Immigration and Retirement

LESS a series of unrelated steps than a single grand plan, the Harper government’s blueprint for Canada begins in earnest this week. The aim is high — to transform the country into an economic powerhouse in the shortest possible time.

So, for instance, your retirement will have to be put off for a couple of years. Trading partners will change to realize greater returns in less time.
(Hello Asia.) Science and technology investment will be re-targeted for the most economic bang for the bucks.

 

Immigration is a particularly important page in the blueprint book. Family reunification will be less a goal than the attraction of a particular class of immigrants who can quickly go to work and begin contributing to the economic advancement of the country.

Immigration and retirement goals are closely linked to the government’s plan for the labour force. Likely its first goal is to keep people working longer by raising the age at which Old Age Security can be collected from 65 to 67. (OAS is funded from general revenue whereas the Canada Pension Plan has dedicated payments.)

Right now, there are 4.6 workers for every person over 65 in Canada. That ratio is expected to drop below three-to-one by 2031 meaning fewer people paying into social and retirement programs.
Fewer working Canadians and a declining birth rate are reasons to boost immigration. But the cost of immigration is significant.

The Fraser Institute used 2006 census data to study 844,476 individuals and concluded that immigrants who arrived from 1987-2004 paid only 57 per cent of the taxes paid by average Canadians. This meant a loss to the treasury of $23 billion annually according to their numbers. At the same time, even skilled worker immigrants had an unemployment rate of 34 per cent.

By 2031, Canadians over 15 in the labour force will drop from 67 per cent to 60 per cent. A Statistics Canada report noted that if immigrants and visible minorities were to participate in the labour force to the same degree as other Canadians, that drop could be cut in half.

In 1991, the Economic Council of Canada called for immigration to be increased to eventually bring the population to 100 million. In 2005, the Royal Bank recommended boosting Canada’s immigration rate by 30 per cent to 400,000 a year. Both reports had continued economic growth in mind.

The Harper government has concluded that the initial and ongoing costs of an immigration system that is tied closer to humanitarian goals than economic ones are too high. Instead, it wants to target skilled immigrants who can speak English or French and whose credentials are acceptable to Canadian professional and labour organizations.

The idea is to pay the way of existing retirees and ensure the growing rate of retirement is self-sufficient. The balance between welcome and necessity will be difficult, but is attainable.

Source: http://www.chroniclejournal.com/editorial/daily_editorial/2012-01-31/immigration-and-retirement