Immigration and the end of the NB slump

From my TJ column on Wednesday and by popular demand:

New Brunswick needs new sources of economic growth.  I contend that expanding immigration could be an important source of much needed new economic activity.

However, I am told the federal government is reluctant to expand the number of immigrants New Brunswick is able to attract each year.  The feds are worried that a significant number of these new immigrants will just end up in Ontario or other provinces where they may or may not be wanted. 

As a result, the federal government is now even more stringent about ensuring any new immigrants have a direct economic reason to be here such as a job or an entrepreneurial opportunity before they can be approved.

In my opinion, a lack of immigration to New Brunswick is one of main reasons why the economy has underperformed for decades and why the region is now mired in a prolonged economic slump.

Immigrant families create new demand for services in a local economy.  Assuming their spending pattern would similar to the average household in New Brunswick, adding 1,000 immigrant families with an average household income profile would generate over $65 million worth of new household expenditures in the province.  This would include over $7 million on food, $11 million on shelter and another $11 million on transportation.  These 1,000 immigrant families would spend $3.2 million on recreation and generate over $20 million worth of taxes for local, provincial and federal governments.

These thousand new immigrant families would create enough local demand to support the jobs of 70 retail salespersons, 27 chefs, 25 carpenters, 24 automotive service technicians and 13 hairstylists.  Overall, these new immigrant families would support some 1,200 service sector jobs across the provincial economy.

But we have a classic ‘chicken’ versus ‘egg’ problem.   The federal government doesn’t want to allow more immigrants to New Brunswick without jobs even though the consumer demand created by those very immigrants living in the province would be the driver of many new jobs.

The federal government should relax the rules and allow more new immigrants to come to New Brunswick.  Not willy nilly.  There should be a well thought out strategy but the objective should be a significant increase.

The main argument used against more immigrants is that they take jobs that should be filled by people currently living here.  After all, goes the reasoning, we have an above average unemployment rate and a large seasonal workforce.

We need a more nuanced view of our own labour market.

Many of the people that are chronic seasonal workers will not move elsewhere in the province to where the jobs are located and therefore cannot be viewed as a potential workforce outside their local community (at least beyond the one hour radius defined by the new EI changes).  

In addition, many of the unemployed have an education and skills profile not suited to the available jobs. 

But even among the jobs that require a basic set of skills, employers in many regions of the province are having a hard time finding workers.

Quite frankly, there are some New Brunswickers who are not interested in working fast food jobs. If the federal government holds back immigration to try and force a match between these folks and the available jobs, it could very well end up distorting local labour markets and directly contributing to weak economic growth.

Our objective should be to kick-start population growth through an ambitious immigration strategy.  This population growth will expand the demand for local goods and services and accelerate gross domestic product (GDP) growth.   It will also help generate the taxes needed to stabilize the public finances.

I am not suggesting it is all wine and roses.   Significantly boosting the number of immigrants will also bring challenges. 

But in case you haven’t noticed, we are in a slow burn in this province.  The economy is stagnant.  The workforce is rapidly aging.  We haven’t had any serious cultural renewal since the last big immigration boost in the mid-19th Century.

Immigration should be a key part of any economic renewal strategy for New Brunswick.

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5 Responses to Immigration and the end of the NB slump

  1. Immigrant says:

    The infamous PNP program on PEI attracted quite a number of immigrants to the island at one point but a lot (probably most) of them had left. The economy remained stagnant.

    Ontario certainly does not lack immigrants. How has the economy been doing there in recent years?

  2. mikel says:

    Ontario is a really weird place. The province is as deep in the red as New Brunswick, but the media virtually never talks about it. I’ve written a couple of articles here on the “Maritimification of Ontario”, because I’m pretty convinced that is what is going on. Yet the premier is out now talking about how Ontario is going to introduce its own program for changing the CPP-at least here in ontario. I guess thats the mark of a minority government with a new leader and a party bogged down by scandal.

    Here in Waterloo you may have heard that RIM is now selling off 3 million worth of buildings. As I’ve said before, virtually ALL the new industrial growth in the city was due to RIM. Several manufacturing facilities have closed, Lazyboy closed its factory close by, it tried to be sold for years, and finally the regional police bought it. So I have no idea who will buy all these buildings.

    Not often reported is that RIM actually ASSEMBLED their products right here in Waterloo. They didn’t pay much, but all that work is now being farmed out to third world asian countries. Even the local media never even mentioned it, the only way it was discussed is how it will affect share prices.

    Waterloo is different from most cities in that there are two universities and a large community college, and virtually all the new growth is large apartment buildings to house students.

  3. mikel says:

    I wanted to mention a different kind of immigrant-here in Waterloo there is a large collection of mennonites. The farmland is pretty much at a premium, so the mennonites have been spreading farther afield.

    If you look at a map you’ll notice that Sudbury is about five hours north of toronto, and if you swing left you go around Lake Huron, and even about an hour and a half along the trans canada heading west there are now mennonite communities springing up. These people have super huge families, the guy I work for has a son who has joined the new mennonite community in New Liskaard, which is even further north than sudbury! I remember reading articles about how rural places in Manitoba have also been rejuvinated. The main requisite these people are looking for is….cheap land.

    So thats an angle that unfortunately is never tapped. Its not as exotic as brazil or China, but new population is new population.

  4. Benoit Essiambre says:

    Sure a larger population helps share the burden of deficits and debt and it is true that immigrants on average don’t steal jobs as the new consumption they bring creates jobs that replace the ones they take.

    However, good quality, economically positive immigration comes from having good jobs to offer to immigrants. The first step is still to solve the unemployment problem. Right now we can’t even keep the people that were educated here and want to stay since the jobs are elsewhere. First make NB an attractive place to be career wise for natives and immigrants alike and then make sure there are no other barriers for immigrants to come. The first step is by far the most important.

  5. Erik says:

    Nice article !
    I moved from France to NB five years ago, and I’m not willing to move to Ontario! My wife is from New Brunswick and we have now 3 kids.(I guess I did my share for the population growth!)

    But the problem is not only with governments… People have also a lot to do with this.

    In my case, I did not have any problem and nobody told me that I was taking a job that can be done by a New Brunswicker… But.. Let’s be the Devil’s advocate for a bit… I’m a white guy from France working in IT! What if I was from Ouganda, black, trying to have a job in a paper mill up North?

    The example of this guy is talking by itself (He know lives in Newfoundland): http://bojanfurst.com/?p=2517

    Think about it… A lot of people don’t realize that immigration is necessary when your population is aging (and decreasing at some point – Do we have the necessary 2.1 babies per women here? Birth rate in North America is 1.9, meaning that without immigration, population is decreasing).

    I agree that it is difficult for a New Brunswicker to see an immigrant working when he just has been laid off, but this is a mentality change that needs to occur.
    As you said, we have a classic ‘chicken’ versus ‘egg’ problem. Immigrants can bring wealth to the Province but in the meantime, we still have a lot of New Brunswickers without any job… But to create jobs, we need more wealth!

    I believe that the solution will come through a better education.

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