Working Drafts

Immigration "fight" just another brain fart

TLDR: Federal cuts to immigration will have no impact on Newfoundland and Labrador, where the chronic lack of an economic development strategy holds the province back. We don’t come close to attracting the immigrants we need under the old targets and our economy continues to under-perform in metrics that matter.

You may have heard some noise last week about cuts to immigration. The governing Liberals slashed immigration solely to counteract the heat they are taking in other parts of Canada, where the housing crisis and crime are blamed on a huge jump in immigrants.

Immigration, Population Growth, and Skills minister Sarah Stoodley turned up on national media to talk about the devastating impact the cuts would have. We’d see slashes in Newfoundland and Labrador of 42% of workers desperately needed to keep the economy growing.

Stoodley told CBC’s David Cochrane she was “pleading” with her federal counterpart to consider the impact on Newfoundland and Labrador, where immigrants are “extremely” important. She told Radio Canada that our “economic prosperity relies on economic immigration." Government may be able to run a whole school for a single student but Stoodley said that we “need teachers, we need early childhood educators, we need residential construction workers. We don't have enough of them here. We need to go elsewhere looking for them, and we need them [for] the future of our province.”

A panel on CBC Radio’s St. John’s Morning Show sounded equally concerned about the cuts. But Wanda Cuff Young of Work Global Canada, Kim Crosbie of Generic Canadian University’s Harris Centre, and economist Tony Fang had a hard time describing the problem clearly.

Crosbie rattled off numbers about what she called our “demography” of 426,000 people. Roughly that number in 2012 - she was actually talking about the labour force, not population - which continued until 2021 and now there were… and that point she lost the plot and the already tiny CBC audience in all the disconnected numbers she was stumbling over. Host Jen White asked Fang to explain the economic impact of the proposed cuts and he couldn’t. She let him ramble on incoherently for the better part of five minutes before switching to Crosbie who rambled incoherently again through a pile of jargon and buzzwords about birthrates and such until time was up.

Clear the air of all the blather from official sources. Become a Bond Papers subscriber.

They aren’t alone in the struggle to make sense of what’s going on. Stoodley had the same problem. Problem for her was that the numbers she threw around didn’t add up to the claim she made about the cost to the province of the cuts. In fact what Stoodley said made it clear there’d be no impact at all. Exactly 3,050 spaces according to Stoodley, originally allocated to Newfoundland and Labrador through two federal immigration programs. In the last year, the government recruited 600 health care workers recruited, another 252 early childhood educators, and 200 nurses, which seemed to be different from the 600 health care workers.

Doesn’t matter. Stoodley said the federal cut would cost the province about 42% of the allocation. Six hundred plus 252 is 852, which is roughly half of the new ceiling of 1769. Even if you add in 200 nurses as not health care, you’d still have room to recruit up to 800 or so more people with the new lower ceiling.

The only way she started to come close to that 3,050 number was when Stoodley mentioned Ukrainians who Stoodley’s predecessor rushed in here by the planeload without jobs or any place to stay and the province has been struggling to integrate them ever since. Take the Ukrainians out as an outlier - they were clearly a brain fart to boost numbers - and we have cuts to immigration nationally that will have no obvious affect on Newfoundland and Labrador. That’s just using Stoodley’s own numbers.

Stoodley added for Cochrane another program - Temporary Foreign Workers - which the federal government wants to cut to 5% of the total labour force. In Newfoundland and Labrador, we are at 1.65%, according to Stoodley. Again, we could *double* the number of TFWs in the province and still be below the federal government’s new caps. Stoddley did not describe a problem with the federal cuts. She made it clear her own administration is falling short.

The claims from Stoodley and the CBC panel about the need for residential construction workers, early childhood educators, and health workers all coming from outside Canada to Newfoundland and Labrador also don’t line up with the information from the provincial government’s own statistics agency about job vacancies.

In each quarter, retail, service, and clerical jobs in the private sector dominate the top 10 categories of job listings across the province. Those are usually filled by people within the province, not immigrants. The job ads are not surprising since the ageing, shrinking population in most of the province means there aren’t people available to take those entry-level jobs.

CBC’s Terry Roberts spoke with a local diversity consultant - herself an immigrant - who trotted out the shop-worn line from the United States about immigrants taking jobs the locals won’t touch. Might be true in Chicago or California but in Newfoundland and Labrador service jobs and entry level jobs in many rural areas go begging because there just isn’t anyone to take them in places where the average age of the population is well into the 50s and in some places is close to the 60s. Period.

Just to show how little he knows about his former home province, Cochrane trotted out the claim the feds had to cut TFWs because Canadian employers were using them to lower labour costs. Two things: first, the lack of workers in rural Newfoundland and Labrador plus the low reliance on them as a share of labour force, tells anyone with a clue that whatever line from the feds Cochrane recited was out of touch with local reality. Second, if you talk to folks using TFWs, you’ll know that the total labour cost may well be *higher* than for a Canadian worker. The big difference is reliability.

And look, you can see the problems in rural Newfoundland and Labrador in the unemployment rate: six to seven percent in St. John’s and the Avalon and between 11 and 12% everywhere else. The participation rate - the number of people of working age who are working or actively looking for works - remains the lowest in the country at about 58%. And the declining birthrate means there are fewer and fewer local young people take up the entry level work even in St. John’s and parts of Labrador where the unemployment rate is at near historic lows. It’s not a new thing: this has been going on for the past couple of decades. The problem is that successive governments just ignored the problem.

As for skilled trades needed to build houses, they are chasing better paying work across Canada and commuting to work. They’d work in the local home construction business if the wages were competitive and there was steady work at it but in both respects, a combination of bureaucratic obstacles and the government’s own contradictory economic policies have led to a market for new homes that supplies less than demand. Local housing starts are well below historic peaks, even though Stoodley tried to claim things were going well.

Someone at CBC put up a chyron text below Stoodley as she played up the double digit growth in new home construction. The text showed the peak yearly construction of 3,900 for Newfoundland and Labrador. That’s not today. Today we are lucky to hit half that figure even though we need to build almost 10,000 homes a year by 2030, according to Canada Mortgage and Housing Corporation. Again, that’s the result of chronic policy failures by the provincial government, including by the crowd currently running the place.

If you want a metric that matters and that you can count on, check out a paper released last week by Fraser Institute/AIMS that showed public sector job growth in Canada far outstripped job growth in the private sector over the past five years. That’s a problem because the private sector pays for the public sector, as the authors noted. As they also pointed out, the use of the public sector to pull the country out of the COVID recession is also unusual in Canada.

That’s especially the case in Newfoundland and Labrador where 20 years after Danny Williams and the Pea Seas started it, unsustainable government spending continues to occupy a disproportionate part of the economy and, in its own way, deters private sector development. The administration Stoodey’s a part of has added more new debt in just nine years in office than the whole of the Muskrat Falls fiasco and they’ve added more to *that* as well.

Government energy policy is also a good example of how bad policy stunts economic growth. The renewables sector was shut down deliberately by the provincial government inf avour of the Danny Williams ego projects and even today wind energy that could push electricity ionto Quebec on new lines is officially barred from development while NALCOR screws around with Gull Island and Churchill Falls expansion. Energy development isn;t an either/or proposition but in Newfoundland and Labrador, the bureaucratic monopoly of NALCOR beggars everything else. Added costs for Muskrat Falls, a lack of transmission capability through the province, and a government policy that blocks development are all the result of an obsession with NALCOR that is as idiotic as it is unhealthy. But what’s worse, they drive away investment, drive up costs for existing businesses, and keep the province in a death spiral of higher but avoidable consumer and industrial costs and steadily growing, staggering public debt. If some of that sounds familiar, look at Alberta, where government opposition stalled renewables growth and harmed the province, as Globe and Mail subscribers read this week, a decade after others saw the same story in the Calgary Herald.

The public sector versus private sector job growth is worth talking about in itself but look at the numbers in Newfoundland and Labrador, especially the private sector growth in this province compared to other provinces. Third lowest after Saskatchewan, which actually saw its private sector shrink and British Columbia, where the private sector grow a paltry half of a percent. In Atlantic Canada, the private sector in Nova Scotia grew eight percent, in Prince Edward Island seven percent and even New Brunswick managed to squeeze out growth of two percent.

That anemic private sector growth in Newfoundland and Labrador is why immigration is underperforming. If the economy is growing, then everything else follows. People move in because there are more jobs than the locals can or will take. There’s more money from taxes for government services and less borrowing. People need houses so businesses will build them.

Stoodley’s interview was a disaster in other ways as well. Memorial University *is*using foreign students to subsidise tuition, contrary to Stoodley’s claim. Again, that’s the result of deliberate government policy to transfer wealth to the middle class through a tuition freeze. That was the middle of Newfoundland and Labrador *and* Nova Scotia as well as, initially, foreign countries. She also got the numbers dead wrong. International student enrolment is not down, as Stoodley claimed. It’s up compared to five years ago. A shade under 3,100 in 2018. Almost 5,000 in 2023, the last year for which we have full numbers: 4,889 to be exact.

We should also be mindful of another problem hidden in Stoodley’s temporary foreign worker statistic. The retention rate for TFWs in Newfoundland and Labrador has been about 83% after one year (down to 75% in the most recent five-year cohort) but about half number that remain in the province after five years. These folks are not bolstering rural Newfoundland and Labrador.

The pattern is familiar, too. Studies of physician recruitment and retention done almost 20 years ago found that roughly half the international medical graduates licensed in any given year remained in Newfoundland and Labrador within two years of arriving. They collected their Canadian credentials and moved on. That situation is worse since 2014. These days, Newfoundland and Labrador licenses fewer international medical graduates in the first place than it did historically and the bureaucratic obstacles to recruitment and retention have grown worse between government and the regulatory College in the meantime. That just adds to the shortage of physicians across the province, but especially in rural Newfoundland and Labrador.

In the economy generally, in housing, and in in population, Newfoundland and Labrador continues to struggle with disjointed, incoherent provincial government policy of the sort that created guides to help people navigate the dense bureaucratic swamp rather than drain it. Rather than make any changes at all - let alone transformative ones - the current administration prefers to play games of the sort Stoodley described to Cochrane in the hopes that by giving the federal government whatever it wants on one thing, they will get a tiny crumb in exchange on something else. In this case, they hope to keep an immigration number that they cannot hope to meet anyway, all in an imaginary plan for economic growth. Look at the numbers: there’s no meaningful growth. The cuts don’t matter.

Playing games is just another brain fart. Even if the province gets some cash, as with the Hibernia money, inevitably the cash goes to unsustainable spending rather than to the needed purpose of a viable way to keep electricity rates from crushing consumers and businesses alike. And the spectre of Muskrat Falls, among other problems in the provincial government, continue to deter investment and economic growth. Compare what’s happening in Newfoundland and Labrador to Nova Scotia, where a successful government will win easily the general election just called.

Meanwhile in Newfoundland and Labrador, what we gave away in the process - like control of the offshore - was far more valuable. What Stoodley was doing last week was playing more games of the sort her colleagues pioneered. Like the Ukrainian scam to make it look like our immigration numbers were better than they are while - at the same time - having no housing or jobs for them. The reality is the latest federal immigration cuts will have no impact on Newfoundland and Labrador because we are so badly underperforming on every metric that matters and over-performing on all the ones that hurt.

---