Surging Immigration & A High-Tax Welfare State Are Incompatible & Unsustainable

Our living standards will continue to decline until we make a clear choice about what kind of country we want to be.

A country can have very open immigration and succeed. Both Canada and the United States are examples of this.

This is often mentioned by those who support Canada’s surging immigration levels.

However, there’s something they don’t mention:

Canada’s largest spikes in immigration – as a percentage of our total population – took place at a time when our country wasn’t a high-tax welfare state.

Canada’s biggest increases in immigration took place around 1900-1910. At that time, Canada didn’t even have an income tax or corporate tax.

This was a wide-open nation, without much of a welfare state, but with the opportunity for people to keep almost every dollar they earned.

Another way to put this is that people coming to Canada knew that they would be free to succeed on their own merits, but didn’t come here expecting to be enrolled in a cradle-to-grave welfare state.

But this country is very different now.

Taxes now take close to 50% of the income of many high-earners. When you add in other taxes – sales taxes – the carbon tax – new fuel taxes – more and more Canadians will be working more for the state than for ourselves.

At the same time, the government continues to expand the welfare state, with new programs that Canadians are forced to pay for, an ever-expanding bureaucracy (which is paid more than the average private sector worker), and more and more money thrown at a crumbling socialized healthcare system

Thus, while many new Canadians come here and generate significant value, there is a growing sense that this country is less and less friendly to the most entrepreneurial newcomers, and more ‘well-suited’ to those who want the government to take care of them.

So, what happens when massive immigration is combined with a high-tax welfare state?

A declining standard of living.

If a country disincentivizes productivity, hands out ever-increasing taxpayer-funded benefits, and then massively increases the population year-over-year, you end with a dwindling percentage of the country disproportionately funding government outlays to a growing number of people.

In that situation, you would expect to see exactly what we are seeing in Canada: Overwhelmed & crumbling social services, rising debt, large budget deficits, declining business investment, weak per capita GDP growth (per capita GDP in Canada is likely already in decline), rising levels of crime, and a broken housing market.

Take a look at this:

“Calgary also had the fastest-growing average rent year-over-year, soaring by 42.3 per cent for a one-bedroom apartment and 32.9 per cent for a two-bedroom unit.” This is a crisis, and our political class refuses to treat it like one.”

https://twitter.com/mikepmoffatt/status/1656965943044497408

https://twitter.com/MikePMoffatt/status/1656966606600261632

Remember, the Liberals say immigration is increasing by about 450,000 per year. However, that number excludes temporary foreign workers and foreign students. With those increases included, the immigration level is now over 1 million per year.

Because of our socialist, high-tax, anti-business government, this country is becoming less and less friendly to building things.

A massive population spike + not enough homes/apartments being built = higher prices.

A clear choice must be made

Countries like Canada and the United States succeeded in large part because they combined laissez-faire capitalism with an openness to newcomers.

People from around the world could bring their ideas and talents to a new country, compete and succeed or fail on their own merits.

Taxes were low. Land was cheap. Opportunity was abundant. Individual freedom & personal responsibility were popular, while collectivism & socialism were rejected.

And it worked. It worked to the greatest extent in human history.

But the key thing was the combination of a low-tax, low government-spending country, with an openness to newcomers.

It doesn’t work if that openness is combined with a high-tax welfare state.

Alternately, most countries with a ‘successful’ welfare state (they tend to be low-growth and relatively stagnant) are countries with low immigration levels. They also tend to be relatively homogenous from a cultural perspective.

Countries like Sweden that had a large welfare state and a cohesive population have run into significant problems when they threw open the doors to immigration, and this has generated a significant backlash to immigration in that country.

Sooner or later, Canada will have to make a choice. If we want to remain open to newcomers, we will have to pare down the welfare state, cut taxes, reject collectivism, and re-embrace capitalism & personal responsibility.

And if we want to keep expanding the welfare state, we will have to significantly cut immigration levels.

The choice can be avoided for a while, but the consequences of not choosing cannot be avoided. And those consequences will make it impossible to put off the choice forever.

Spencer Fernando

Photo – YouTube

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