so. We also think we should only rely on temporary foreign workers in exceptional circumstances. It shouldn't have been blown up the way it has in recent years, as almost a first supply of labour for many employers.

For more than 20 years, the performance of immigrants has been deteriorating from what it was in the past. Immigrants were able to come, and after a period of adjustment they were able to gradually adapt and earn as much as other Canadians. It's been only since the Conservative government came in during 2006 that serious efforts have been made to address this problem.

You're all aware of Bill C-51, in 2008, to deal with the huge backlog that had built up following the Immigration and Refugee Protection Act back in 2001. There were three sets of ministerial instructions.

Important measures have been introduced by the government that we think are very good. There is the Canada experience class, particularly recent attempts to put more emphasis on arranged employment and job and language skills in immigrant selection. Also, there are the Bill C-31 reforms to help fight human smuggling and protect Canada's immigration system, and of course the other measures to combat fraud, including marriage and refugee fraud. It's important that people have confidence in the function of our immigration system if it's going to continue to have political support.

Turning now to the immigration policy changes in Bill C-38, part 4, in spite of the steps taken, the backlog problem has persisted. There was no real evidence that the performance of recent immigrants was improving in general, except for maybe those with arranged employment or some of the federal skilled worker groups.

The backlog has threatened to undermine the efforts made in improving immigrant selection. You have a group of people you've committed to bring in who were selected under old rules, and they're getting older every year. You have a waiting time of up to 11 years, so by the time they get here, not only are they unsuitable, but they're much older than optimum immigrants would be.

As I pointed out when I appeared before the committee on immigration and citizenship last October, the only choice the government really had to prevent a further deterioration in immigrant performance and growing claims on the fisc was to legislate away the skilled worker backlog, which is what they're doing in this bill.

The government also needs the authority to deal with the issue of refunding the application fees. The minister of CIC requires the authority to issue the ministerial instructions needed to implement his proposed new immigrant selection procedures, since the old ones weren't working.

9:35 a.m.

Conservative

The Chair James Rajotte

You have one minute left.

9:35 a.m.

Economist, Global Economics Ltd., As an Individual

Patrick Grady

Thus we support the immigration policy measures in part 4 of Bill C-38.

Having said that, I would like to go on and say that more definitely needs to be done to limit the numbers of immigrants, since the large number is what's causing the deterioration in performance. It's not only a selection problem; it's very difficult to select from such large numbers. The government still proposes to bring in 250,000 new immigrants a year and a couple of hundred thousand temporary workers, and it's actually increasing the number of parents and grandparents allowed in at a great fiscal cost.

I estimate it would cost around $6 billion per year if you took the parents and grandparents brought in since 1987. If you took in the 165,000 in the backlog and the ones expected to apply by the year 2020, that would add another $6 billion, making the annual cost about $12 billion.

It doesn't look as though much is being done to resolve that problem.

9:35 a.m.

Conservative

The Chair James Rajotte

Mr. Grady, can I just ask you to briefly wrap up? We're out of time on your presentation.

9:35 a.m.

Economist, Global Economics Ltd., As an Individual

Patrick Grady

I was just going to say that the climate isn't very favourable. There is a lot of pressure for higher levels of immigration. The minister has even talked about increasing numbers to 400,000. In our view, the only way to fundamentally reform immigration is to take the steps the minister has taken, but he also has to cut back on the numbers in the levels plan.

9:35 a.m.

Conservative

The Chair James Rajotte

Thank you.

We'll go to Mr. Kurland, please.

9:35 a.m.

Richard Kurland Policy Analyst and Attorney, As an Individual

Thank you, Mr. Chairman. I know what five minutes means.

The first thing is, who does the business risk of applying to immigrate to Canada belong to? That's the pivotal question. The way our system works, the applicant takes the business risk of applying to come here. Our system allows for immigration law to change with retroactive effect without notice, giving an adverse consequence to an applicant. It is now part of ethical practice at Canada's immigration bar to advise applicants of the business risk of applying. That's the fundamental point.

So when rules change in the interest of Canada, as they have done here, then yes, the individual interest of certain applicants will fall to the wayside, because the interest of Canada will prevail. That's the fundamental point of the changes we're seeing here in the proposed law. Is it right? Is it fair? Others will decide, and that's why there's Parliament to make that balancing choice. Is it legal? You bet.

I would look carefully at how it could come to pass that certain applicants were not aware that they were taking the business risk of applying to come to Canada. What happened?

Shifting gears, because I have under five minutes, there should be some basic consumer protection. We can do better. We can do better by formally putting on the website of Immigration Canada a clear notice that applicants take this business risk. We can also do better by severing or having another look at taking the User Fees Act off the table. The User Fees Act is a fundamental touchstone today for monitoring government service performance and applying to the consumers of government services the right to know how long it will take to get a visa. Members of Parliament are all aware of the strains and stresses.

Those are the two areas I'll illuminate later on today.

9:40 a.m.

Conservative

The Chair James Rajotte

Thank you, Mr. Kurland.

We'll hear from Mr. Lee now, please.

9:40 a.m.

Professor Ian Lee Professor, Sprott School of Business, University Carleton, As an Individual

Thank you.

Thank you for the opportunity to appear. I want to disclose before I present that I have no consulting contracts of any kind anywhere in the world with any corporation or union or NGO or government, and 100% of my income is from Carleton University. I come before this committee prepared, if you will, to speak truth to power.

I was under the understanding...and I could be wrong, but I'm going to be speaking more about CMHC, because I was under the impression it was in other issues in the budget. I apologize if I misunderstood.

My background was as a banker for 10 years in the seventies, as a mortgage manager in the BMO building on Wellington Street, opposite the West Block, which I believe the finance committee is going to be going into soon. Now I'm a professor of business and public policy dealing with fiscal policy, economic growth, deregulation, and issues such as that.

I want to go very macro before I get into the budget. For the first time in 2,000 years, world leadership is shifting from the west to the east. From the time of ancient Greece and the Roman Empire, all the way through to the British Empire and then the American Empire, westerners or occidentals have understood that the west has ruled the world. This is no more. This is coming to an end. This is going to change everything.

That leads to the second transformation, that we in the west, as Governor Carney in his excellent speeches and others have noted, have been living beyond our means for the past 40 years in all the western countries. The bills are now coming due.

The third transformative event is the aging of the boomers, my generation, who, in my view, and that of others, caused the second problem of living beyond our means. Unfortunately, there are countries in southern Europe, and the U.S., that do not understand. They do not know that they do not know that these changes are happening and we must change our policies in every sector. Policies that in the past were used to protect and restrict, grounded in fear, must be transformed to policies that open and expand our economy to make our economy more competitive, more dynamic, and able to address these systemic changes. Budget 2012 is profoundly important for it represents the beginning, I believe, of the undoing and the redoing of many policies in sector after sector.

I want to now deal very quickly with CMHC. It was established in 1946 to help with housing for returning soldiers. Those were laudable objectives, but since then, it's like Topsy; it's just growing, growing, and growing. It's in at least five lines of business: commercial mortgage insurance for high ratio; social housing; economic and statistical analysis, where they have an army of excellent economists and statisticians who analyse market trends across Canada; the green and energy conservation initiatives; and, finally, a market maker as bundler and reseller of mortgage-backed securities.

There are problems. In my judgment, CMHC has a profound governance problem. It's the only insurance company that is not regulated in Canada, even though we believe in OSFI and regulation of financial institutions. Its third problem is that it doesn't really understand it's own business. I say that because in 2006 it attempted to introduce 40-year, zero down payment mortgages. It was only the intervention by then Governor Dodge that stopped this irresponsible decision by CMHC.

Yes, I support in the budget that CMHC must be supervised by OSFI; that is long overdue. Yes, it is a good idea to place ministers on the board. I also agree that banks should not be allowed to ensure conventional mortgages through CMHC and offload risk onto the taxpayer. But my criticism of the CMHC reforms is that they do not go far enough. The government should be the referee of the hockey game, but it should not own one of the hockey teams, for that is a conflict of interest. On a practical level, citizens are at risk for almost $600 billion, or one-third of Canadian GDP. Moreover, CMHC has a competitive advantage over private firms because 100% of its liabilities are insured by the government but only 90% of that of private mortgage insurance companies.

I have two other quick points and then I'll wrap up. On the Investment Canada reforms, if this does come up, moving it a much higher level is a very important step. I support the blue ribbon panel, and we should be implementing those reforms in the blue ribbon panel of 2008.

Thank you.

9:45 a.m.

Conservative

The Chair James Rajotte

Thank you very much, Mr. Lee.

We'll hear from Mr. Waldman, please.

9:45 a.m.

Lorne Waldman As an Individual

Thank you for the opportunity to be here today. It's a privilege to appear before the committee.

Like two of the other speakers, I'm here to talk briefly about the immigration measures, but one thing I want to make clear is that I'm not here to enter into a debate about immigration policy with people like Mr. Grady. I'm here to address what I believe is a simple moral issue, and it's simply this: I think the government has a duty to keep its promises and has a duty to speak in a clear way to all the people it deals with, and to be transparent in its dealings with those it deals with. I'm sure this is a principle that people on both sides of the House would agree with. I believe it should apply to all people Canada deals with, including those who are outside of Canada.

If we talk about the backlog, these people were encouraged to apply and were told they would be processed. Many of the people have received numerous communications since that time and were continuously led to believe that they would be processed.

I understand the government's dilemma. They believe they have a better selection process. As a passing remark, I should say that I've heard that one before. In my 30 years, I think this must be about the seventh or eighth different selection process the government has invented, and it's always the best one, but eventually, a few years later, it's scrapped for something else. But that's not the issue here.

The issue here is that, in my view, the government.... This is where, with all due respect, I disagree with my dear friend Mr. Kurland, in that I believe that the government has a duty to be transparent and clear, and they failed to do so in this case. Because of that, what they're doing is wrong.

I thought the best way to illustrate this would be to tell the story of one of my clients. She sent me an e-mail and gave me permission to read it. This will take me a minute or two to read. I thought it would just illustrate this. She says as follows:

Until today, I can still remember vividly that date of November 17, 2007, even though it was almost four and a half years ago. It was on that date that our family of three—at that time, my son was still in primary school—went to the post office and sent out our application forms, together with the payment, with a great hope for the future. On the way back, we discussed excitedly the new adventure we were going to have in Canada, the new school life, the animals playing around the house, possibly the new member of the family.

I remember that she was from China. Under their one-child policy, she couldn't have a second child in China, so she was hoping to come to Canada so she could have that second child. She had other choices, but she chose Canada. She says:

On November 26, 2007, we got the acknowledgement from the visa office confirming receipt, informing us of the next step, and telling us to start our preparation for moving to Canada. So we were excited and thought that our new life was about to emerge.

We started the preparation. We got to know other applicants through the Internet, we improved our language capacity, and we invested in getting certificates that we knew would help us in our job opportunities in Canada.

Two years from that time, another milestone was reached. On December 4, 2009, we got the request letter from the visa office in Beijing asking us to submit our full package of documents. To us, this is one step closer to the dream come true. We spent enormous time and effort—

—for which they will of course not be compensated, I note.

—in preparing the needed documents. We had to schedule the exams for an English test, travel to different cities to get documents, and we had to ask relatives and friends for support in hard places to reach due to the time constraints.

That's because they're only given a short period of time to get the documents. She continues:

Different from the past two years, where we had kept the application confidential, we had to tell our supervisors and the human resources teams about the move so that they could help us to improve our work experience, and of course that impacted negatively on our career development because companies were no longer willing to invest in our future knowing that we were going to be leaving soon.

Again, we, the family of three, went to the post office and mailed off this package full of joy and full of expectation that soon we would be in Canada. At this time my son was in middle school. We waited and waited and waited, confident in our result, not only because of the waves of affirmation and correspondence we received from the visa office, but also because of the justice and fairness we valued—because that's why we chose Canada as our destination.

I have always trusted that Canada would eventually welcome us, like what the visa office shared with us. It was just a matter of time. Because of that trust, we gave up opportunities to go to other countries, and we could have applied under new streams, but we saw no reason to do so. No one suggested to us that we should. We waited our time in the queue—

9:45 a.m.

Conservative

The Chair James Rajotte

One minute.

9:45 a.m.

As an Individual

Lorne Waldman

I'm almost done.

We waited our time in the queue for more than two years, and because of that trust our careers were affected negatively. And now, four and a half years later, we suddenly got the news on March 29 that our case would be wiped out. We were stunned on hearing that and couldn't believe it. How could a country like Canada, a country that values equity and law, take its promise so lightly?

That is from one of the people in the backlog.

9:45 a.m.

Conservative

The Chair James Rajotte

Thank you, Mr. Waldman.

We'll hear from Ms. Dubois, please.