At A Time Of Surging Inflation, Raising Immigration Levels Is A Mistake

Any conversation about our standard of living must include a rational discussion about how high our immigration levels should be.

In many countries, immigration is seen as an issue open for political debate.

And why shouldn’t it be?

‘Free’ countries are supposed to be places where we are free to debate and discuss important issues, and immigration is certainly important.

However, here in Canada, the immigration debate has become so dominated by political correctness that there is a near total absence of discussion about how high our immigration levels should be, despite Canada having one of the highest immigration rates (on a per capita basis) in the world.

After a dip during the early part of the pandemic, immigration to Canada is surging again, with the Liberals pushing to either match or exceed their target of 450,000 immigrants per year. Further, the Liberals have already issued over 300,000 international study permits.

Now, this is where we need to point out how strange it is that this isn’t being discussed more – especially by our main political parties.

Keep in mind that Canada could cut our immigration rate by 75% and still have a relatively high per capita level of immigration. A 50% cut would leave us with one of the higher rates in the world. Personally, I consider myself pro-immigration, and want Canada to be a welcoming place for people around the world who are seeking a better life. That said, being pro-immigration doesn’t mean favouring ever-increasing immigration levels, because we need to rationally consider the impact that different levels of immigration have on those who are already living here.

What that means is that there are certainly times when the best move is to reduce immigration levels, and this is certainly one of those times.

Currently, Canada’s economy is in a bad place. Whatever ‘growth’ we have is propped up by massive government debt-fuelled spending, a huge expansion of the fiat currency supply, a completely overheated housing market, and huge levels of household debt.

Sustainable growth comes from rising productivity and GDP increases on a per capita basis. Meanwhile, artificial growth comes from raising your population (which gives a higher overall GDP number while leaving per capita wealth stagnant or declining), debt, and easy money, all of which continues to pile up vulnerabilities in the economy.

This is why, as I noted in a recent column, Canada’s economy has been stagnant for quite some time on a  per capita basis:

Additionally – and keep in mind this was written in 2019 – GDP per capita (the only thing that actually matters in terms of measuring our individual standard of living) has not been going up:

“Overall, notwithstanding strong population and employment growth and low unemployment, Canada’s economic fundamentals look shaky. Business investment per capita and per worker is lower than 11 years ago. Rapid population growth is contributing to higher employment, total hours worked and aggregate GDP, but it’s not boosting GDP per person. That means the economy is not generating meaningful gains in living standards.”

Economic mirage

What we are seeing today is a government and political class that is intent on generating an economic mirage, attempting to convince Canadians that our economy is growing while no actual growth takes place.

Consider that our money supply and population is growing, while productivity and per-capita income is not.

This allows the government to point to an overall GDP figure that is bigger, but what impact does that have on each individual Canadian?

Inflation plus low wage growth = Canadians falling behind

Here’s what a recent Bloomberg article noted about Canada’s high levels of immigration and the impact on wages:

“Canada, unlike the U.S., quickly started welcoming foreign workers and students again after a brief pandemic halt in what is part of a years-old, pro-immigration policy that’s provided its economy with a much more work-ready labor force. 

In the five years through 2020, about 1.9 million newcomers came to the country, up from 1.2 million the previous five years. The U.S., nine times the size of Canada, saw its net flow of immigration drop to about 3.8 million over that time, from 4.5 million.

The results are simultaneously terrific and problematic: Companies have been filling job postings at a breakneck clip, pushing payrolls back above pre-pandemic levels and allowing them to ramp output back up. But workers, with fewer labor shortages acting as leverage, are scoring tiny wage increases — currently running at 2% on average — that leave them poorer after inflation of almost 5% is factored in.”

Now, given that inflation is likely even higher than the 4.7% figure the government claims, you can get a sense of how rapidly many Canadians are falling behind.

Canadian workers are simultaneously being robbed of their purchasing power and their leverage, as the government brings in more and more people while the Bank of Canada rapidly prints money.

This would only work if Canada was experiencing some sort of massive technological revolution that was generating huge productivity increases.

But, since we aren’t in the middle of such a moment, printing a bunch of money and bringing in a large number of new people will make individual Canadians poorer in real terms.

The housing market is also distorted by rapidly increasing immigration, as the higher demand combined with a huge expansion of the money supply generates unsustainable increases in housing prices.

The climate angle

Another point that should be made is how hypocritical it is for our political class to rapidly increase immigration even as they seek to weaken our economy and raise our taxes to ‘fight climate change.’

More people equals more emissions, since economic activity generated by human beings is what – by definition – causes human generated emissions.

Wouldn’t you think that those most concerned about climate change would then be opposed to higher immigration?

Additionally, higher immigration tends to bring people from countries with low per capita emissions to countries with higher per capita emissions, which certainly seems counterproductive from the perspective of ‘fighting climate change.’

A rational discussion

The takeaway from all of this is that Canada must be able to have a rational and reasonable discussion about immigration, a discussion that truly takes into account the fact that bringing in too many people in a short period of time has real impacts on those who already reside in our country, and those impacts can be negative especially in moments where the cost-of-living is surging.

High immigration and rampant money printing is not at all helpful for Canadians, and at this time our country needs lower immigration levels if we are to avoid further deepening our serious economic problems.

Spencer Fernando

Photo – YouTube

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