Come to think of it | Immigration, the economy and the PQ’s threshold of 35,000 immigrants

When it comes to immigration, the Parti Québécois (PQ) proposal contrasts with that of other political parties: it is the only party to propose a significant reduction in permanent immigration thresholds, from 56,600 to 35,000 immigrants per year.

According to the leader of the PQ, Paul St-Pierre Plamondon, immigration is not a solution to the labor shortage.

“The experience of the last 20-30 years (is that) we increase the thresholds and we are still facing a labor shortage. Increasing immigration does not fill the labor shortage, and there are numerous studies to confirm this. We must be able to debate on premises that are true, that do not mislead the population,” said Mr. St-Pierre Plamondon during a debate on immigration on RDI two weeks ago.

However, studies on the economic impact of immigrants are… much more nuanced.

But the biggest problem is that the economists that the PQ cites to justify its threshold of 35,000 permanent immigrants do not recommend reducing the permanent immigration thresholds in Quebec.

The PQ often cites the studies of economist Pierre Fortin. In the summer of 2022, in a column published in NewsMr. Fortin recommended instead keeping the permanent thresholds stable at 50,000 and gradually increasing them to 55,000. “Between 50,000 and 60,000 is a correct number,” the professor emeritus told me last week. in economics at the University of Quebec in Montreal (UQAM).

Shades, please

The debate on immigration is sensitive and very complex. I feel profoundly uncomfortable when I see politicians or columnists talking about it without nuance with absolute certainty, not considering all the facts as a whole, and accusing anyone who does not share their position of spreading falsehoods.

Immigration isn’t just about economics, but let’s just focus on the economic arguments for the purposes of this column.

I have read three comprehensive global studies on the economic effects of immigration, carried out by the OECD1the National Academies of Sciences, Engineering and Medicine in the United States2 and by a Harvard economics professor3in addition to the study by Pierre Fortin (which will be published later) and the Institut du Québec4. Their conclusions are very nuanced. In general, the conclusions of economists are as follows:

1) immigration is not a magic potion or a miracle solution on the economic level;

2) immigration has beneficial economic impacts, but these are generally weak;

3) some economists estimate that immigration very slightly increases the level of wealth of a country (GDP per capita), others that it decreases it very slightly;

4) immigrants are generally net tax contributors (they pay more in taxes and contributions than they receive in government benefits). This is the case in Quebec5 ;

5) immigrants do not “steal” jobs from natives. On the contrary, they often have different jobs;

6) the immigration of highly qualified workers has the greatest economic impact.

In this debate on immigration and the economy, the PQ first claims that an increase in immigration does not make it possible to remedy a labor shortage throughout the economy.

This statement is correct.

Generally speaking, immigration can remedy a labor shortage in certain sectors. In a study which will soon be published, Pierre Fortin demonstrates, however, that immigration is not a solution to solving a labor shortage throughout the economy, based on the economies of the “G9 » (G7, South Korea and Spain). The “most likely” effect: a slight increase in the vacancy rate. Because new immigrants increase the demand for labor in the rest of the economy.

Then, the PQ affirms that an increase in immigration does not lead to an increase in the overall standard of living (GDP per capita).

The answer to this question is more complex, and varies depending on which economic studies you read.

In a study published in 2015, three economists analyzed the impact of the immigration rate in 22 OECD countries between 1986 and 2006. Their conclusion: immigration has a positive, but modest, effect on GDP per capita.

Quebec economist Pierre Fortin did a similar exercise for 22 countries between 1989 and 2019. He came to the opposite conclusion: an increase in immigration does not lead to an increase in GDP per person. If immigrants have low-skilled jobs, this could even lead to a slight drop in GDP per person.

In short, it’s not simple.

What do economists say about the threshold?

The economists that the PQ cites to justify its proposed threshold of 35,000 permanent immigrants do not reach the same conclusion as it does on the threshold.

For Quebec, Pierre Fortin talks about maintaining an annual threshold of between 50,000 and 60,000 permanent immigrants.

The PQ also often cites the study recently published by National Bank economists on Canada’s “demographic trap”. They estimate that total immigration (new permanent and temporary immigrants) is too high in Canada, which should welcome between 300,000 and 500,000 new immigrants per year, which would represent up to 110,000 immigrants for Quebec.

National Bank economists are not specifically advocating a reduction in permanent immigration to Quebec. Instead, they recommend “the formation of a committee of non-partisan experts who will issue recommendations to politicians on the (total immigration) figure.” Unlike permanent immigration, temporary immigration currently has no threshold. “Targeting only permanent immigrants is not enough and we must depoliticize immigration policy,” Stéfane Marion, chief economist at the National Bank, wrote to me.

Not all economists share the National Bank’s opinion. The chief economist of the Desjardins Movement, Jimmy Jean, believes that reducing immigration too sharply to alleviate the housing crisis would be a mistake6.

Reducing to 35,000 is not justified

Where does the PQ figure of 35,000 permanent immigrants come from? “This is the figure (in Quebec) at the start of the 2000s. There was no housing crisis, French was stable. It’s a figure from a time when there was a certain balance,” Paul St-Pierre Plamondon said two weeks ago on RDI. The PQ also uses a third factor to determine reception capacity: the capacity to provide public services. “We hope that immigration will be a successful experience,” said PQ MP Pascal Bérubé in an interview. This involves telling the truth: there is a threshold beyond which we will not be able to welcome people properly. »

For French, the facts contradict the PQ’s argument on its threshold in the early 2000s: French is more popular among immigrants today than in 2001. More immigrants than ever speak French (by 76 % in 2001 to 81% in 2021), to have French as their first official language spoken (from 55% to 63%), as the language spoken most often at home (from 34% to 43%) and as their mother tongue ( from 20% to 25%).

For housing, we are indeed in the middle of a crisis, but the PQ’s speech lacks nuance. The housing vacancy rate in Quebec is the same (1.3%) in 2023 as in 2003, according to the Canada Mortgage and Housing Corporation (CMHC). A further increase in immigration “could further contribute to imbalances in the housing market”, according to a Bank of Canada economic study7, but not all new immigrants have the same housing needs. Temporary immigrants awaiting permanent status already occupy accommodation, foreign students are often in shared accommodation, the 36,000 people awaiting family reunification would for the most part not need additional accommodation. The housing crisis is more acute in several regions, while many immigrants are settling in Montreal.

Last remark on the threshold of the PQ: we welcomed 35,000 permanent immigrants in 2003 when there were 7.5 million Quebecers. The population is now 9 million. If the PQ wants to take the 2003 immigrants/total population ratio, its threshold should be 42,000 permanent immigrants.

“We have to be able to debate on premises that are true,” Paul St-Pierre Plamondon told RDI.

Exactly: if we look at all the facts more closely, not just those that suit us, there is no valid reason to reduce the thresholds for permanent immigration to Quebec.

1. Consult the study carried out by the OECD (in English)

2. The Economic and Fiscal Consequences of Immigration. National Academies of Sciences, Engineering, and Medicine. 2017.

3. Consult the study carried out by Professor George J. Borjas (in English)

4. Consult the report from the Institut du Québec

5. Read “How many immigrants does Quebec need?” »

6. Read “Immigration: too big a drop would be a mistake, says Desjardins’ chief economist”

7. Consult the study carried out by the Bank of Canada

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