The Economic Goals of Canada's Immigration - Green, Green
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Canadian Public Policy
The Economic Goals of Canada's Immigration Policy: Past and PresentAuthor(s): Alan G. Green and David A. GreenSource: Canadian Public Policy / Analyse de Politiques, Vol. 25, No. 4 (Dec., 1999), pp. 425-451Published by: University of Toronto Presson behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3552422.
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8/10/2019 The Economic Goals of Canada's Immigration - Green, Green
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h e Economic G o a l s
o
Canada s
mmigration
o l i c y
a s t a n d
resent
ALANG.
GREEN
Department
f
Economics
Queen'sUniversity
Kingston,
Ontario
DAVID
A. GREEN
Department
f
Economics
University
f
British
Columbia
Vancouver,
ritishColumbia
Nousexaminons
es
objectifs
6conomiques
e la
politique
ctuelle
d'immigration,
insi
que
e
r61e
de
l'immi-
gration
dans
l'ensemble
des
politiques6conomiques.
Nous
commenqons
ar
decrire
es
objectifs
6cono-
miques
de
la
politique
d'immigration
u coursdu dernier iecle. Nous
decrivons nsuite es
elements
cibles
6conomiquement
ar
a
politique
d'immigration
n les reliantsaux
tendances
istoriques.
inalement,
ous
examinons
n ensemble
d'objectifs
6conomiques
otentiels
pour
a
politiqued'immigration ui
sont
sugge-
r6s
par
'histoire
politique
canadienne.
En
conclusion,
l
apertque
les
objectifs
6conomiques
e devraient
pas constituer'orientationde base de la politiqued'immigration ans un avenir mmediat,card'autres
politiques
mieux
adaptees
euvent
tteindre es
objectifs.
L'immigration
evrait ontinuer
d'8tre
un
6l6ment
de
base
de
notre
structure ociale.
We examine he
economic
goals
of
current
mmigration olicy
and whatrole
immigration
hould
play
in
overall
economic
policy.
We
proceedby
describing
he economic
goals
of
immigration olicy
throughout
this
century.
We
then describecurrent
conomically
argeted
lements
of
immigration
olicy
and
relate
themto
historical rends.
Finally,
we
examinea set of
potential
conomic
goals
for
immigration uggested
by
Canada's
policy
history.
We
conclude hateconomic
goals
should
not
form the
defining
orientation
f
immigration olicy
in
the near uture ince other
policies
are better
ituated o
meet those
goals. Immigra-
tion should
continue
as a
defining
element
n
our social fabric.
INTRODUCTION
Canadian
immigrationolicy
s
currently
he
o-
cus of
considerable ebateand is
in
the
pro-
cess
of
being
reviewed
by
the federal
government.
The
key
question
n
the debate s what
should
be
the
goals
of our
mmigration olicy.
Once
hat
ques-
tion
is
answered,
ther
questions
uch
as
how
to set
the
size and
composition
f
the nflow
should,
hope-
fully,
be easier o answer.A
variety
f
potential
oals
present
hemselves:
umanitarian
oals
suchas
help-
ing
refugees
and
reuniting
amilies
in
Canada,
o-
cial
goals
such as
altering
he
nature
of
Canadian
society,
and
goals
related to
foreign
policy.
For
Canada,
hough,
one of
the main
uses of
immigra-
tion
policy
in the
past
has
been as a
tool
of
eco-
nomic
policy.
In
this
paper,
we examine
the eco-
nomic
goals
of current
mmigration
olicy
and the
CANADIAN
PUBLIC POLICY
-
ANALYSE
DE
POLITIQUES,
VOL.
XXV,
NO.
4
1999
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426
Alan
G.
Green
and David
A.
Green
role
immigration
hould
play
in overall economic
policy.
To do
this,
we
argue
hatone must
consider
current nd
potential
goals
inthe contextof the
his-
toric goals of immigration olicy.This is true,in
part,
because the debate
on current
mmigration
policy
often refers o
historic
precedent
s a source
of
justification
or
particular
ptions.
This
usage
of
historical
rgument
eflects
he fact that or a
policy
such as
immigration
where he
potential
ffects are
both
arge
and
subtle,
he main
basis
or
understand-
ing
its
impact
must
be
in
our own
history.
Thus,
we
believe that
understanding
ow
immigration olicy
has been used
n the
past
s a
necessaryprecursor
o
discussinghow we want o use it in thepresentand
future.
Further,
nowledge
of
past goals
of
immi-
gration
policy
allowsus to understand
hether ur-
rent and
potential
policies
are
radicalshifts from
whathas been deemed
conomically
nd
politically
feasible n the
past.
To the extent hatnew
policies
represent
adical
hanges,arguments
n
their avour
bear a
greater
burden f
proof.
We
proceed
through
our examination
n
three
steps. First,we describethe economicgoals pur-
sued
by immigration olicy
fromthe earliest
years
of this
century
o the
present.
Second,
we
describe
current
conomically argeted
lementsof
immigra-
tion
policy
and relate hemto the
historical rends.
Third,
we
examinea set of
potential
conomic
goals
for
mmigration
olicysuggested y
Canada's
olicy
history.
Our
aim is not
to determinewhether
ach
potentialgoal
is reasonable n
itself but to
decide
whether
mmigration
s the
best meansof
attaining
that
goal.
We
argue,
irst,
hatCanada's
mmigration olicy
history
up
to the
late 1980s can be
summarized s
alternating
eriods
of
large
nflows
targeted
t
spe-
cific economic
goals
and
periods
of virtual shut
down of
immigration
n
the face of
poor
domestic
labourmarketconditions.Most
importantly,
co-
nomic
goals
formed
a central
orientation f immi-
grationpolicy throughout
much
of
the twentieth
century.
Second,
recent
policy departs
harply
rom
our
history
in not
substantially
educing
nflows
despitehigh
and
persistent nemployment
ates.
The
specific
economic
goals
of the
policy
are also
not
well
specified,
n
contrast
o
the
past.
This
raises
thequestionof whethermmigration olicyshould
return o its focus on economic
goals
and,
f
so,
on
which
goals. Using
a combination
f current mmi-
gration
esearch
nd
comparisons
o historical
pat-
terns,
we do not finda
strongargument
n favour
of
using immigration
or
virtuallyany
of
a consider-
able
list
of
potential
conomic
goals.
Our
argument
is
less that
mmigration
s
not
useful for
such
goals
as
buildingup
the stock
of human
capital
in the
economy
than
that other
policies
are
superior
or
meetingthose goals. Ourconclusion is that eco-
nomic
goals
shouldnot form
the
defining
orienta-
tion
of
immigration
olicy
as we
move nto the next
century.
That does
not
mean, however,
hat immi-
gration
shouldbe
stopped.
There
is
also
no
clear
evidenceof
large
economiccosts to
immigration,
t
least as
long
as
it
is well
managed.
Thus,
the
best
immigration
olicy
for
Canada
ppears
o
us
to be
one that
focuses
on
humanitarian
oals
while
pay-
ing
attention
o short-term
osts
of
immigration
n
theCanadianabourmarket.mmigrationn thelast
20
years
has
played
a
significant
role in
defining
Canada
as
a
country
with
a
richly
diversifiedcul-
ture
and,
hrough
efugeepolicy,
as
a
generous
oun-
try.
Those should
continue o be
its main
goals.
Finally,
we do not
pretend
o do
an
adequate
ob
of
placing mmigration
n the
contextof
political,
social,
and
cultural rends.
Our aim is
to
discuss
immigration
s
an
economic
policy.
We
strongly
encourage
eaders o seekout work
by
authors uch
as
Abellaand
Troper
1983);
Avery
1979);
acovetta
(1992);
Ramirezand
Del Balso
(1980);
and
Rich-
mond
1967)
in
order o
understandhe
importance
of
immigration
o
Canada
n
a
widercontext.
THEHISTORIC
OALSOF CANADIAN
IMMIGRATION
OLICY
In
this
section,
we
describe he main
economic
goals
addressed
by
immigrationpolicy
over
Canada's
CANADIAN UBLIC OLICY
ANALYSE E
POLITIQUES,
OL.
XXV,
NO.
4
1999
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TheEconomicGoals
of
Canada's
mmigrationolicy:
Past and
Present
427
history.
We describe he
goals
within
each of a set
of
periods,
wherethe
period
endpoints
are defined
by
majorchanges
n the stated
goals
of the
policy.
We do not
attempt
o
assess whether
he
policy
was
successful
in
meeting
each of these
goals.
We are
more
concerned
withhow
mmigration
asbeen
per-
ceived
as an economic
policy
tool
andhowthat
con-
ditions our current
ptions.
Before
beginning
on our
investigation,
we
pro-
vide some definitions. t
will
prove
usefulto follow
Freda
Hawkins
(1972)
in
dividing
the economic
goals
of
immigration olicy
into short-
and
long-
term goals. We will categorizeachievingdemo-
graphic
benefits
those
relating
o size
and
age
com-
position
of the
inflow),
benefits from
general
m-
migrant
characteristics uch as
flexibility,
and in-
vestmentand rade low benefitsas
long-term oals
of
immigrationpolicy. Achieving
benefits from
meeting
mmediate
hortages
n
the labour
market,
we will
categorize
as short-term
oals.
As we shall
see,
the
setting
of Canadian
mmigration
olicy
has
often reflected
a basic
tensionbetween
using
mmi-
grationas a tool for promoting ong-termgrowth
and
using
it as
part
of short-term
abour market
policy.
However,
he two sets of
goals
are not al-
ways
in conflict and
n
fact
overlap
at times.
The
pursuit
f
these various
goals
is conditioned
by
attempts
o minimize he
potential
costs
of
im-
migration.
Thus,
a
defining
feature of
Canadian
immigration olicy
has been a
concern hat
the
in-
flows not exceed the
absorptive
apacity
of the
economy.According o thisconcept, he idealrate
of
absorption epends
on the
ability
of
the
economy
to
provide
employment
or
new
immigrants
t the
prevailing
ominal
wage
(see
Timlin
1960).
Hence,
in
periods
of
rising
unemployment
he
absorptive
capacity
or new
immigrants
eclines and
the
gov-
ernment
akes
steps
to
limit the
number
f arrivals.
This
policy
is reversedas
the
domestic abourmar-
ket
tightens.
This is
a
recognition
hat
arge
mmi-
grant
nflows
may displace
native-born
workers n
the hosteconomy n the shortruneven if thereare
offsetting long-run
benefits from the
inflows. In-
deed,
the
concept
of
absorptive apacity
s
probably
more
strongly
related o short-termhan
ong-term
goals:
if
the
government
s
using immigration
o
meet excess demand or
specific occupations
hen
by
definition he
absorptive apacity
of the
economy
is
being
considered.
Similarly,
f the
government
s
pursuingprimarilyonger
term
goals
then it is
less
likely
to
respond
o short-term ost
considerations.
1870-1913
This
was the
period
which,
aftera slow start
during
the last decadesof
the nineteenth
entury,
aw the
settlementof the
west,
high
levels of
investment,
rapideconomicgrowthandthe establishment f a
national
economy.
During
hese
years,
and
indeed
up
to
1930,
immigration olicy
was
part
of a
gen-
eralset of
national
olicies.
These
ncluded hecom-
pletion
of three
transcontinental
ailways,
he
im-
position
of
high
levels
of
protection
n
the
import
of
secondary
manufactured
oods,
and he
adoption
of a
land
policy
aimed at
inducing mmigrants
o
settle n the
west.As a
set,
these
policies
weremeant
to tie
Canada
ogether
nto an
integrated
whole
with
a strongeasternmanufacturingector selling its
wares o an
expanding
western
esource ector.
The
promotion
f
immigration
was
clearly
an
important
element
in
this
development trategy.
Faced with
large
immigration
nflows
from the
United States
and
overseas
starting
n
1896,
the
government
was
forced to
replace
the
original
Act
of 1869 with
a
new
Act in
1910.The new
Act included
a basic
ap-
proach
of
focusing
on a
prospective
mmigrant's
country
of
origin;
an
approach
hatwas
unchanged
until a non-discriminatoryet of regulationswas
created
n
1962.
The
stated
oal
of
immigration
olicyup
to World
War
was to secure
armers,
arm
workers,
and
fe-
male
domestics.The search
or such
workerswas
to be
concentratedn
Britain,
he
United
States,
and
northwestern
Europe.
n
actual
act,
despite
he
pub-
lished
goals
of
seeking only
farmers or
the
west,
the actual distribution
of
immigrants
was
about
equallydividedamongthose intending o work in
agriculture,
manufacturing,
nd
the service sector.
CANADIAN
PUBLIC
POLICY
-
ANALYSE DE
POLITIQUES,
VOL.
XXV,
NO.
4
1999
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428 AlanG. Greenand David
A.
Green
Moreover,
mmigrants
were destined
o all
regions
of
Canada,
not
just
the
west
(Green
and
Green
1993).1
Further,
whenexcess demand or labour
n-
creased
in
this first
period,
the
government
was
forced o abandon
ts
racist
goals
to
someextent
and
expand
recruitment
eyond
the
traditional
ource
countries.
Specifically,
his meant
bringing
n
im-
migrants
rom
Central
and Eastern
Europe Avery
1979).
1919-1929
During
his
decade he official
immigration
egula-
tory
structure
was
put
in
place.
The
first
major
changecame with the 1919 revisions o the 1910
Immigration
ct.
These
revisions
established
lit-
eracy
test
for
all
prospectivemmigrants;
xpanded
the termsof section
38 of
the 1910
Act to allow
the
government,
hrough
Order-in-Council,
o
limit
the
numberof
immigrants
dmitted
n
a
given
period
and to refuse
admissiondue to
conditions
tempo-
rarilyexisting
n
Canada ;
ndadded
he
word na-
tionality
o that of race
o define
the
origin
of
immigrants.
he
net
effect of these
changes
was to
expand hepowerof thegovernmentverthelevel,
timing,
and ethnic
composition
f
immigration.
This
period
witnessed he first
official
division
of
source
countries nto
preferred
nd
non-preferred
groups;
a division
thatwas to
form he core
of Ca-
nadian
mmigration
policy
until
the
early
1960s.
Admission rom the
preferred
ountries
was
based
solely
on
country
f
origin.2
Prospective
mmigrants
from
non-preferred
ountries
were
admitted
under
a varietyof conditions.Applicants rom northern
andwestern
Europe
weretreated s
almost
equal
o
those
from
preferred
ountries,
while
those from
central,eastern,
and
southern
Europe
aced stricter
regulations.
mmigrants
rom
other
regions
were
admitted
nly
if
sponsored
y
a
relative
already
e-
gally
admitted o
Canada.
In
1925,
ust
two
years
after he
formaldivision
of
countries ntothese two
categories,
he
govern-
mentpassed heRailwaysAgreement,harteringhe
two
major
railway companies
(the
CPR
and the
CNR)
to, recruit,
ransport
nd
place
in
Canada,
agricultural
amilies,
arm abour
nddomestic
erv-
ants. The
agreement
imited
heirsearch or
immi-
grants
o central
and eastern
Europe.
The
pressure
to extend he search
nto
non-preferred
ountries
n
this
way
arose from the
scarcity
of farm abour
n
traditional
ource ountries
e.g.,
Britain
nd
he
US)
coupled
with
growing
demands
or such
workers
from the
west.
Thus,
supply
considerations
orced
the
government
o alterits official
goals.
Recent
work
Green
1994)
ndicates hat
his
policy
of
steer-
ing
immigrants
o the west
was
highly
successful.
TheperiodustfollowingWorldWar is alsothe
first time in which the
government
ormally
ac-
knowledged
he
concept
of short-run
bsorptive
a-
pacity.
n
1918,
he
government
stablished
he
Em-
ployment
Service
Council
a federal
body
with
a
mandate o control he
level of
immigration.
he
concept
of
absorptivecapacity
was
first
imple-
mented
n 1921 when
the
government
efused,
n
the face of
rising
unemployment,
o
issue
applica-
tionsto
employers
wishing
o
bring
n
foreign
work-
ers. This,combinedwith the RailwayAgreement,
signalled
a move
towardactive
intervention
n
the
selectionof
immigrants
y
the
government,
ven if
it
used
other
gents
oractual
mplementation.
teer-
ing
immigrants
o
specific
sectors
and
regions
was
part
of
the stated
government
olicy
from the
late
nineteenth
entury
ut
apparentlynly
becamea fact
after
1919.
The
1930sand
1940s
Afteralmostsix decadesof activelyrecruitingm-
migrants,
he door
closed
to most
newcomerswith
the
passage
of
Order-in-Council PC
695 on
21
March
1931 and
remained
hat
way
until
after
the
end
of the
Second
World
War.
Figure
1,
in
which
we
plot immigration
s a
percentage
f
the current
population
ver
time,
shows
that
immigration
ell
to near
zero
as
a
percentage
f the
population
f the
time.3
Immigration
as closed off
from the whole
world,
with he
exception
f
Britainand
he
US,
and
with theoccupationxceptionof farmerswithcapi-
tal. Even n
these
difficult imes
amily
reunification
CANADIAN
PUBLIC
POLICY
-
ANALYSE DE
POLITIQUES,
VOL.
XXV,
NO.
4
1999
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The
EconomicGoals
of
Canada's
mmigration
olicy:
Past andPresent
429
FIGURE
Immigration
s
a
Percentage
fthe
Current
opulation,
anada,
896-1997
5.5
5.0
4.5
4.0
3.5
3.0
0
4
2.5
2.0
1.5
1.0
0.5
0.0
1905
1915 9251935
1945
1955
965
1975
1985
1995
005
Year
was a
priority,
lthough
his
right
was
narrowly
im-
ited
to
include
only
immediate
amily
members
who
would
not
directly
enter
he
labour orce.
The new
regulations
were a reaction o
extreme
economic conditions.
By
1931 the
unemployment
rate
stood at over
11
percent
and,
although
he
offi-
cials of the
time did not knowhow
long
these con-
ditions wouldprevail, he situationwas suchthata
policy
shift of this order
of
magnitude
eemed
us-
tified.
Nation-building,
which had been of
key
im-
portance
o the
government
rom
1870 to
1930,
had
been
replaced
by
preserving
he
nation n the face
of
this
major
depression.
This was then
ollowed
by
a
restrictive
olicy
dictated
by
the
exigencies
of war.
1946-1962
Immigration olicy
in the immediate
postwar
pe-
riod was dominatedby two mainevents.The first
was
the
large
influx of
displaced persons
from
Europe.
The
second was the
establishment
f clear
ethnic and
economic
goals
for
immigration olicy.
The
displacedperson
low fit with
the broad thnic
targets,
ince
most
of those
accepted
werefromEu-
rope,
but
was sometimes
n
conflict
with the eco-
nomic
goals.
The tone
of
immigration
egulations
or the
dec-
adeanda halffollowingthe end of hostilitieswas
set
by
Mackenzie
King's
statement
efore
he
House
in
May
1947. It
is worth
repeating
n
some
detail
since it was a
blueprint
or
government
olicy
on
this issue.
The
policy
of the
government
s to foster
the
growth
of the
population
f Canada
by
the en-
couragement
f
immigration.
The
government
will
seek
legislation,
regulation
and
vigorous
administration,oensure hecareful electionand
permanent
settlement of
such numbers
of
CANADIAN
UBLIC OLICY
ANALYSE E
POLITIQUES,
OL.
XXV,
NO. 4
1999
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430 Alan G. Greenand DavidA. Green
immigrants
s can
advantageously
e
absorbed
in our
national
conomy....
There
will,
I
am
sure,
be
general agreement
with the
view that
the
people
of Canada o not
wish,
as a
resultof mass
immigration,
o make a fundamental
lteration
in the character f our
population.
Large-scale
immigration
rom the
Orient
would
change
he
fundamental
omposition
f the Canadian
opu-
lation
(Quoted
n
Green
1976,
p.
21).
The statement as
six
main
components.
irst,
m-
migration
was
to be
used to
promote
population
growth.
Second,
immigration
would
improve
he
standardof living of the extantpopulation.This
would
operate
y
enlarging
hedomestic
market,
hat
is,
by
promoting
conomies
of scale.
Third,
mmi-
gration
was
to be selective.
Fourth,
mmigration
as
to
be related
to
the
absorptive
capacity
of
the
economy.
Fifth,
mmigration
was
to
be a
matter f
domestic
policy,
hat
s,
national oncernswere
para-
mount. Sixth,
immigration
hould
not
change
the
basic
character f the
Canadian
opulation,
mean-
ing
thatrestrictions
n Asian
mmigration
must
re-
main n place(see Hawkins1972).
The statement ontaineda
potential
ension
be-
tween
the
main
goals
of
immigration
olicy.
It
en-
compassedong-run
enefits
i.e.,
population rowth
and economic
development),
while
reaffirming
he
government's
ommitment o
matching
short-run
labourmarket onditions.As
in
the
1920s,
no
real
tension existed
in
the
immediate
postwarperiod
becausethe desired
mmigrant
was
essentially
un-
skilled.Thepolicywas dominated yhighdemand
for labourers
n the
booming
resource
ector,
par-
ticularly
n
forestry
and
mining.
Thus,
the
govern-
ment
could
increase
he
population
ize
and
meet
perceived
labour
shortages
at the
same time
(Hawkins1972).
However,
upply
constraintsrom
traditional
ourcecountriesmeant hat
the
govern-
ment
had to
partially
bandon he racist
elementof
the
policy
and extendits search
to
non-preferred
countries
Richmond
1967).
It did this in
part
by
relaxingconditionsof acceptance or immigrants
from
non-preferred
ountries
nd
partlyby
expand-
ing
the
sponsorshipights
f
immigrants
rom
entral,
eastern,
nd
southern
urope
o
parallel
hose
avail-
able o
immigrants
rom raditionalource
ountries.
The extensionof
sponsorship
ights
to
landed
immigrants
romnon-traditional
ources n
Europe
created
difficulties.
Landed
mmigrants
rom
south-
ern
Europe,
nd
Italy
n
particular,
eremuchmore
likely
to make
use of
sponsorship ights
han mmi-
grants
rom
raditionalourcecountries.The
result
was a much
moreunskilled nflow
beginning
n
the
late
1950s
(Green
and
Green
1995).
This
occurred
just
at a time of
economic
policy
change
as
the
governmentought o steer heeconomyawayfrom
a resourcebase and
towarda modern
manufactur-
ing
structure. s
part
of this
change
n
direction,
t
was
argued
hat
Canada
eeded
killed
workers
nd
needed hem
mmediately.
o
accommodate
onger
term skill
requirements,
he
postsecondary
duca-
tion
system
was
to be
expanded,
but the
more
m-
mediate
needs would have
to be met
through
immigration.4
Thecontrast etween helarge,unskilled nflow
and
the
goal
of
raising
the
skill
level
of the
workforce
reated
he first
substantial
ension be-
tween
the short-
and
long-term
goals
of
immigra-
tion
policy.
This
tension had
a
direct
nstitutional
embodiment n
the two
departments
ealing
with
immigrants
n
this
period.
The
Department
f
Citi-
zenship
and
Immigration
ook a
longer
run
view,
while
the
Department
f
Labour
ttempted
o tie
the
level of
immigration
o the
business
cycle
and,
moreover,o specificoccupational ob vacancies.
Hawkins
1972)
argues
hat,
nstitutionally,
he late
1950scanbe
seen
n
terms
of a
battle
between hese
two
departments.
rom he
onger
erm
view of
Citi-
zenship
and
Immigration,
larger,
ess skilled in-
flow
wasnot
necessarily
troubling
utcome.How-
ever,
for the
Department
f
Labour,
t
was a
disas-
ter,
especially
coming
as it
did at a
time of
rising
unemployment.
The
justification
or
immigration
s a meansof
filling
skill
gaps
is
significant
ince it
recurs
many
CANADIAN
UBLIC OLICY
ANALYSE
E
POLITIQUES,
OL.
XXV,
NO.
4
1999
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TheEconomic
Goals
of
Canada's
mmigration
olicy:
Past
and
Present
431
times
in
the
next three
decades.5
This
approach
points
to an
implicit input/output
model
of
the
economy
in which
production
s
hampered
f
one
importantactor
s
missing.
The idea
of usingim-
migration
o
prevent
hat
problem
s at
the heartof
the selection
system
created n the next
period
we
consider. t
did, however,
ncrease
potential
upply
problems
ince
the world
supply
of
skilled
workers
was less thanthat
of
unskilledworkers.
1962-1973
In 1962the
government
bandonedts
long-standing
racist
immigrationpolicy.
Henceforth,
admission
was to be basedon anindividual's ersonal harac-
teristics,
especially
heir
education nd
otherskills
qualifications,
atherhanhis or her
nationality.
his
is
clearly
set out
in
the 1962
policy
statement
by
the minister
of
immigration
nd
citizenship,
Ellen
Fairclough:
The
key
to
our
immigration
olicy
will
be the
consistent
application
f
proper
election
stan-
dards
designed
o
bring
he best
possible
settlers
to Canada.amsureallCanadiansgree hatonce
thesestandards reestablished
hey
shouldbe
ap-
plied
consistently
o all who
seek
admission
o
this
country, xcept
where
the admission
of the
immigrant
s basedon
compassionate rounds
r
on close
relationships
Quoted
n
Green
1976,
p.
37).
The lack of mention f
population rowth
s a
main
goal
is
in
striking
ontrasto Mackenzie
King's
1947
statement.Theemphasison selectionstandardsn-
dicatesa
victory
or
the short-run iew of
immigra-
tion
policy championed
n the
Department
f La-
bour.
ndeed,
even the
elimination
f
the
racistbias
in
the
policy
could be seen
cynically
as an
attempt
to
expand
he searcharea n
response
o
inadequate
supplies
of skilled
immigrants
from
traditional
sources. This
victory
was consolidated
with
the
amalgamation
f the
Department
f
Citizenship
nd
Immigration
nd he
Department
f
Labourntothe
Department
f
Manpower
nd
Immigration
n 1966.
The new
department
as
primarily
oncernedwith
linking
he level and
composition
f
immigration
o
the immediate eedsof
the domestic abour
market
(see
Hawkins
1972,
pp.
127-31).
The
shift n
policy
wasnot without
omplications.
Eliminating
acism n
selection meant
that
immi-
grants
from all
parts
of the
world
gained
greater
sponsorship ights.
As
immigrants
rom
countries
with
ower
average
ducation evels
exercised hese
rights,
the
result
could have been
an
increasingly
unskilled
nflow.
Also,
the new
selection
standards
were not well
specified,
mplying
hat
considerable
discretionary
ower
was
being
placed
n
the
hands
of overseas mmigrationfficers.
The
solutioncame
n
1967 with
the
introduction
of
the
point
system
(Order-in-Council,
October
1967,
PC
#
1616).
The
point
system
provided
an
objective
scale based on
education,
ge,
language,
etc.
against
which
applicants
or
admissioncould
be assessed.It
was the
first
major
tep
to limit
the
discretionary
owers
of
immigration
fficersand o
provide
them
with a
set
of
explicit
guidelines.
Applicantswere divided into three main entry
classes:
independents,
whose
admission
depended
solely
on
an
assessmentunder the
point system;
nominated
elatives,
who were
assessed underthe
point
system,
but
were
given
bonus
points
basedon
family
ties;
and the
family
class,
who were
admit-
ted
based
solely
on
kinship
ties.
The
family
class
was to
be
given
top
processing
priority.
Witha
total
number f
immigrants
oughly
ixed
by
the size of
the
budget
allocated o
processing pplications,
his
meantthatassessed mmigrantswereeffectivelya
residual
under he new
system.
This
was not
an im-
mediate
issue,
as
the
assessed
part
of
the inflow
made
up
over 70
percent
of
immigrants
n
the
re-
mainderof
this
period
Wright
and
Maxim
1993).
This feature
was to
become
very
important,
ow-
ever,
when the level
of
immigration
was
cut in
the
recessions
ahead.
The form
of the
original
point system
ndicates
success for those who
viewed
immigration
as an
immediate
abourmarket
olicy.
The
points
assigned
CANADIAN
UBLIC OLICY
ANALYSE
E
POLITIQUES,
OL.
XXV,
NO. 4
1999
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432
Alan
G. Greenand David
A.
Green
to
specific occupations
were to
be
kept
under on-
stant
review and
changed
as
new
information n
vacancies
became
available.
n
fact the
changes
n
point
levels
assigned
o
specificoccupations
were
distributed
o overseas
agents
on a
quarterly
asis
(Green
andGreen
1995).
This was the
ultimate ic-
tory
of
the belief
that
mmigration olicy
could be
micro-managed.
able
1
provides
he
distributionf
points
acrossassessed
categories
n
versionsof
the
point
system
rom
1967
to
today.
n
1967,
an
appli-
cant needed 50 out of a
possible
100
points
to
be
admissible.Of the total
possible
points,
40
percent
were based
on
assessmentof
predicted
hort-term
successin the applicant'sntended ccupation nd
destination.6
his was balanced
by longer
ermad-
justment
actors,
such as
education,
mplying
hat
the
short-term
oint
of
view
had not won
an abso-
lute
victory.
1974-1985
Thiswas a
period
f
big swings
n
thebusiness
ycle.
Immigration
nflows were
adjusted
accordingly.
Immigration
ell
between1974and
1978,
rose from
1978to 1980 andthen fell from1980 to 1986.The
major wings
n
the level
of
business
activity
n
this
period
were the
first
real test of
the
efficacy
of the
new
regulations overning
dmission.
n
some
ways
they
failed since
applicants
could obtain
enough
points
based
on
years
of
schooling,
age,
and lan-
guage facility
to
meet
or
exceed the
minimum
e-
quired
oradmission ven
hough
heir
pecific
kills
might
be
in
excess
supply
at
the time.
This failure
indicates he
difficulty
of
trying
o
controlboththe
level andcompositionof the skilledcomponent f
the inflow with
points
assessed for
personal
har-
acteristics.
The
governmentesponded
y
imposing,
in
1974,
a
ten-unit
penalty
n
points
assessment
f
the
applicant
did not have
previously rranged
m-
ployment.
The
system,
however,
wassuccessful n
reducing
he number f
unskilledworkers
dmitted
to Canada
Green
1995;
and
Green ndGreen
1995).
Although
he
regulations
stablished
n
the 1960s
remainedargely ntactduring his nextperiod, he
government
id
bring
n a new
Immigration
ct
on
10
April
1978.
ThisActdefined hreemain
goals
of
immigration olicy:
(i)
to facilitatethe
reunion
n
Canadaof Canadian esidents with
close
family
members rom
abroad;
ii)
to
fulfil
Canada's
egal
obligations
with
respect
o
refugees
and
uphold
ts
humanitarian
raditions;
iii)
to
foster
the
develop-
mentof
a
strong
andviable
economy
n all
regions
of
Canada.Under
hese
provisions amily
members
and
refugees
were
given
top processingpriority
nd
Canada
was
committed
o
bringing
n a
substantial
numberof
refugees
every year,
rather han
ust
in
emergency
ituations.This forceda
reduction
n
the
shareof
immigrants
who were
assessed
and
repre-
sented a shiftawayfrom a policyfocusedon eco-
nomic
goals.
Concerns
ver
meeting
hort-term
abourmarket
goals
and over
absorptive apacity
did not
disap-
pear,
however.
The
first
concernwas met
by
focus-
ing
on
applicants
ith
arranged
mployment
r those
who
could
be
directed o
specific
occupations.
Ab-
sorptive
apacity
oncerns
were
met
by
altering
he
size
of the
ini??w
in
response
o
cyclical
fluctua-
tions.The argest djustmentsccurrednMay1982
when
the
government
eclared hat
the
only
inde-
pendent
pplicants
who could
enterwere
those with
arranged
mployment.
At the
same
time,
the
gov-
ernment
nnounced
ubstantial uts in
the level of
the inflow
which were
implemented
n
the follow-
ing year
and
remained
n
place
or the
following
our
years.
These
adjustments
ndicate that
short-term
economic
goals
still
held
precedence
n
this
period.
Nonetheless,
economic
goals
took a
back
seat to
humanitarianoals.
1986-1993
When
the
immigration
oor
reopened
after
the
re-
cession
of
the
early
1980s,
it
did
so
on a
very
dif-
ferent
basis
than when
it had
been shut. In
1985,
the
new
Conservative
overnment
ndertook re-
view of
immigration olicy,
the
conclusionsfrom
which
are evident n a
specialreport
o
Parliament
in
June
of
1985
(Canadal985a)
and in the
Annual
Report oParliament nFuture mmigration evels
several
monthslater
(Canada
1985b).
A
central
CANADIAN
PUBLIC POLICY
-
ANALYSE
DE
POLITIQUES,
VOL.
XXV,
NO. 4
1999
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The
EconomicGoals
of
Canada's
mmigration
olicy:
Past andPresent 433
TABLE
The
Points
ystem
ver
ime
Factor '67 '74 '78 '86 '93 '96
Education
20 20 12
12
14
21
Experience
-
-
8
8
8
9
Specific
ocational
10
10 15
15
16
preparation
Occupational
emand
15 15
15
10
10
Labour
arket
alance
- - -
- -
10
Age
10
10 10
10 10
13
Arranged
mployment
10
10
10
10 10
4
or
designated
cc.
Language
10
10
10
15 14
21
Personal
uitability
15
15
10
10 10
17
Levels
-
- -
10
8
Relative
0/3/5+ 0/3/5 5
-
-
5
Destination
5
5 5
Total 100
100
100
100
100
100
PassMark 50
50
50
70
67
Bars
n
Entry:
1967 noone
ategory
esultanbeconclusiveither
ay.
Feb. 974
applicant
ust
ithereceive
t
east
neunitor
occupational
emandr
get
en
points
or
arranged
employment
r
designatedccupation.
Oct. 974 ten
points
ould
e
deducted
nless
he
applicant
howed
videncef
arranged
mployment
rwas
going
to
a
designated
ccupation.
emoved
n
April
979 ut
eimposed
n
September
979.
May
982
only pplicants
ith
rranged
mployment
re
ligible
oradmission.
emoved
n
January
986.
1992 zero
nitsor
xperience
s an
automaticar
nless
he
person
as
arranged
mployment.
Note: heablehowsmaximum
oints ossible
n
each
ategory.
aximum
oints
nd
PassMarkave
een
escaled
in
1993 nd 996
o
put
he
ystem
n
erms f
points
ut f
100.
+
Pointswarded
epend
n
relationship
o
sponsor.
*ThePassMarkariesy kill roup.Theotal vailableointsctuallyquals4.The assmarksre: rofessional,
52;
killed
dministrator,2; echnical,7;
rades,
5.
CANADIAN
PUBLIC POLICY
-
ANALYSE
DE
POLITIQUES,
VOL.
XXV,
NO. 4
1999
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8/10/2019 The Economic Goals of Canada's Immigration - Green, Green
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434
Alan G.
Greenand
DavidA.
Green
concern n these
reports
s that
fertility
n
Canada
had
fallen
below
replacement
evels,
with the im-
plication
hat he
population
would
begin
o
decline
justafter
he turnof the
century
f
immigration as
maintained
t its then current ow levels. The
re-
ports
also
reflect
a
belief that he economic
compo-
nent
of
the
inflow should be increased.
But,
cau-
tions the
Annual
Report,
the
ncrease
n
the eco-
nomic streammust
not ... be at
the
expense
of the
social and
humanitariantreams
ibid.).
Immigra-
tion
levels
would
be
increased
ubstantially
nd
re-
strictions
on
the economic
component
would be
lifted
to
try
to makesurethat
component
rew
with
theoverall evels,buttheassessed nflowwas still
very
much
a residual.The new
policy
represented
victory
for those who saw
immigration
s a
long-
run
policy
tool.
Immigration,
s an
economic
policy,
would
be used
primarily
to bolster
population
growth
and
o
readjust
he
age
structure
f
the
popu-
lationso
that herewouldbe
enough
workers
o
pay
for
the
baby
boomers'
pensions
and
healthcare.
The outcome
of
these
policy
deliberationswas
a
removal f theprerequisitef arrangedmployment
for
independentapplicants
n
January
1986. The
level of the
inflow
jumped
rom
83,402
in
1985 to
99,219
in
1986,
and hen
o
152,098
n
1987.These
were
the
first n a
seriesof increases hat
eventually
led
to
a level of
nearly
250,000
in 1993.
The
new
policy
also
saw
the
expansion
of
the
business
component
of the inflow.
Self-employed
workers
and
entrepreneurs,
ho were
expected
to
establishand run a business n Canada,had a spe-
cial
place
within he
point
system
rom
he start. n
January
1986,
the
government
dded
the investor
class,
applicants
within
which
gained
admission
y
investing pecified
amounts
n
Canadian
nterprises.
Whilethe businessclasses havenever
becomemore
than a small
part
of the
inflow,7
his
represents
philosophical
hift toward n
idea that
mmigration
could be used as a sourceof
capital
and
as a means
of
establishing
rade
links.8
Notice that
these,
too,
arelong-term oalsof immigration olicy.
At the same
time as these
changes
were
being
implemented,
he
government
undertook
demo-
graphic
eview
o examine he
consequences
f
de-
clining
birth
ratesand their
mplications
or immi-
gration
policy.
That
review,
whichwas
presented
n
1989,
indicated hat
immigration olicy
was
not
a
good
tool
for
meeting
he
demographic oals
setout
in
the earlier
policy
statements.
n
particular,
ith
a
fertility
rateof
1.7,
gross
flows
that were
likely
to
be
politically
easible could not
provide
continual
population rowth.
Further,
he
review
showed
hat
even wild
immigration
cenarios
with
large
nflows
and
50
percent
of
the inflow under
age
15
would
not have a substantialmpacton the age structure
(Canada
1989).
Immigration
was not
the solution
for a
naturally ging
population.
In the
early
1990s,
the
government
moved
away
from
demographic
oals.
At
the same
ime,
it
began
to
increase
he
importance
f
the
economic
compo-
nentof the inflow.9
Beginning
n
May
1991,
a
des-
ignated
ccupations
ist wasformedwhich
contained
occupations
n
short
supply
in
specific
provinces.
Immigrants homatchedhislistweregivenadded
points
and
processed
n
a
high
priority
basis. Most
importantly,
n
1992
the Conservatives
ntroduced
a
new
Immigration
ct
which
was
designed
o
pro-
vide
greater
ontrolover the
inflow.
The Act
gave
the
department
road
ew
regulatory
owers,
nclud-
ing
the
power
to set
limits on
components
of the
inflow and
urn
away
applicants
nce
specific
num-
bers
hadbeen
reached or a
particular
ategory.
his,
potentially,
was a
move
toward
ncreased use
of
immigrationoreconomicpolicy.Indeed, hegov-
ernment
roposed
o
use the new Act
to reduce
he
proportion
f
the nflow
who
were
n the
family
class
from
52
percent
n
1992
to 43
percent
by
1995.
Strangely,
new
set of
regulations
roposed long
with
heAct
didnot
makeuse of
these
powers.
While
the
regulations
roposed
etting argets
or the vari-
ous
components
f the
nflow,
he
assessed lass was
still
a residual.The
government
lso
committed o
stablenflowsofabout1percent f thecurrent
opu-
lationand
ncreased he size of
the inflow
to
nearly
CANADIAN
UBLIC OLICY
ANALYSE E
POLITIQUES,
OL.
XXV,
NO.
4
1999
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TheEconomic
Goals
of
Canada's
mmigration
olicy:
Past andPresent
435
250,000
in
1993
in
spite
of a
persistently
poor
la-
bourmarket.
This
was
the first
time thata
Canadian
government
ad
responded
o
high unemployment
rates
by
even
maintaining,
et alone
increasing,
he
size of
the inflow.
RECENT OLICY
Recent
mmigration
olicy
can be seen as an exten-
sion of
policies
established
n
the
early
1990s.
The
most
comprehensivelueprint
ortheLiberals'
trat-
egy
is found
in the
1995
document,
nto the 21st
Century:A Strategy or Immigrationnd Citizen-
ship.
The
key
elementsof the new
framework re
as
follows.
Immigration
evels are
to be maintained
t
1
percent
of the
population
evel,
though
target
ranges
rather han
specific
numbers
are to be set.
Within hat
rough
total,
refugee management
s
to
be moved into a
separate
ystem
with
separate
e-
sourcesand
goals
from he rest of
the
inflow.
There
is a
clear commitment o
achieving approximate
equality
of
the
family
class and
assessed
inflows,
even if thatmeans allingshortof overall evel tar-
gets.
For
instance,
Into
the 21st
Century
proposes
placing
family-class
applicants
ther
than
spouses
and
dependent
children in
a
separate
class
and
putting
numerical
imits on
that
class.
All
of these
elements
point
o
a
continuation f the
trend oward
an enhancedrole for
the economic
component
of
the inflow.
Indeed,
t is the
Liberal
government
hat
has met the
goal
stated
by
the
Conservatives f
hav-
ing
the
family
component
make
up
no
more han45
percentof theinflow.
What
s
the
goal
of
this
enhanced
conomic om-
ponent?
Statements
n
Into the 21st
Century
nd a
set of
proposedregulations
ntroducedn
Novem-
ber
1995,
but
subsequently
ithdrawn,
rovide
ome
guidance.
Those
statements
ndicatethat the
gov-
ernment
no
longer perceives illing
short-term c-
cupational
gaps
as an
important
goal.
In
telling
wording,
he
government
tates that
filling precise
occupational iches s notalwayseffective nmeet-
ing long
term
needs
Canada
995).
The 1995
pro-
posedregulations
ontained
reworking
f the
point
system
with
emphasis
n broad
ccupational
lasses
rather
han
specific categories.
However,
political
trade-offs
meanthis switch
away
from
targeting
occupations
will not be
complete.
In Into the
21st
Century
the federal
government
ommits o
pro-
vide
provinces
with the
opportunity
o choose
a
number
f
independentmmigrants
who
meet
pro-
vincialeconomic
objectives
Canada
1994b).
Im-
migrants
will be selected o meet
specific
skill
needs
in
specific
regions,
as denoted
by
the
provincial
governments,
ith
applicants
n
this
categorygiven
extra
points
and
high
processingpriority.
The
current
oals
seem, instead,
o be
more
ong
term.
Specifically,
mmigration
olicy
s to
be used
o
change
he nature
f the
Canadian
workforce: The
proposed hanges
in
mmigration
olicy)
seekto im-
prove
he
skills,
lexibility
nd
diversity
f the
Cana-
dian
workforce
esponding
o
Canada's
ew,
emerg-
ing
economy
ibid.).
Notably,
he
government
ro-
posed
a
program
e
establishedo
identify
ccupations
where
there s
a
shortage
f
labourand
which
are
closelyrelated o the skills of a specific mmigrant.
Thus,
rather
han
making
admission
onditional
n
there
being
a
labour
hortage
n
the
immigrant's
n-
tended
occupation,
he
government
would
bring
in
skilled
workers nd
help
hem
o
search or
a
job,
pos-
sibly
n a
different
ut
related
ccupation
o
their
own.
The
most
telling
evidence
of a
switch
toward
long-term
goals
is
the virtual
abandonment f
ab-
sorptive
apacity
as
it
had
been
interpreted
y
pre-
vious governments.This is evident in Minister
Sergio
Marchi's
tatement
ccompanying
he
1994
Immigration
lan:
Periodically
hroughout
ur
history
especially
during
economic
downturns
there
have been
calls to slam
the
door shut
to
immigration....
believe
thatsuch
sentiments
ndicate ack of
vi-
sion of
what
his
country
an
become....I
believe
that
decisionsabout
mmigration
houldbe made
fromthe perspectiveof a
long-term
vision for
Canada's uture
Canadal994a).
CANADIAN
PUBLIC
POLICY
-
ANALYSE
DE
POLITIQUES,
VOL.
XXV,
NO.
4
1999
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8/10/2019 The Economic Goals of Canada's Immigration - Green, Green
13/28
436
Alan G. Greenand DavidA.
Green
The main evidence that the
government
as aban-
doned
absorptivecapacity
is the
maintenance f
large
inflows in the face of
persistenthigh
unem-
ployment.
The level
of the inflow has
been reduced
in
recent
years,
but
to nowherenear
he extentone
would
predict
based
on earlier
responses
o bouts
of
high unemployment.
o makethis
point,
we re-
gressed
numbers f landed
mmigrants
n
each
year
from 1946
to
1989
on
a
constant
and
he detrended
annual
unemployment
ate
lagged
by
one
year.10
This
is
meant o show the correlation etween m-
migration
and the
business
cycle
over a
period
n
which
absorptive apacity appeared
o be
part
of
policydecisions.Figure2 containsa plotof the ac-
tual
mmigration
umbers
nd
a fitted ine
showing
predicted
mmigration
evels based
on
our
simple
regression.
Note that the fitted line
from 1990 to
1995
represents prediction
f
the
evels
that
would
have been
in
place
over
this
period
if
absorptive
capacity
were still
important.
he fitted ine
tracks
actual
immigration
evels
quite
well before 1990
with the
exception
of the
spike
created
by
the 1956
Hungarian
efugee
movement.
n
contrast,
here s
a
largegap
between he
actual
and
predicted
nflows
in
the
1990s;
while the
prediction
ased
on
extend-
ing
the
pre-1990
absorptive apacity policy
turns
down
n the 1990sbecause
of
risingunemployment
rates,
the
actual
evels
continued o rise.
By
1993
the
gap
between he actualand
predicted
evels was
150,000.
Even with recentreductions n
the
immi-
gration
evel,
thedifferences
approximately
0,000.
The
gap
is a
measureof the extent
to
which both
governments
n
this
period
have moved
away
from
earlier
policies.
The
abandonment
f
absorptive
a-
pacitysignalsa victoryof the long-termover the
short-term iew
of
the benefitsof
immigration.
n-
stitutionally,
herecreation f a
separate
Department
of
Citizenship
nd
Immigration
n
1993can be seen
eitheras
the sourceor a
signal
of the shift in
power.
Several
acets
of
the new
immigration rogram
are
ailored o the
goal
of,
ensuring
hatnewcomers
FIGURE
Actual
ndPredicted
mmigration
ates,
Canada
947-1997
27
26
25
24
\
o
23I I
22
C
21
S20
I
319
o
18
\
I
7I I
I17
1
\
i
-14
i
c
13
-
-
12
t
c
11
-
--
9
\ /
9
7
[
6-
4
-
Actual
mmigration
3
-
- -
Prediction
ased
n
Unemployment
ate
2
1
0
I
I
45
50
55
60 65
70 75 80
85 90
95
100
Year
CANADIAN
PUBLIC
POLICY
-
ANALYSE DE
POLITIQUES,
VOL.
XXV,
NO.
4
1999
This content downloaded from 142.103.160.110 on Thu, 7 Nov 2013 15:46:45 PMAll use subject to JSTOR Terms and Conditions
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14/28
The
EconomicGoals
of
Canada's
mmigration
olicy:
Past
and Present
437
to Canada
an
ntegrate
ndcontributeo
Canada
s
quickly
as
possible,
without
adding
o
the
burden
on social
programs
Canada
1996).
This is
the
sourceof newpolicy proposalswhich wouldmake
immigrantspay
for
settlement
ervices and make
sponsors
post
bonds out of which
any
welfare
use
by
the
sponsored mmigrant
n the
first ten
years
afterarrivalwouldbe subtracted.t
is also a
source
of the
push
for more flexible
workers
ince,
in
the
new conomy
where
constant
hange
s
to be ex-
pected,
more
lexibility
will
mean ess
timecollect-
ing
social
security.
Most
mportant
n
this
regard
s
the increased
mphasis
on
language
proficiency
n
the selectionprocess.Immigrantsluent n English
or French
re
argued
o
enter he
labourmarket
more
quickly.
Finally,
the
government
as
maintained
commitment
o
using
mmigrants
o
generate
nvest-
ment
and
trade
lows.
SUMMARYF
MAIN
TRENDS
The
policy periods
we
haveexamined
anbe
aggre-
gatedinto five broadperiods.The firstcovers the
time before
approximately
960.
This is a
period
when short-and
long-term
conomic
goals
for im-
migrationpolicy
were
in
concert.The
government
wantedboth more
people
n
general
o
populate
n
empty
and andmore
unskilled
people
n
particular
to
provide
he abour o
develop
ournatural
esource
base. The
specific goals changed
over
time from
unskilled
abour
generally
before
WorldWarI
to
farm abour or the west
in
the
1920s to
unskilled
labour orminingandforestryn the 1950s.Over-
laid on
top
of this was an
attempt
o tailor
he
size
of the inflow to the
absorptive capacity
of
the
economy.
This meant
virtually
hutting
down im-
migration
during
economic
downturns. rom
1960
to 1978 the economic
goal
of
immigration
olicy
changed
o the short-termne of
matching
kill
gaps
in
the
occupational
tructure. he
pointsystem
was
part
of an
attempt
o
do that
matching
as were at-
tempts
o
keep
the size of the
sponsoredomponent
of the inflow small. From 1978 to 1986,the eco-
nomic
goals
of
immigration olicy
were
swamped
by
humanitarian
oals.
The
government
maintained
a
commitment
o
targeting
mmigrants
o skill
gaps
buttheir
ability
o do so was
hampered y
a
system
in whichapplicants ssessedfor theirskills were a
residual
category
relative to
refugees
and
family
class
immigrants.
hen
rom
1986to
1989,
the
gov-
ernment
ocusedon
long-term,
demographic oals
for
immigration,
lacing
ittle
emphasis
on
select-
ing specific
skills.
Up
to the end
of the
1980s,
Canada's
mmigra-
tion
policy
couldbe
broadly
ummarizeds
one with
low inflows n
economic
downturns
lternating
ith
large inflows directed at specific goals in better
times. This
time-honoured
attern
was
abandoned
in
the
1990s,
with the
government
deciding
that
long-term
benefits of
immigration
were
sufficient
to
justify
maintaining
arge
inflows in
the
face of
high
domestic
nemployment.
urther,
he
ong-term
goals
being
pursued
re
different
rom
those at
any
previous
ime:
they
are not
the
broad
demographic
goals
of
expanding
he
population
s
an end in
it-
self or of
changing
he
age
structure.
nstead,
the
new long-termgoal appearso be to use immigra-
tion to
change
he
nature f
the
Canadian
orkforce,
making
t more
skilledand
flexible.We
have
never
before
ried o use
immigration
olicy
to
change
he
skill
mix in the
economy
without also
stating
ex-
plicitly
whichskills
are
acking,
hat
s,
without
ry-
ing
to
micro-manage
he
process.
WHAT
SHOULDTHE
ECONOMIC OALSOF
IMMIGRATIIONOLICY E?
We
turnnow
to
assessing
immigration
s an eco-
nomic
policy
tool
for
Canada.
Rather han
directly
evaluating
urrent
mmigration
olicy,
we
pursue
he
more
general
end of
examining
a
set of
potential
economic
goals
for
immigration.
Once
that
evalua-
tion
is
complete,
an
understanding
f
the
subset
of
goals
characterizing
urrent
olicy
will follow.
The
specific
set of
goals
we examineare
those that
have
been
pursued
n
Canada's
mmigrationolicy
at
least
once in
our
history.
Focusing
on
this set allows
us
CANADIAN
UBLIC
OLICY
ANALYSE E
POLITIQUES,
OL.
XXV,
NO. 4
1999
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15/28
438
Alan G. Greenand DavidA.
Green
to
narrow urdiscussion
o
the
goals
thathavebeen
deemedrelevant or Canada.Our
approach
n
con-
sidering
each
goal
is to ask whether
mmigration
s
the
best
policy
for
meeting
hat
goal
rather han
dis-
cussing
the usefulness
of the
goal
itself.
Thus,
we
will
consider
mmigration
s one of
a
group
of
(pos-
sibly)
competing
policies.
We
argue
hat,
unlike n
the
past
when
therewere
identifiable
oals
for
im-
migrationpolicy
that could not be met
through
l-
ternative
policies,
there s
currently
o
single
goal
for
immigration olicy
thatcould
not be
met better
through
an alternative.
Beforeevaluating ny policy,we need to decide
who we care about
in the
evaluation.
A
common
approach
s to examine
he
impact
of
immigration
on individualsresident
n
the host
country
before
immigration
ccurs.
This,
however,
eads to
poten-
tial nconsistencies s
the
optimal
olicy
may
change
once the new
immigrants
rrive
n
Canada nd
heir
utilities
are included
n
any
calculations. 1
s an
extreme
response
o this
consistency
problem,
we
could take accountof the utilities not
only
of
resi-
dentsandimmigrants ut also of potential mmi-
grants.
This
approach
lso has
difficulties,
which
are
evident
n the
contextof a classical
utilitarian
social welfare unction.
Working
with such a func-
tion,
we could end
up
at the
conclusion that we
should
bring
n
a
large
number
f
immigrants
ven
if
doing
so meant
very
low
average
utilities
for
everyone
n
the
country.
he atter
policy
essentially
tradesoff the
standard
f
living
for sheer
numbers
of individuals ndarises
because he
averageutility
level andthe number f peoplein a population re
perfect
substitutes
n a
classical
utilitarian ocial
welfare function.
In
response
to
these
problems,
Blackorby
and
Donaldson
1984)
introduce n
ap-
proach
called
critical level
utilitarianism
CLU).
Under
CLU,
one evaluatesdifferent
ocial states
by
adding
up
the
lifetime
utilities of all residentsand
potential
residents after
subtracting
rom
each a
fixed,
critical evel of
utility,
a. This critical
evel
acts like a fixed
cost
of
adding
extra
people
so that
a higher evel of a implies hatsocietyplacesmore
emphasis
on
individual evels of
utility
and
ess on
having
more
people.
Thus,
we can
analyze
various
immigration
olicies
not
just
by
asking
whether t
increases total or
average utility
but
by
asking
whether t results
in
more
people (including
the
immigrants
who
would be
brought
in
under the
policy) having
more
than
a minimum tandard f
living.
It is this
CLU
approach
which we will im-
plicitly
consider
n the
discussion
hatfollows.
Our
next
step
s to sketchout an
economicmodel
as a frameworkor
discussion.The
model we
will
consider
s a standardne
presented
n
Borjas
1995)
among
other
places.
In
this framework
e assumea
productionunction (K,L)whichis a functionof
the
capital,
K,
and
abour,
L,
used
in the
economy.
For the
moment,
mmigration
will be
assumedto
cause
an
increase n L but
have no
effect
on
K. Per-
haps
the most crucial
assumption
at
this
point
is
about he returns
o scale embodied n
the
produc-
tion function.
Trefler
1997)
showsthat f
the func-
tion
embodies
a
constant
returns-to-scale
echnol-
ogy
then
ncreasing
without
hanging
K
may
mean
that
average
ncome will
stay
constantor
fall,
de-
pendingonassumptions elating o tradeandfactor
mobility.
f,
in
contrast,
he
function
embodiesan
increasing
eturns-to-scale
echnology
then immi-
gration
an lead
to
growth
both in
total
output
and
in
incom