Immigration: What Choice Do We Have?

culturally neutral

It is a rather sad fact that my generation of Canadians, as Mark Steyn puts it, couldn’t be bothered to reproduce. Which leads to the grand issue of what to do about the missing babies of the Boomers given that those boomers want things like pensions, health care and the pleasures of the welfare state.

The answer which we have been given by out political elite for the last thirty years is “immigration”. Essentially, Canada will fill its baby gap with immigrants and all will be well. Last year we naturalized 260,000 people. As Frau Katze at BlazingCatFur.ca points out, that means that 3/4 of 1% of our total population became citizens in 2014. Which is, by any measure, a lot.

Obviously that level of immigration changes Canada quite radically. Various bits of culture fall away when your city is 50% Chinese. Which is not the end of the world and, for the same reason, the Vancouver Symphony goes from strength to strength. But we are rapidly running out of high end, well educated, entreprenural Chinese and Sikh immigrants. China and India are presenting huge opportunity while Canada is looking economically sluggish.

Rather than reduce immigration Canada has been welcoming immigrants and “refugees” from less dynamic cultures. Immigrants from North Africa, the Middle East and Pakistan are beginning to fill up the available slots. Is this a good idea? I’ll be looking at that in future posts. What I want to think about here are choices.

The elite refrain seems to be that if we want to maintain our welfare system, pensions, healthcare and the like we have simply no choice but to import drafts of tax serfs to make up our declining numbers. Is that true?

Here are a few ideas to extend the independence of the Boomers and reduce the need for immigrants at any cost.

• Postpone retirement to 70 or even 75: the boomers parents are extending life expectancy rapidly. 90 is the new 70. Greater activity, a keener sense of healthy life style choices and, as Doug Coupland put it, “Vitamin D and baby asprin and (mum’s) going to live forever.” Boomers are nuts to be thinking of retirement at 60 unless they really are too sick to work. So don’t. Pushing back the retirement and pension ages saves a lot of pension money and reduces the need to bring in more people.
• Have more children. Not something the boomers can do but our kids can and should. But to do this we need a lot of very family friendly policy. Income splitting is a cute idea but hardly a huge incentive to family formation. Big tax deductions for kids number three, four and five could help a bit. But those are governmental changes.

  What can the average citizen do to encourage a baby boom? Start with your own family. Rather than suggesting that your two precious children wait for the “right” person before they get married, learn from your own couple of marriages and recognize that the “right” person may not show up. Marriage in your twenties with kids shortly thereafter is no bad thing. If it all goes to hell, well, you are really only stuck for 12 to 15 years. But you can also grow up together. So, early marriage.

  Start training your kids early that having children is a joy rather than a burden. And teach them that there is no magic point financially or career wise when having children suddenly makes sense or is easy. Have your kids when you can and as many as you can. Telling your children this can help.

• Where possible transfer wealth early. There are a lot of older boomers whose parents have died and left good big whacks of dough. And those same boomers are coming to the end of their mortgages. Here is a hint: offer your kids some money. And not, ideally, as a loan. An outright gift is more useful. Don’t tie it to real estate either. There is going to be a massive correction in Canadian real estate but even if there wasn’t tying a gift to what is usually a debt and endless expense is a poor idea.

  In general gifts are not taxable in Canada. So, for example, parents could give their kids enough to top up his and her TFSA’s and then an annual gift to let them max out the TSFA contribution room every year. If you do this when your children are in their early twenties they will, fairly quickly (with a balanced portfolio rather than the dumb .5% interest products offered by the banks) have a serious sum of money for the crunch years in their early 30’s. Which will give them the confidence to have kids themselves at a much earlier point.

• Build houses and condos which can adapt to the changing needs and means of families. Everything from in-law suites to legally easy house splitting needs to be done to drive down the price of housing in Canada. Yes there is a correction coming but that does not change the fact there are many cities where housing is unaffordable. Build rental housing for families. Build up market rental housing. Encourage density. Make it possible to rent with a 1/5 of your average income rather than 1/2.

  For this to happen government just needs to step back a bit. Upzone a little, perhaps create a few tax shelters for rental housing. But the goal is not cheap housing per se, rather the goal is family formation.

• Use technology in place of people. A lot of the jobs “Canadians just will not do” should not be done at all by anyone. From self cleaning toilets – already done in Japan – to robotic floor cleaners and fast food “servers” there are lots of jobs which can and will be done by robots. Pushing that sort of technology will reduce the need for more immigrants.

  So will the IT driven revolutions in ordering (see Uber/Amazon) and transportation. Self driving cars and trucks are going to change a lot of how we do business. Again, this is going to displace – probably forever – a lot of people. So plan for that now by reducing the number of people we are importing.

  In 2011 371,000 women worked as retail clerks in Canada. 316,565 worked as administrative assistants, 260,190 as cashiers and 184,720 as general office support workers. Call it million jobs. Men: 285,050 retail clerks, 253,385 truck drivers, 138,435 material handlers, 112,125 food counter attendants and 100,190 store shelf stockers. Call it 800,000 jobs. If robots and IT capture 10% of those jobs per year over the next decade there will be 1.8 million less jobs to be filled. (stats here)

  We could worry about this or we can embrace it and adjust our immigration requirements accordingly.

If you actually look at those numbers seriously and, instead of 10% use 5%, you’ll see that 900,000 low skill jobs are going to get eaten by robots and IT over the next decade. 90,000 a year. Now, look at the naturalized Canadian number for 2014 again 260,000. If half our new citizens are entering the labour force that is 130,000 new workers per year in an economy which will be shedding 90,000 jobs per year. Does that make any sense at all?

I’ll be returning to this over the next year but the next time someone tells you Canada has no choice but to accept whatever immigrants it can attract, at least think about some of the choices we actually do have.