Two Simon Fraser University economists are taking on a Fraser Institute report that claims immigrants are a burden on the economy.
In May, the Fraser Institute released a study claiming "immigrants on average received an excess of $6,051 in benefits over taxes paid," for an annual cost of approximately $23 billion.
Burnaby-based professor Krishna Pendakur and local PhD student Mohsen Javdani did some recalculations, used a wider sample size and came up with their own numbers. Their study, titled Fiscal Transfers to Immigrants in Canada, revealed an annual cost of about $450 per immigrant or roughly $2 billion a year -much lower than the Fraser Institute's numbers.
"One of the common issues contested by analysts and policymakers is whether immigrants fully pay - in terms of taxes - for the public services they use," Pendakur said. "We find there is a small shortfall, but fiscal transfers reflect just one aspect of the contribution of immigrants to the Canadian economy. ... Still, a credible estimate of the fiscal transfer to immigrants is useful to focus policy debate."
Javdani said policy-makers should advance programs that help immigrants to succeed in the labour force.
"If you look at the longer term, these immigrants are going to contribute through earning higher incomes and paying higher taxes," he said.
Patrick Grady co-authored the Fraser Institute report, titled Immigration and the Canadian Welfare State 2011, with SFU economics professor emeritus Herbert Grubel.
Grady said the new SFU study came up with varying results because it covered a different time frame than what he had reviewed. Grady said that there was a break in immigration policy some time in the late '80s, and his study focused on post-1987 immigration, when there was a surge of people coming into Canada and the government was less selective about who was allowed in. Grady's study focused on post-1987 immigrants that did poorly in the labour market.
"Nobody denies that in the past immigration was a success," Grady said. "Our view was it broke down because the numbers increased and the source countries changed. ... Third world immigrants have not done as well as the previous immigrants."
To read both studies, go to Jennifer Moreau's blog, Community Conversations, at www.burnabynow.com.
