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Opinion

From land grants to tax incentives: investing in Canada’s future

Published on 22/09/2011

In all the recent chatter about “foreign workers” and unfair advantages to immigrants, the policy history and rationale for targeted approaches for targeted groups has gone largely unnoticed.

It’s not as if this is new medicine. In the early 1900s, under the leadership of Prime Minister Wilfred Laurier and his Immigration Minister, Clifford Sifton, Canada sought out immigrants to settle the Prairies with a mix of incentives including land grants.

In this vein, almost all federal and provincial governments have at some point used special approaches with special incentives to support special outcomes for various groups, such as young people, women, farmers, laid off workers or aboriginals. The same is true when government targets specific industries such as forestry, energy or the automotive sector. This is after all a fundamental way for governments to deliver public policy.

What is also forgotten in the chatter is one simple fact: if immigrants prosper, so does Ontario. We benefit from education that we have not paid for, we benefit from talent that is truly global in a rapidly globalizing economy. We benefit from connections to new markets, and we are in better position to produce new products for new customers. It is no accident that Toronto has been selected by the Aga Khan to host his world famous permanent museum for Islamic Art. It is no accident that foreign students flock to Ontario, and it is no accident that we are gaining in tourism from Brazil, China and India.

The proposed tax credit is but one expression of reasonable efforts to employ immigrants at the level that they can contribute best to the economy. What is unfortunate in the ensuing debate and discussion is that a good policy idea has been distorted by politics in an election campaign.

Ontario has a choice. We can treat immigration as a cost or a benefit. If we treat it like a cost, it becomes a problem to be managed, and we look to put constraints around it and limit its effect. But if we view immigration and immigrants as assets, we will think and behave like investors, wondering how best to leverage them for maximum benefit.

Many recent immigrants who arrive as permanent residents have difficulty finding their first job in Canada. Despite being highly skilled and educated, employers often ask them for Canadian work experience either because they are unfamiliar with non-Canadian education and professional credentials, or because of unconscious prejudices they may hold. The tax credit is one way to help employers mitigate a risk they may otherwise not take.

What’s more, it’s a proven idea. Financial incentives are offered – in their case a wage subsidy – to employers in Quebec who hire immigrants or visible minorities for their first job in Canada. In 2008-09, more than 1,008 people were hired, and, of these, 80% were still employed three months after the subsidy has ended. And in case you are wondering whether the policy was used by large companies that could afford to take a risk on a staff person without the incentive, 64% of participating businesses had only 1-49 employees.

A tax credit does not, as it has been characterized by the Globe and Mail, pit unemployed people against one another. Rather it recognizes, as good public policy does, that different instruments are required for different demographics.

The tax credit is a good idea, which should be embraced by the other parties, and implemented by the next government of Ontario.

Summary

Almost all governments have used targeted approaches for targeted groups, recognising that different instruments are required for different demographics.

Topic(s)

Employment and labour, Income security