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.