The Liberals broke the immigration system. But better is always possible

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This week, when it releases its new immigration targets, the Trudeau government has an opportunity to begin rethinking immigration policy.

For the past eight years, the Liberal plan has been about sharply and steadily increasing permanent immigration, while enabling even sharper increases in temporary immigration – with the two interconnected streams powered by huge jumps in the number of foreign students.

Why? The government’s reasons are a combination of faith and politics.

Faith that accelerating the country’s population growth will somehow spark higher per-capita economic growth and higher living standards – a faith belied by economic theory and evidence.

The Liberals also wanted to politically anchor themselves to the left of the Conservatives on the issue, and perhaps plant the seeds of a nascent wedge. This even though the Conservatives, who never miss an opportunity to attack the Liberals over so much as a misplaced comma, have always studiously avoided criticizing Liberal immigration plans.

The Liberal approach to immigration is having major economic consequences, many of them negative. Yet for years, there has been no national conversation critical of the Liberal approach. The topic is taboo. That’s what happens with issues of faith.

So let’s talk about what a rational immigration system would look like: It would start with acknowledging that the long-standing principles, goals and methods of the Canadian immigration system, created long before the Trudeau government came into office, are sound.

The key principle is that immigration should be designed to benefit Canada economically. The main goal should be choosing immigrants who offer the greatest benefit to Canada, by being mostly more educated and more skilled than the average Canadian, and thus likely to be more productive and earn higher wages. The right method for selecting these economic immigrants is the points system.

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A government that wanted maximum benefits for Canada would have taken the above and doubled down. Instead, the Liberals have spent the past eight years watering it down.

In so doing, the Liberals have undermined the country’s long-standing pro-immigration consensus. Recent polls suggest that somewhere between a plurality and a majority of Canadians want lower levels of immigration.

But that does not make Canadians “anti-immigration.” It just means they’re questioning the Liberal government’s immigration policy. Canadians are no more anti-immigration than someone who declines dessert after a hot-dog-eating contest should be accused of suddenly having become anti-food.

Last week in Toronto, a shared bed for rent was advertised for $900 a month. Not a room in a shared apartment. A shared bed in a shared room. Half of a 60-inch-wide mattress. Yours for just $10,800 a year.

This is happening in one of the world’s most bonkers housing markets, where a record shortage of places to live is meeting an immigration policy that celebrated a record of more than a million people coming to the country last year. This year’s numbers are likely to be higher; in the first six months of 2023, the temporary-resident stream alone brought in nearly 700,000 people.

This is happening even as the Bank of Canada’s high-interest-rate policy is trying to slow inflation by reducing economic activity, with one of the main transmission mechanisms being discouraging borrowing for new housing construction.

An immigration policy based on faith says there’s no connection between a sudden population surge and the price of rent. Basic arithmetic has other ideas.

Ottawa should lower its immigration targets, at least for the next few years. The current target for 2025, half a million new permanent immigrants, is nearly double the level of 2015.

Canada was not anti-immigration in 2015. Canada was not anti-immigration under the Liberal governments of Jean Chrétien, Paul Martin and Pierre Trudeau, when immigration was even lower. And Canada will not be anti-immigration next year if, in response to facts not faith, immigration is a bit less than this year.

Next step: Ottawa has to get back to properly using the points system to select the most highly skilled, highly educated and highly remunerated economic immigrants.

What has instead happened under eight years of Liberal government is that the temporary-immigration stream has exploded. Most of the people in that stream are coming to flip burgers, stock shelves and deliver food. Big business loves this endless supply of minimum-wage workers. The rest of us should be less enthused.

One of Canada’s biggest problems, and a growing drag on our living standards, is low productivity growth. Canadian businesses don’t invest enough in new technology and innovation – the things that spell more goods and services produced for each hour of work. A bottomless barrel of low-wage labour further discourages Canadian business from making those capital investments.

And a lot of low-wage labour is arriving through the booming student visa stream – which has been quietly converted from a selective program for luring the best and brightest to a no-limits scheme allowing universities and especially colleges to, in effect, sell Canadian citizenship. This, too, has to be scaled back and smartened up.

Better is always possible, as someone once said. Hint, hint.