Fraser Forum

Atlantic provinces want to send workers where there are no jobs

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Some unfounded optimism emerged from Prince Edward Island this month, from the meeting of four Atlantic premiers and five federal ministers. Immigrants shall come, they said, and they shall "drive economic growth" and "sustained prosperity" in the region.

Specifically, a pilot program will assign 2,000 more immigrants each year across the four provinces. In doing so they acknowledged that the region has had outward migration to other provinces for decades. The case of Newfoundland and Labrador is the most severe, with a net loss since the 1970s equivalent to 24 per cent of the current population.

Between 2014 and 2015, the total populations of both Newfoundland and New Brunswick actually declined, and in Nova Scotia, the long-term outflow of young people contributed to the fact the province had more deaths than births. The Atlantic provinces also failed to attract international migration, garnering 3.7 per cent of the total, despite having 6.6 per cent of the Canadian population.

As Fraser Institute researchers have previously written, migration "can be a powerful indicator of a jurisdiction's success or failure." It’s a form of revealed preference, as opposed to a stated preference: talk is cheap, but packing your bags and uplifting yourself costs money. There has to be a good reason.

Evidence across the United States shows a clear pattern of migration towards economic freedom, as documented by the Mercatus Center at George Mason University. In their Freedom in the 50 States index, they find fiscal and regulatory freedom to be the strongest determinants of migration flows (PDF, p. 96), as demonstrated by recent departures from California, New York, New Jersey, and Illinois, and arrivals in Nevada, Texas, Florida, and Arizona.

In the case of the Atlantic provinces, all four have unemployment well above the 6.8 per cent national average, with Newfoundland's at 12 per cent and P.E.I.'s at 11 per cent. The premiers appear to see this lack of opportunity, and announced their immigration program as part of an "Atlantic Growth Strategy."

The way to turn that around, so the premiers' logic goes, is to send more people there to work. Could there be a better example of the putting the cart before the horse?

Not only do they have the relationship between migration and economic opportunity backwards—treating the symptom not the problem—this plan distracts and diverts resources from the hard yards needed to make the Atlantic provinces attractive.

Halifax's Chronicle Herald says locals "cannot afford to be apprehensive and cliquish," and wants an end to the "come from away" label assigned to newcomers. However, if local workers are leaving for better deals in the Western provinces, foreign workers will too.

I know this situation all too well, since I was an immigrant to Halifax for my first job in Canada. When that did not work out, I sought other positions, but to no avail, and soon settled in the United States.

Ironically, having foreign immigrants move on could be in the interests of the Atlantic provinces—at least from a fiscal perspective—given Citizenship and Immigration Canada's history of selection. Even with a $1.6 billion budget—$6,400 per immigrant—the department has selected new arrivals with lower incomes and disproportionate social-welfare needs relative to the native population. In 2014, all the arrivals to Canada since 1985 were generating an annual net fiscal burden of $5,329 per individual. That means federal and provincial transfers in excess of their tax contributions to the tune of $27-35 billion.

As highlighted by Marco Navarro-Genie of the Atlantic Institute for Market Studies, the time and attention devoted to lobbying for more immigrants could have gone to shovel-ready options, such as the Energy East Pipeline. In an interview with the Globe and Mail, Navarro-Genie also singled out the ban on hydraulic fracturing in Nova Scotia and New Brunswick and the region's high tax burden and cost of living.

At the premiers' announcement, federal Minister of Innovation, Science and Economic Development Navdeep Bains promised that this purported growth strategy wouldn't be another report that gathers dust. However, if the rest of it turns out to be as misguided as the immigration plank, the Atlantic provinces would be better off it were shelved.

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