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Gates to prosperity

Winnipeg Free Press by Lori Wilkinson 19 February 2016

Many people wonder why Canada is opening its doors for Syrian refugees when there is so much poverty, inequality and injustice in our own society. Leaving aside Canada’s moral and international legal obligations, critics of the refugees argue that they are an unnecessary expense. What most don’t realize, however, is that refugees are actually an economic benefit to our country.

It’s true there is an initial economic cost we must bear to get them successfully settled and integrated, but over the long run, the short-term costs are overwhelmingly offset by the long-term economic benefits.

Evidence from other countries is extremely positive. The arrival of 1.1 million refugees in Lebanon, according to recent estimates from the World Bank, will increase that country’s gross domestic product (GDP) by 2.5 per cent this year and exports will increase by 1.5 per cent. The IMF estimates that Germany’s GDP will increase by one per cent by 2017 and Oxford Economics estimates that the refugees will also reduce inflation during that time. Denmark, a country that just introduced the so-called “jewelry tax,” requiring would-be refugees to surrender any valuable worth more than US$1,500, also benefits economically. A recent study found that the wages of Danish citizens actually increase owing to the arrival of refugees.

So what are the economic benefits to Canada? Our problems with demographic decline are well known. When the working-age population decreases, so does the tax base. According to Statistics Canada, by 2036, Canada’s working-age population will have decreased by nine per cent, meaning a lower pool of taxes. To offset this population decline, Canada needs to admit about 100,000 more immigrants and refugees per year beyond the 280,000 currently admitted, according to the Conference Board of Canada.

Newcomers, including refugees, are consumers of goods and services and pay taxes. In fact, over a lifetime, refugees will pay more in tax than they will ever consume in terms of social welfare, health and unemployment benefits.

Evidence also suggests that refugees are not direct competitors to Canadians for jobs. They tend to work in industries and jobs that Canadians don’t want and provide necessary labour for industries in need. The meat-packing industry, for instance, is interested in hiring refugees, given the lower number of temporary foreign workers who used to do these jobs.

Refugees also provide valuable employment for thousands of Canadians who work in various sectors of the immigrant-settlement area. Without newcomers, these highly qualified workers would be under- or unemployed themselves.

Perhaps there are some readers who are thinking about the long-term economic costs of refugees. Here, too, there is a strong, evidence-based history of success. Between 1979 and 1980, Canada admitted more than 50,000 Vietnamese refugees. Most were farmers with little education who could not speak either of Canada’s official languages. Ten years later, their unemployment rate was 2.3 per cent lower than for those born in Canada.

In Miami, where 125,000 Cubans arrived in a short period during the 1990s, the labour force increased by seven per cent and the economic condition of the city improved significantly. The city of Cleveland spent $4.8 million on settlement services for refugees in 2012. A subsequent economic analysis revealed that the refugees generated $48 million in terms of job generation and consumption of goods and services, a tenfold return on the initial investment.

At a cost of $1.2 billion over six years, the short-term costs for settling Canada’s new refugees are high, but the long-term economic return is even higher. Now that the positive economic case has been made, can we return to discussing our obligation to the international community to assist vulnerable people?

University of Manitoba sociologist Lori Wilkinson is director of Immigration Research West.