Connect with us

David Clinton

What Drives Canada’s Immigration Policies?

Published

9 minute read

News release from The Audit 

Author of courses and books on data analytics, generative AI, cloud computing, and server virtualization

Government decisions have consequences. But they also have reasons.

Dearest readers: I would love to hear what you think about this topic. So please take the very brief survey at the end of the post.

Popular opposition to indiscriminate immigration has been significant and growing in many Western countries. Few in Canada deny our need for more skilled workers, and I think most of us are happy we’re providing a sanctuary for refugees escaping verifiable violence and oppression. We’re also likely united in our support for decent, hard working economic immigrants looking for better lives. But a half million new Canadians a year is widely seen as irresponsible.

So why did Canada, along with so many other Western governments, choose to ignore their own electorates and instead double down on ever-increasing immigration rates? Whatever nasty insults we might be tempted to hurl at elected officials and the civil servants who (sometimes) do their bidding, I try to remember that many of them are smart people honestly struggling to be effective. Governing isn’t easy. So it’s worth cutting through the rhetoric and trying to understand their policies on their own terms.

The Audit is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

As recently as 2022, the government – as part of its Annual Report to Parliament on Immigration – claimed that:

“Immigration is critical to Canada’s economic growth, and is key to supporting economic recovery”

There you have it. It’s at least officially about the economy. To be fair, the report also argued that immigration was necessary to address labor shortages, support an aging domestic population, and keep up with our “international commitments”. But economic considerations carried a lot of weight.

Now what I’d love to know is whether the “immigration-equals-better-economy” assumption is actually true. It’d be a real shame if the receipts told us a different story, wouldn’t it?

One possible way to measure economic health is by watching per capita gross domestic product (GDP) growth rates. Insofar as they represent anything real, the inflation-adjusted GDP rates themselves are interesting enough. But it’s the rates by which GDP grows or contracts that should really capture our attention.

The green line in the graph below represents Canada’s (first quarter) GDP growth rates from the past forty years. To be clear, when measured against, say, its 1984 value, the GDP itself has trended upwards fairly consistently. But looking at changes from one year to the next makes it easier to visualize more detailed historical fluctuations.

The blue bars in the chart represent each year’s immigration numbers as a percentage of the total Canadian population. That rate leapt above one percent of the population in 2021 – for the first time since the 1960’s – and hasn’t shown any signs of backing down. Put differently, Canada absorbed nearly 12 immigrants in 2023 for every 1,000 existing residents.

Seeing both trends together in a single chart allows us to spot possible relationships. In particular, it seems that higher immigration rates (like the ones in 2018-2019 and 2022-2023) haven’t consistently sparked increases in the GDP.

With the exception of those COVID-crazed 2020 numbers – which are nutty outliers and are generally impossible to reliably incorporate into any narrative – there doesn’t ever seem to have been a correlation between higher immigration rates and significant GDP growth.

So, at best, there’s no indication that the fragile economy has benefited from that past decade’s immigration surge. As well-intentioned as it might have been, the experiment hasn’t been a success by any measure.

But it has come with some heavy social costs. The next chart shows the painful disconnect between an artificially rising population and a weak housing construction market. The blue bars, as before, represent immigration rates as a percentage of total population. This time, however, they go back all the way to 1961. The red line tells us about the number of single-detached housing starts per 1,000 people.

With the exceptions of the mid-1960’s and the past few years, each of the historical immigration surges visible in the graph was either preceded or accompanied by appropriate home construction rates.

As an anomaly, the 1960’s surge was for obvious reasons far less damaging. Back then you could still purchase a nice three-bedroom house in what’s now considered midtown Toronto for no more than two years’ worth of an average salary. I know that, because that’s exactly when, where, and for how much my parents bought the house in which I spent most of my errant youth. Those elevated immigration levels didn’t lead us into economic crisis.

But what we’re witnessing right now is different. The housing supply necessary to affordably keep us all sheltered simply doesn’t exist. And, as I’ve already written, there’s no reason to imagine that that’ll change anytime over the next decade. (Can you spell “capital gains tax inclusion rate change”? I knew you could.)

Just to be complete, the disconnect doesn’t apply only to detached “built-to-own” houses. This next chart demonstrates that housing starts of all flavours – including rental units – grew appropriately in the context of historical immigration surges, but have clearly been dropping over the last couple of years.

Since housing starts data isn’t the only tool for measuring the health of a housing market, here’s a visualization of rental apartment vacancy rates in Canada:

Output image

The combination of a sluggish construction market and an immigration-fueled population explosion has been driving up prices and making life miserable for countless families. And things appear to be headed in the wrong direction.

So sure, immigration should play an important role in Canadian life. But by this point in the game, it’s pretty clear that recent government policy choices failed to reverse economic weakness and contributed to disastrous outcomes. Perhaps it’s time to change course.

Now it’s your turn. I hope you’ll take this very brief (and anonymous) survey.

Share your thoughts. Click to take the Immigration Policy survey.

Assuming we get enough responses, I’ll share the results later.

 

For the full experience, please subscribe to The Audit

Upgrade to paid

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Business

Is Government Inflation Reporting Accurate?

Published on

The Audit David Clinton's avatar David Clinton

Who ya gonna believe: official CPI figures or your lyin’ eyes?

Great news! We’ve brought inflation back under control and stuff is now only costing you 2.4 percent more than it did last year!

That’s more or less the message we’ve been hearing from governments over the past couple of years. And in fact, the official Statistics Canada consumer price index (CPI) numbers do show us that the “all-items” index in 2024 was only 2.4 percent higher than in 2023. Fantastic.

So why doesn’t it feel fantastic?

Well statistics are funny that way. When you’ve got lots of numbers, there are all kinds of ways to dress ‘em up before presenting them as an index (or chart). And there really is no one combination of adjustments and corrections that’s definitively “right”. So I’m sure Statistics Canada isn’t trying to misrepresent things.

But I’m also curious to test whether the CPI is truly representative of Canadians’ real financial experiences. My first attempt to create my own alternative “consumer price index”, involved Statistics Canada’s “Detailed household final consumption expenditure”. That table contains actual dollar figures for nation-wide spending on a wide range of consumer items. To represent the costs Canadian’s face when shopping for basics, I selected these nine categories:

  • Food and non-alcoholic beverages
  • Clothing and footwear
  • Housing, water, electricity, gas and other fuels
  • Major household appliances
  • Pharmaceutical products and other medical products (except cannabis)
  • Transport
  • Communications
  • University education
  • Property insurance

I then took the fourth quarter (Q4) numbers for each of those categories for all the years between 2013 and 2024 and divided them by the total population of the country for each year. That gave me an accurate picture of per capita spending on core cost-of-living items.

Overall, living and breathing through Q4 2013 would have cost the average Canadian $4,356.38 (or $17,425.52 for a full year). Spending for those same categories in Q4 2024, however, cost us $6,266.48 – a 43.85 percent increase.

By contrast, the official CPI over those years rose only 31.03 percent. That’s quite the difference. Here’s how the year-over-year changes in CPI inflation vs actual spending inflation compare:

As you can see, with the exception of 2020 (when COVID left us with nothing to buy), the official inflation number was consistently and significantly lower than actual spending. And, in the case of 2021, it was more than double.

Since 2023, the items with the largest price growth were university education (57.46 percent), major household appliances (52.67 percent), and housing, water, electricity, gas, and other fuels (50.79).

Having said all that, you could justifiably argue that the true cost of living hasn’t really gone up that much, but that at least part of the increase in spending is due to a growing taste for luxury items and high volume consumption. I can’t put a precise number on that influence, but I suspect it’s not trivial.

Since data on spending doesn’t seem to be the best measure of inflation, perhaps I could build my own basket of costs and compare those numbers to the official CPI. To do that, I collected average monthly costs for gasolinehome rentals, a selection of 14 core grocery items, and taxes paid by the average Canadian homeowner.¹ I calculated the tax burden (federal, provincial, property, and consumption) using the average of the estimates of two AI models.

How did the inflation represented by my custom basket compare with the official CPI? Well between 2017 and 2024, the Statistics Canada’s CPI grew by 23.39 percent. Over that same time, the monthly cost of my basket grew from $4,514.74 to $5,665.18; a difference of 25.48 percent. That’s not nearly as dramatic a difference as we saw when we measured spending, but it’s not negligible either.

The very fact that the government makes all this data freely available to us is evidence that they’re not out to hide the truth. But it can’t hurt to keep an active and independent eye on them, too.

1 After all, taxes are certainly a major part of our cost of living, right? And even though you could argue that tax payments deliver benefits like “free” healthcare, well transportation expenses also deliver benefits (like the ability to get to work).

Subscribe to The Audit

For the full experience, upgrade your subscription.

Continue Reading

2025 Federal Election

Highly touted policies the Liberal government didn’t actually implement

Published on

From The Audit

State capacity is the measure of a government’s ability to get stuff done that benefits its population. There are many ways to quantify state capacity, including GDP per capita spent on health, education, and infrastructure versus outcomes; the tax-to-GDP ratio; judicial independence; enforcement of contracts; and crime rates.

But a government’s ability to actually implement its own policies has got to rank pretty high here, too. All the best intentions are worthless if, as I wrote in the context of the Liberal’s 2023 national action plan to end gender-based violence, your legislation just won’t work in the real world.

The Audit is a reader-supported publication.

To receive new posts and support my work, consider becoming a free or paid subscriber.

So I thought I’d take a look at some examples of federal legislation from the past ten years that passed through Parliament but, for one reason or another, failed to do its job. We may agree or disagree with goals driving the various initiatives, but government’s failure to get the work done over and over again speaks to a striking lack of state capacity.


The 2018 Cannabis Act (Bill C-45). C-45 legalized recreational cannabis in Canada, with a larger goal of regulating production, distribution, and consumption while reducing illegal markets and protecting public health. However, research has shown that illegal sales persisted post-legalization due to high legal prices and taxation. Studies have also shown continued use among children despite regulations. And there are troubling indicators about the overall impact on public health.

The 2021 Canadian Net-Zero Emissions Accountability Act (Bill C-12). The legislation aimed to ensure Canada achieves net-zero greenhouse gas emissions by 2050 by setting five-year targets and requiring emissions reduction plans. However, critics argue it lacks enforceable mechanisms to guarantee results. A much-delayed progress report highlighted a lack of action and actual emissions reductions lagging far behind projections.

The First Nations Clean Water Act (Bill C-61) was introduced in late 2024 but, as of the recent dissolution of Parliament, not yet passed. This should be seen in the context of the Safe Drinking Water for First Nations Act (2013), which was repealed in 2021 after failing to deliver promised improvements in water quality due to inadequate funding and enforcement. The new bill aimed to address these shortcomings, but a decade and a half of inaction speaks to a special level of public impotence.

The 2019 Impact Assessment Act (Bill C-69). Passed in 2019, this legislation reformed environmental assessment processes for major projects. Many argue it failed to achieve its dual goals of streamlining approvals while enhancing environmental protection. Industry groups claim it created regulatory uncertainty (to put it mildly), while environmental groups argue it hasn’t adequately protected ecosystems. No one seems happy with this one.

The 2019 Firearms Act (Bill C-71). Parts of this firearms legislation were delayed in implementation, particularly the point-of-sale record keeping requirements for non-restricted firearms. Some provisions weren’t fully implemented until years after passage.

The 2013 First Nations Financial Transparency Act. – This legislation, while technically implemented, was not fully enforced after 2015 when the Liberal government stopped penalizing First Nations that didn’t comply with its financial disclosure requirements.

The 2019 National Housing Strategy Act. From the historical perspective of six years of hindsight, the law has manifestly failed to meaningfully address Canada’s housing affordability crisis. Housing prices and homelessness have continued their rise in major urban centers.

The 2019 Indigenous Languages Act (Bill C-91). Many Indigenous advocates have argued the funding and mechanisms have been insufficient to achieve its goal of revitalizing endangered Indigenous languages.

The 2007 Public Servants Disclosure Protection Act (PSDPA). Designed to protect whistleblowers within the federal public service, the PSDPA has been criticized for its ineffectiveness. During its first three years, the Office of the Public Sector Integrity Commissioner (OPSIC) astonishingly reported no findings of wrongdoing or reprisal, despite numerous submissions. A 2017 review by the Standing Committee on Government Operations and Estimates recommended significant reforms, but there’s been no visible progress.


There were, of course, many bills from the past ten years that were fully implemented.¹ But the failure rate is high enough that I’d argue it should be taken into account when measuring our state capacity.

Still, as a friend once noted, there’s a silver lining to all this: the one thing more frightening than an inefficient and ineffective government is an efficient and effective government. So there’s that.

1

The fact that we’re still living through the tail end of a massive bout of inflation provides clear testimony that Bill C-13 (COVID-19 Emergency Response Act) had an impact.

For the full experience, upgrade your subscription.

Continue Reading

Trending

X