Citizenship and Immigration Committee on June 14th, 2017

[The Chair, Liberal, Borys Wrzesnewskyj]

Welcome back. Pursuant to the order of reference received from the House on Wednesday, November 2, 2016, the committee will resume its study under motion M-39, regarding immigration to Atlantic Canada.

We have with us today, from the University of New Brunswick, Mr. Ted McDonald, professor of economics.

By video conference from Halifax, from the Canadian Taxpayers Federation, we have Mr. Kevin Lacey, director, Atlantic.

Welcome gentlemen.

Mr. McDonald, the floor is yours. You have seven minutes.

[Professor James Ted McDonald, Professor of Economics, University of New Brunswick]

Thank you for the invitation to speak to you today and to share some of my thoughts on immigration in Atlantic Canada. I am a labour economist. I have dealt with big data issues for most of my research life, and so much of what I'm going to be talking about today is data-related.

The challenges of an aging population have been really well documented and include decreased local labour supply, decreased local demand for goods and services, decreased tax revenue from most sources, and difficulty providing core services, such as education and health care, among many others.

It is also well known that the Atlantic provinces have on average an older, less skilled, and less healthy population than other Canadian provinces, with higher unemployment rates and lower employment rates. New Brunswick, for example, had an unemployment rate of 8.4% and an employment rate of 56.4% in May 2017, while 19.5% of the population are age 65 or over. The numbers for Canada overall are 6.6%, 61.5%, and 16.5%.

One common response is to promote immigration into the Atlantic provinces, including into the less populated areas as a way to arrest these trends. There is no doubt that immigration is the key driver of continuing population growth in Canada and a crucial component for aggregate economic growth. Immigration itself is not a panacea for Atlantic Canada. It requires an understanding of both the underlying demographic and economic environment and of what motivates people to stay or to move.

On the first point, one key aspect is that Atlantic Canadian provinces also have relatively high percentages of population in rural areas, outside of cities and larger towns. New Brunswick is 48% rural, compared with 19% for Canada overall. The last time Ontario and Quebec were 48% rural was in 1921. Even Saskatchewan, with 33% of its population in rural areas, last had a 48% rural population in 1976.

A second aspect of Atlantic Canada that perhaps is not as well known is that there is a key distinction between the cities and the rest of the Atlantic provinces. If we focus on the cities in Atlantic Canada and compare them with smaller cities elsewhere, say, cities of less than 200,000 people in other provinces, we find that Atlantic cities are doing quite well. For example, in May 2017, the unemployment rate in the Moncton, New Brunswick, census metropolitan area or CMA was 6.1%, and in Saint John 5.6%, compared with 6.7% in Peterborough and 5.6% in Abbotsford. Only 15% of the population of the Halifax CMA is age 65 or over, and 17.6% of the Saint John population is 65 or over, compared with 22.3% for Trois-Rivières and 19.1% for Thunder Bay.

The cities are growing steadily in population as well. Between 2006 and 2016, Fredericton city, where I live, grew by 14.9%, Charlottetown by 12.5%, and Halifax by 8.3%, although Saint John city showed no change. High provincial unemployment rates arise from high rural unemployment rates in Atlantic Canada, for example, 11.8% in P.E.I. and 12.3% in New Brunswick. By way of contrast, the unemployment rate of rural Quebec is 5.4% as of May 2017.

The Atlantic provinces are urbanizing, and immigration on its own will not solve the challenges of rural areas and small towns in these provinces.

Immigrant attraction and retention are complex issues. Much research has gone into understanding what motivates people to move in and move on. One indisputable factor is the importance of the availability of employment. If there is demand in an area, either for employees by firms looking to hire, or for goods and services that are currently undersupplied, or both, then people, both Canadian-born and immigrants, will be attracted to the area.

Employment opportunities may attract people, but they may not be enough to keep them. There would also need to be suitable employment opportunities for spouses, an issue that's often overlooked. Amenities and quality of life are also very important.

For immigrants, of course, there are additional challenges. Employment opportunities may abound, but if credentials are not recognized, and especially if language proficiency is lacking, then jobs will go unfilled. Research has shown that so-called ethnic networks of one's own cultural, linguistic, or ethnic group can play an important role in retaining immigrants. Since Atlantic Canadian provinces do not have a relatively high proportion of overseas-born—around 4%, compared with 20% for Canada overall—these networks can be small.

I'll take a bit of an aside into some statistical discussion. One of the key metrics we look at, one on which New Brunswick is often criticized, is retention rates.

Statistics on retention of immigrants may vary substantially by how retention is defined and by data source. For example, retention statistics calculated based on landing records from IRCC linked to tax records will understate true retention since a substantial number of immigrants whose stated province of arrival is an Atlantic province will, in fact, never land in that province. One study for New Brunswick found that about 67% of provincial nominees whose intended destination was New Brunswick filed tax in New Brunswick after a year, only 67%. However, recent work by my team, using provincial medicare registry data, finds that five years after registering for medicare, more than 70% of immigrants from the U.K. and Europe, 67% of the immigrants from Asia, and about 60% of immigrants from the Mideast and Africa are still resident in the New Brunswick medicare system. It should be noted that about 80% of immigrants to New Brunswick are choosing to locate in one of the three main cities.

On increasing immigration to the region, others, I'm sure, have a lot more to offer on this question than I do, but I would like to emphasize that settlement agencies, integration policies, welcoming communities, and related services, though vitally important for retention, are of little value if there are not also economic opportunities for immigrants.

[The Chair, Liberal, Borys Wrzesnewskyj]

You have 30 seconds, please.

[Prof. James Ted McDonald]

On the Atlantic pilot, one of the major criticisms of the earlier points-based system for federal skilled migrants was the immigration selection process was independent of the immigrant finding a job, meaning many skilled immigrants arrived in Canada to find their credentials were not recognized. I think the Atlantic immigration pilot goes some way to addressing that issue by linking employers with potential employment and immigrants.

Why are these jobs not being filled locally when unemployment is relatively high? There are two reasons: geographic mismatch and skills mismatch. Demand is likely to be high in the cities where unemployment rates are lower. High unemployment rates in rural areas arise from an older, less skilled workforce who have lost jobs in forestry and fisheries and whose skills are not readily transferred.

[The Chair, Liberal, Borys Wrzesnewskyj]

Thank you, Mr. McDonald.

[Prof. James Ted McDonald]

Thank you.

[The Chair, Liberal, Borys Wrzesnewskyj]

Mr. Lacey, you have seven minutes, please.

[Kevin Lacey, Director, Atlantic, Canadian Taxpayers Federation]

Thanks for having me.

For the past 27 years, the Canadian Taxpayers Federation has been fighting across Canada for three fundamental principles: lower taxes, less waste, and more accountable government.

I want to thank the committee for inviting our organization to speak to you today. Over the last few weeks you've heard from many in Atlantic Canada who have outlined the problems all too well. Our population has declined; we are aging, and the cost to provide public services is becoming unaffordable. The solution that many have put forward is to find ways to bring as many new immigrants to the region as possible. This is a laudable goal, but it won't work in isolation from other changes.

Consider this. Between 2011 and 2016 over 31,000 more Atlantic Canadians have packed up and moved to other provinces in Canada than have moved into the region. Here's the problem: if we can't keep native-born workers who have roots here at home, how will we ever retain newcomers who are mobile and can find better opportunities in other parts of Canada? Of course we won't. It's all about the economy, and the Atlantic economy is failing under high taxes, excessive regulations, a failure to explore our natural resources, and costly bureaucracy.

Fix the economy and we can attract thousands home, as well as others from around the world. We are not economically depressed because of our geography or because we possess a culture of defeat. No, it's because the economic policies promoted by the Atlantic provinces and Ottawa, sometimes with the best of intentions, have failed to deliver the results they were intended to. Let me tell you a story about what I mean.

In this region, we have one of the highest unemployment rates. Our young people are moving west because they can't find good, well-paying jobs. At any one time, we have almost 100,000 people collecting employment insurance cheques, yet in this region, we are bringing temporary foreign workers into areas that already have lots of people without work. Why is this? The problem in part is created by a combination of the liberal use of the temporary foreign worker program and the abolishment of changes that tighten the employment insurance rules by both the Harper and Chrétien governments.

Fish plants and other businesses have responded to the labour shortages by demanding more temporary foreign workers. Most immigrants have a path to citizenship and enjoy the same economic freedoms as Canadians, including the right to accept a better-paying job. Temporary foreign workers have no similar bargaining power and are unable to climb the economic ladder. These workers have one option: to work for the company that sponsored them at the pay on offer or to return home.

Former New Brunswick Premier Frank McKenna came before this very committee and argued that TFWs needed a path to citizenship. I agree, but a temporary foreign worker on a path wouldn't be temporary and they would instead be like other immigrants. As it stands, the TFW program is un-Canadian. It is ill-liberal and immoral because it creates a permanent underclass of workers.

The TFW policy also drives down wages and causes more people who are looking for decent paycheques to move to central and western Canada, exacerbating the problems that exist. This in turn reinforces the argument that some Atlantic employers say they cannot find enough local workers, and it increases pressure on Ottawa to further increase the number of TFWs.

The solution is obvious. If workers aren't willing to work for the pay that companies offer, companies need to raise wages and pay a fair wage. It's time we prioritized jobs for Canadians and tightened the rules for temporary foreign workers. This would force companies that right now aren't paying a decent wage to increase their salaries to a true market rate. This would result in more unemployed Canadians being attracted to do the work and earning a decent paycheque doing it.

There are other parts to this. The government should look for ways to incentivize work and to get people off EI. The Liberal government eliminated the requirement for frequent and repeat EI claimants to accept work at slightly less pay and to consider marginally longer commutes to work. These changes were put in place to reverse the growing shortage of workers in areas of the country with high unemployment rates.

Unemployed Canadian workers have choices. They can work for low wages that are kept low by TFW policy, work elsewhere, or work for a few weeks a year and collect EI. In effect, companies are competing with the EI program in order to convince people to come in. Fixing EI is where Ottawa should focus its policy reforms, instead of making it easier to bring in TFWs.

Finally, we need to grow our economy. Our region is uncompetitive when it comes to taxes. An individual in Nova Scotia, for example, earning about $60,000 a year pays $1,500 more in income tax alone than the national average, not to mention the region has some of the highest sales taxes, corporate taxes and other fees.

In summary, there are three recommendations from our organization.

One, tighten the rules for permitting temporary foreign workers in areas of high unemployment. This policy would force companies to raise their pay and do more to hire unemployed Canadians who are currently collecting EI.

Two, as former Liberal Premier Frank McKenna said, reform the employment insurance program, and reinstate reforms by previous governments, both Liberal and Conservative, to encourage frequent EI users to transition back to the labour force. It's all about the economy. We need to promote pro-growth strategies that lower taxes and grow the economy. People don't leave home when they have jobs and opportunity. Solving Atlantic Canada's demographic problems with immigration is just part of the solution—

[The Chair, Liberal, Borys Wrzesnewskyj]

Thirty seconds, please.

[Kevin Lacey]

—but it won't work on its own. We need our friends and family who have gone west to move home. We need our governments to bring in policies designed to grow our economy and realize our true potential.

Thank you.

[The Chair, Liberal, Borys Wrzesnewskyj]

Thank you, Mr. Lacey.

Now we go to Ms. Ludwig for seven minutes, please.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you, both, for your testimony this afternoon.

I'm going to start with Professor McDonald. As we have discussed, I too taught at UNB. In my case it was the MBA program in international trade. I had a great deal of experience working with international students, and so many of them wished that they could have stayed and looked for opportunities in the local communities.

One of the things that I hear clearly from both testimonies is that immigration is not the only answer, but I do believe, based on where I live and the area that I represent, that it is part of the solution. If we look, for example, at Mr. Lacey's comments about tightening EI reform and also tightening the temporary foreign workers program, I need look no further than 2014, when the TFW program was tightened. The program did have issues but when that program was tightened, Paturel, for example, exported a whole processing line to Massachusetts, never to return. That did not create jobs. In fact, it impacted the industry.

If we're looking at opportunities, Professor McDonald, in terms of systemic or structural challenges, what would you say, given the situation in rural coastal communities, about the challenges in transportation, affordable accessible child care and skills training?

[Prof. James Ted McDonald]

The rural issue in New Brunswick is a big challenge and, as I mentioned, we have some of the highest rates of rural residence of anywhere in Canada. The transition to a more urban economy is something that has been really slow to develop in Atlantic Canada, and this is causing a lot of challenges.

So I think, on its own, with an immigration solution to encourage immigrants to move to small towns to settle, if there isn't the steady ongoing employment prospects for themselves and their families, and the social networks and the support networks, they're not going to stay, just like the local youth are leaving our rural areas. It's just not an attractive place, so I think what has been happening, in terms of economic policy in the province, has probably not been that effective, and we can see that from the stats. The populations of these smaller places continue to decline.

To address this, I think we need to move beyond an immigration policy. We need to move beyond a regional economic development policy. We need a strategy that looks at what the real challenges are, what the potential is for these small communities, and it's not going to be a return to the status quo, I feel. But there are lots of other opportunities for these smaller communities to develop in tourism or any other aspects, because the forestry and the fisheries aren't coming back.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

I'm looking, for example, at the area I represent, New Brunswick Southwest, which is very coastal in many areas, deep in the heart of aquaculture, fisheries. We have Connors Bros., Ganong Bros., Paturel, and Cooke's. Certainly some of the work is seasonal, but some of the areas, I would like to stress to both of you, would be not only in the lower-skilled areas but also in the supervisory area.

A lot of work is being done on the ground. For example, in the transportation area there is the Rural Lynx project that we're trying to get off the ground locally. If we look at affordable, accessible child care, the government recently announced $7 billion for that. The other area truly is in skills training. It's so easy, I think, to sit in Ottawa when policies get developed and not take in the geographic parameters when it comes to making policy. It's so easy to sit back and say that a person within a 100-kilometre radius should be taking those jobs. If there's no transportation, there are limitations. These are coastal communities. Many of the jobs are on islands.

In the meantime, when we're all fighting about policies and the best one to fit in, we have employers who are not able to expand or grow. One thing I clearly hear from employers in my region is the opportunity they see in strengthening the structural barriers, and also increasing immigration that is employer-led on specific tasks, specific skills, and growing the two. First and foremost, New Brunswickers would always be the first option.

I can also give an anecdote, as I hear often from the Canadian Taxpayers Federation about cutting taxes. As a small business owner in the riding, even to cut corporate taxes, Mr. Lacey, does not increase our sales. We need more people in our province, more people to be buying, more policies for being more innovative and more diversified. Immigration is an important aspect of that, and there could even be opportunities for migration.

In terms of the immigration policy itself, Mr. Lacey, are you speaking on behalf of your five or six members or did you get a mandate and a policy set forward by all your membership?

[Kevin Lacey]

I appreciate the question put forward by the member, plus I know her area very well.

I know the issue she speaks about at Paturel very well also. A job ad for Paturel last year advertised jobs at $11.25 an hour to $13.95 an hour. These are very low-paying jobs, and so defending a policy that promotes workers from elsewhere coming to take jobs in her riding, which has a very high unemployment rate—

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Mr. Lacey, I am certainly not promoting foreign workers to take local jobs.

[Kevin Lacey]

Could I just finish? The honourable member raised the issue.

You don't have to believe me on this issue. The Auditor General, who's from her home province, raised this in his own report. He said very clearly that 80% of fish processors are laying off workers at the same time as they're using workers from the temporary foreign worker program, which is why there needs to be reform.

As for our—

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Excuse me, I'm just going to cut in because I don't have much time left, Mr. Lacey.

In terms of the temporary foreign worker program, we'd be better off to drop the “temporary” and just have a foreign worker program where there is a path to citizenship, and also help those who don't.... Eleven dollars an hour is not very much money to live on, I agree 100%, but so many people in my communities also focus on the opportunities for skills development and are looking forward to that.

If we look at manufacturing, it has doubled since the signing of NAFTA, but technology has increased exponentially, and we've not kept up with that. I know many people in my area are looking at opportunities that are technology-based, less so in filling positions on food-processing lines. In the meantime, we still have to help our companies move forward, and we have to help our schools expand, our communities stay alive and grow.

Thank you.

[The Chair, Liberal, Borys Wrzesnewskyj]

Thank you, Ms. Ludwig. Your time is up.

Mr. Tilson, you have seven minutes, please.

[David Tilson, Conservative, Dufferin—Caledon, ON]

Thank you, Mr. Chairman.

I'd like to introduce a motion to the committee that is relevant to this study, and which I would like to spend some time on. I hope other members will as well.

This study of immigration to Atlantic Canada is most important. Also, there are numerous motions that have been moved at this committee which have not yet been voted on. There are two studies which require the committee to finalize reports. There are few remaining days left in the sitting of this Parliament. The Minister of Immigration has only appeared before this committee once. He hasn't talked about this issue, Atlantic Canada, nor has he talked about other matters of urgent public policy important for us to consider.

Therefore, I move:

That the Committee reschedule the remaining meetings on the study related to Atlantic Canadian immigration and that the Committee hold hearings in Atlantic Canada in the summer months; and that the remainder of the time this Committee has in this sitting be used to complete our two outstanding reports and have all moved motions voted upon.

[The Chair, Liberal, Borys Wrzesnewskyj]

Thank you.

[David Tilson, Conservative, Dufferin—Caledon, ON]

If I may proceed, Mr. Chairman, I, first of all, want to say—

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

On a point of order, Mr. Chair, it may be a clarification, but I don't believe we received notice of motion with respect to this matter.

[The Chair, Liberal, Borys Wrzesnewskyj]

This particular motion does not require notice because it deals with the matter at hand. It is in order.

Please proceed.

[David Tilson, Conservative, Dufferin—Caledon, ON]

Thank you, Mr. Chairman.

First of all, I want to say to all members of the committee, because I get the impression that you think members of the opposition don't care about Atlantic Canada.... I just want to tell you a bit about my personal background which will show that I do care about Atlantic Canada.

By way of some background, I did my undergraduate degree at the University of New Brunswick. I spent a number of years in Fredericton getting that degree. One of my staff here in Ottawa is a young woman from Moncton who just recently, this past Saturday, got married in Fredericton. My late wife was from Moncton, as well. My wife has relatives buried in Cape Breton. My daughter owns a summer home in Shediac, New Brunswick. My son is a graduate of Dalhousie University. Obviously, I have a number of relatives in New Brunswick. I care about New Brunswick, and I care about the rest of Atlantic Canada.

Having been on this committee for a number a years, I certainly recognize the need for greater immigration to Atlantic Canada. I think we need to spend more time on the many issues that are raised, particularly by the gentleman who is on TV now. He raised some interesting issues, and they're complicated issues.

We need to spend some time in the maritime provinces, in the Atlantic Canadian provinces, to go over the complicated issues of unemployment. Atlantic Canada has the highest unemployment in Canada. How will that affect immigrants coming to the maritime provinces? I think we need to meet some of the.... The Atlantic provinces have a great reputation, perhaps a better reputation than some of the other provinces, in welcoming, for example, Syrian refugees to Canada.

I'd like to hear the views of some of those refugees who have come to Atlantic Canada. Are they getting jobs? I would like to hear from people who have been resident in Atlantic Canada for some time and how new immigrants coming to Atlantic Canada will affect the jobs.

There are very complicated issues. We've heard some testimony already that shows there are problems particularly in the rural communities. Obviously, there is a need for, as my friend across the way mentioned, temporary workers. That's true, but I expect we also have a need for full-time employment.

I think the best thing—that's why the motion, Mr. Chairman—is that we spend some time going to Atlantic Canada. The clerk has already prepared a budget to go there. We've done that. There's still time to make these arrangements. Let's go to Atlantic Canada. Let's spend a little bit of overtime for these people and get our other business done here before we rise.

There's the study on immigration consultants that we're very close to concluding. Let's finish that. It has a huge impact across Canada on the whole immigration system, the problems that we have with immigration consultants. That report is very close to being finished, but if we keep going the way we are, it's not going to get finished before the summer. We may have to continue on in the fall.

There's the LGBTQ study. We've heard the testimony on this. I think we're very close to coming to an agreed-upon report. This needs to be done to protect the world's most vulnerable. We can't just let it lie. The Liberals are raising the pride flag on the Hill right now. Why don't we do something? Why don't we finish this study?

Of course the Atlantic study is important, and I think we need to go there, but these two issues speak for themselves. We should deal with these in the few days that are left before we rise for the summer.

There have been a number of motions that have been made, Mr. Chairman, which haven't been voted on. My friend from the New Democratic Party has made a motion. Michelle Rempel has made a motion. We haven't voted on those motions, the motions dealing with the border crossing crisis, the issue of illegal people coming to the United States and not following the rules that we have in this country for allowing—