Fantastic.

Thank you very much for inviting me to appear before this committee today. I am an immigrant, but today I'm appearing as an individual and, more importantly, as a professor of economics. I don't have any personal interest in the matter beyond trying to inform policy with the best available economic evidence.

Many of my comments today are echoed in the short but excellent IRPP article I have shared with you, called “How does increasing immigration affect the economy?” Before I can offer some thoughts on that question, we need to have a common understanding of what our objectives are as policy-makers and advisers. I would put forth that our goal needs to be, purely and simply, to make Canadians better off, and in particular to increase the standard of living of Canadians. If that's our goal, then the key metric has to be GDP per capita and not GDP itself. Canadians have a higher standard of living than the Chinese, for example, because we have a higher GDP per capita. This is perhaps an obvious point, but unfortunately it's one that is often forgotten in the debate.

Now, if we agree that GDP per capita is a key measure of the average economic welfare of Canadians, we can begin to discuss the economic impact of immigration. Let me start with the bad news and then move on to the good news.

The bad news, or the inconvenient truth, is that in Canada, immigration does not appear to have a positive impact on wages, employment or GDP per capita. Study after study by respected and credible academic economists has found either small positive impacts, small negative impacts or, most commonly, no impact at all. Therefore, the strong consensus among immigration economists, people like David Green, Craig Riddell, Mikal Skuterud, Arthur Sweetman and Chris Worswick, among others, is that immigration fundamentally has little to no impact on the economy. This, of course, is in sharp contrast to the narrative that we often hear.

This bad news means two things. First, in Canada immigration does not seem to be a viable way to grow GDP per capita. Second, pro-immigration arguments should be based on factors other than economics.

That brings me to the good news. The good news is that the same studies do not generally find a negative impact of immigration on the economy. That is good news because it's incredibly freeing. It means that we can advocate for immigration based on arguments around human rights or diversity. We don't really have to worry about the potential impacts on the economy.

One important caveat to this point is that existing studies for historical immigration levels are at 0.8% to 1.0% of the population. At higher levels, you might worry about our labour market's ability to absorb more workers, or that we might no longer be admitting the best and brightest. Four years ago, my colleague Mikal Skuterud and I were discussing these uncomfortable facts. We thought maybe previous immigration studies were measuring the wrong thing. Perhaps immigration was having a positive impact on other things, such as innovation. With Ph.D. student Jue Zhang, we spent more than a year collecting and analyzing data. To our surprise, the result was the same. Skilled immigrants to Canada, even those educated in STEM disciplines, seem to have no impact on innovation.

This, I want to point out, is contrary to much of the evidence for the U.S., and highlights the need to inform policy with Canadian and not U.S. or European studies. One of the reasons for the difference, we suspect, is that in Canada, only one in three STEM-educated immigrants were working in STEM, as compared with two out of five Canadian-born and fully one half of U.S. STEM-educated immigrants. In Canada the immigrant engineer driving a taxi is not a cliché. It is a fact. We also, as an aside, found that Canadian-educated immigrants tended to do better than foreign-educated ones, suggesting an avenue for improving outcomes.

Given your particular interest in the impacts of immigration on rural communities, let me end with a few comments in this regard. First, more research is needed on this question. What we do know is that the large majority of immigrants tend to settle in the larger cities. For immigration to have significant impact on rural communities, we would need, A, a way to get immigrants to settle there; B, that they stay in those communities; and C, that they buck the larger pattern of immigration having little to no impact on the economy. Personally, I'm not overly optimistic. In our study that I mentioned earlier, we had 98 Canadian cities, including many smaller ones. We did not see a significant difference between the impacts on smaller and larger cities.

In conclusion, I want to see open and honest dialogue around immigration. Evidence provides a shared basis for open discussion. I hope I have managed to offer a very high-level view of the evidence-based consensus shared among Canadian immigration economists—that is, that immigration has little to no impact on our economy.

Thank you. I would be happy to take any questions.

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