Immigrants who arrived in Canada since 1986 have been less successful economically than those who arrived before that time, Herbert Grubel, Fraser Institute senior fellow, writes in his new study, Canada’s Immigrant Selection Policies.

“Recent immigrants who arrived since 1986 earn less and pay less tax than they receive in benefits from government spending. As a result, they are costing Canadian taxpayers about $20 billion annually,” he said.

Grubel, who is also an economics professor (emeritus) with Simon Fraser University, notes that the current federal government has recognized that these immigrants are not doing as well economically as those who arrived earlier and so it has made a start at reforming the immigration selection process.

“New policies introduced by the government such as more efficient selection processes, better information about candidate qualifications, speeding up the processing of refugee claims, reducing opportunities for fraud, and increasing the financial responsibility of sponsors of parents and grandparents will reduce the burden those groups impose on government services,” Grubel said.

“But the success will depend on enforcement of the new rules.”

Canada selects the largest proportion of its immigrants using an objective points system that reflects the candidates’ education, work experience, language competence, and other indicators that are linked with higher earnings. Individuals selected on this basis are called “principal immigrants” who in 2011 numbered 64,397, representing only 25.8 per cent of all 248,744 immigrants that year. The principal immigrants were accompanied by their dependants (spouses and underage children) numbering 91,724. The government refers to the principal immigrants and their dependants as “economic immigrants” who in 2011 numbered 156,121 and represented 62.8 per cent of all immigrants admitted.

Besides these economic immigrants and their dependants, Canada also admits in smaller numbers asylum-seekers, family members of recent immigrants, and other minor groupings. These basic characteristics of the selection system have been in place since the 1960s and remain unchanged.

To fully eliminate the current fiscal burden, Grubel recommends abandoning the points system and replacing it with pre-arranged contracts for work in Canada as main selection criterion for economic immigrants.

“The government would continue to have important responsibilities under this selection system, such as setting a minimum level of pay to make job offers acceptable for the issuance of immigrant visas, enforcing regulations, and ensuring that the health and security of Canadians are protected,” Grubel said.

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org