2 The Canadian Model of Immigration and Welfare

By Edward Koning and Keith Banting, Queen’s University Kingston, Ontario

Introduction

In international comparisons, Canada is often presented as a role model in the way it integrates immigrants economically (Aalandslid 2009). Immigrants to Canada have traditionally experienced comparatively few problems in entering the labour market and becoming economically self-sufficient. On a discursive level, Canada publicly embraces immigration as a cornerstone of its history and a promising resource for the future (Canadian House of Commons 2003, Citizenship and Immigration Canada 2009a). Canada’s experience with immigration is, of course, long. During the twentieth century, it has admitted more than 13 million immigrants. At times, as many as 2.5 million came within the span of ten years. With the passing of the Immigration Act of 1967, Canada removed its historic preference for Western immigrants, and started to welcome a much more diverse group of newcomers (see Figure 2.1). In the period from 1998 to 2007, around 80 percent of the immigrants Canada admitted came from non-Western countries.

Kilde: Citizenship and Immigration Canada (2009b), and authors’ calculations.

As a result of the long history of immigration, foreign-born citizens make up a large part of the Canadian population, and the percentage continues to rise. In 1991, 15.5 percent of Canadians was foreign-born, in 2006 that percentage had gone up to 19.8 percent, and the number is expected to rise to between 25 and 28 percent by 2031 (Statistics Canada 2010). The immigrant population has not settled evenly across the country. Only 1.3 percent of all immigrants live in the Atlantic Provinces (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick). Conversely, more than 73 percent of the immigrant population of Canada is resident in either British Columbia or Ontario. The biggest cities in these provinces alone (Toronto and Vancouver) host no less than 51 percent of the entire Canadian immigrant population. To a large degree, therefore, a story about immigrants in Canada is a story about immigrants in these two provinces.

This document outlines the Canadian model of immigration and welfare, a model that can be summarized by three main characteristics.

First, Canada employs a selective immigration strategy that is aimed at minimizing immigrants’ eventual reliance on state support. Under its famous points system, Canada selects economic immigrants with high levels of human capital who can be expected to integrate well economically. In addition, family class immigrants who want to enter Canada in order to be reunited with their family require a ‘sponsor’ who commits to supporting them economically for a significant period of time. Finally, even those immigrants who are admitted for humanitarian reasons are encouraged to avoid heavy reliance on government transfers. Refugee claimants, for instance, have access to temporary work permits so they are not forced to depend on the state while their application is being considered. In combination, these provisions significantly reduce the reliance of immigrants on social assistance and other cash transfers.

The second component of the Canadian model of immigration and welfare is a broad and generous set of settlement and integration programs. Immigrants to Canada can make use of a wide range of publicly funded services, including language training, information services, employment assistance, and counselling. Over the last years, the budgets for these programs have been increasing consistently, even in times of budget pressures.

Third and finally, immigrants have, with a few exceptions, immediate and undifferentiated access to social benefits and are not confronted with the long residency requirements some European countries employ. In comparison with the Scandinavian and continental European cases, however, the Canadian welfare state is small and income support programs tend to provide limited benefits and, in the case of unemployment benefits, for limited duration. Labour market policy – especially since the mid-1990s – is more aimed at getting people ‘from welfare to work’ than at offering generous passive benefits to those who have not been able to make that transition.

For a long time, this model seemed to have been successful. Immigrants to Canada have traditionally experienced a comparatively smooth and rapid economic integration, and their reliance on income transfers such as unemployment benefits and social assistance was lower than among native-born Canadians. In recent years, however, the model has come under strain. There is increasing evidence that more recent cohorts of immigrants to Canada perform less well than their predecessors in terms of their performance in the labour market, with the result that reliance on government transfers has increased. Nevertheless, in comparison to other immigration countries, immigrants to Canada are still comparatively well off.

This report is structured as follows. Section two discusses how Canada’s immigration policy is designed with the intent to maximize the chances that immigrants will contribute economically. The third section reviews integration and settlement services. In section four, we discuss immigrants’ eligibility for the core programs of the Canadian welfare state. The final section reflects on the success and contemporary problems of the Canadian model.

Immigration policy

An exploration of welfare use among immigrants in Canada should begin with a discussion of immigration and admission policies. After all, immigration policy itself is a crucial ingredient of Canada’s socio-economic integration strategy. In contrast to the guest-worker programs of West-European countries in the 1960s, Canadian immigration policy has always been designed with the purpose of making permanent citizens out of newcomers (Citizenship and Immigration Canada 2009a, 23). For that reason, Canada employs a selective admission policy designed to minimize the likelihood that these new citizens end up depending on state support for their survival.

A second reason to begin the discussion with immigration policy is that the ways immigrants interact with the welfare state depend to a large degree on the ‘type’ of immigrant we are talking about. Since 1976, Canada admits three categories of immigrants (see Figure 2.2). First, economic migrants have been selected on the basis of stringent requirements, the so-called points system. Applicants under this category are assigned a score according to a number of criteria that are deemed important predictors of economic success in Canada, such as education and training, knowledge of the official languages, and age. Only those applicants who meet or exceed the minimum number of points are admitted as an economic migrant to Canada. As a result, the human capital of migrants who enter through this category is high. Among the economic migrants that were admitted to Canada over the last ten years (1999-2008), 62 percent had a BA degree or higher and 64 percent spoke at least one of Canada’s two official languages (Citizenship and Immigration Canada 2009b).

Over time, the focus of the point system shifted from selecting on the basis of occupational demand in the Canadian labour market to selection on the basis of more flexible skills (Knowles 2007, 199-260). Selection procedures failed to keep pace with labour market dynamics, and immigrants who were admitted on the basis of specific occupational skills often found the demand for those skills had decreased by the time they were admitted to Canada. In the 1990s, Canada therefore adopted a broad human capital approach to immigrant selection. In the last two years, there has been yet another shift in selection criteria. In response to the greater difficulty even highly educated economic immigrants have been experiencing in finding employment commensurate with their skills, there has been a move back to the needs of specific regional labour markets. In addition, the rapid expansion of a program known as the Provincial Nominee Program gives greater priority to immigrants with a specific job offer from an employer (Alboim 2009). However, because these changes are very recent, their consequences for the welfare state are unclear, and they are therefore not considered in detail in this report.

The second group of immigrants are categorized under the label ‘family reunification’. For this category, Canada relies heavily on sponsorship agreements. Under such agreements, immigrants need a ‘sponsor’ who must have the capacity to support them economically and must commit to do so.1 Depending on the relationship with the sponsor, this means that immigrants in this category are ineligible for most welfare programs for a period up to 10 years. The sponsorship mechanism is critical for the interaction between immigration and the welfare state in Canada, and will therefore be discussed in more detail in Section IV.

Finally, each year Canada admits a sizeable number of refugees. On average over the last ten years, about 28,500 refugees (the equivalent of 9 refugees per 10,000 citizens) have entered the country each year. In contrast to the first two categories, immigrants in this category can be expected to make considerable use of government transfers, in particular in the first years after being admitted. Refugees in Canada can be subdivided into three categories: government-assisted refugees, who are explicitly invited to seek refuge in Canada and are brought in and protected by the state; privately sponsored refugees, who are selected and supported by voluntary groups; and landed-in-Canada refugees, who have come to Canada on their own account and have successfully applied for refugee status (Yu, Ouellet and Warmington 2007). Refugee claimants (who in Europe are often called ‘asylum-seekers’) are considered temporary residents of Canada until their status is determined (therefore, we discuss this group below when we address temporary immigrants).

Over the years, there have been many changes in the requirements for being considered a refugee. At the end of the 1980s the number of refugee claimants increased considerably, and the Conservative government (1984-1993) adopted a number of bills designed to decrease the recognition rate. The 1987 Bill C-84 (also known as the ‘Refugee Deterrents and Detention Bill’), in combination with the 1992 Bill C-86, introduced «fingerprinting of refugee applicants to discourage welfare fraud, public hearings of refugee cases, harsher detention procedures, and deportations without hearings» (Knowles 2007, 239). The reforms also included a proposal to deny refugee claimants who entered Canada through a safe country in order to avoid ‘asylum shopping’ (Hardy and Phillips 1999), but this proposal did not come into effect until 2004, and only as a bilateral agreement with the United States. Even more recently, federal Immigration Minister Jason Kenney has drafted a list of countries that are considered ‘safe’. Refugee claimants from these countries cannot appeal if their application is denied (Citizenship and Immigration Canada 2010b). Despite all these changes, however, Canada still has one of the highest refugee recognition rates in the world, and continues to attract and admit a sizeable number of refugees (UNHCR 2009).

Over the last thirty years, Canada has admitted proportionately more and more economic migrants, as Figure 2.2 demonstrates. Whereas economic migrants constituted about 30 percent of all incoming immigrants in 1984, this percentage has risen to 63 in 2008. Much of this increase can be explained by economic considerations on the part of the Canadian state. In personal interviews with political scientist Anne Boucher, Canadian policy-makers indicated that the increase in the proportion of economic migrants was driven by concerns about growing welfare dependency among family migrants and refugees during the recession of the 1990s (Carney and Boucher 2010).

Kilde: Citizenship and Immigration Canada (2009b).

Even though Canadian immigration policy mostly targets permanent migrants, this does not mean that Canada is deprived of temporary residents. Most of these immigrants fall under one of three categories: temporary workers, foreign students, and refugee claimants. In 2008, Canada had almost 590,000 temporary residents. Figure 3 traces the annual intake of temporary migrants from 1989 to 2008 (the graph illustrates so-called ‘new entries’ only; temporary migrants who were already residing in the country are not included in these data). As Figure 2.3 shows, each year Canada admits a high number of (new) temporary migrants, at times even higher than the number of permanent immigrants. This is all the more interesting when we take into account that a sizeable number of these migrants ultimately become permanent residents. Most obviously, refugee claimants acquire permanent residency if their application for refugee status is successful. But since 2008, international students and highly skilled foreign workers can also apply for citizenship through the so-called Canadian Experience Class, an amended version of the points system that heavily rewards the experience of having worked or studied in Canada (Alboim 2009).

As will become clear in the following sections, residence status is of crucial importance for eligibility for integration services and welfare programs. International students and temporary workers can access only basic health services, and all types of temporary migrants are barred from settlement services, including language training. At the same time, it is worth noting that Canada has a unique strategy of dealing with refugee claimants. In contrast to many other countries in the world, Canada extends temporary work permits to refugee claimants. Between 2003 and 2005, 76 percent of claimants acquired a temporary work permit (Yu, Ouellet and Warmington 2007, 25). This practice is not without criticism. Some say the jobs that are available with a temporary work permit are poorly paid and insecure, and suggest that making claimants depend on that kind of employment while the Immigration and Refugee Board handles their application (a process that at times lasts as long as 4.5 years) puts them in an unacceptable limbo (Omidvar and Richmond 2005). Others say that extending temporary work visas allows ‘bogus’ refugees to get a first foot in the door, making it more difficult to deport them once their applications are denied (Gallagher 2003). Despite these criticisms, for those applicants who eventually are admitted, their experience with a certain degree of self-sufficiency in the Canadian labour market will make the transition to full inclusion more smooth than for refugee claimants in West European countries who are prohibited from working and forced to depend on the state while their status is being determined (Ghorashi 2005, Dwyer 2006, 72).

Kilde: Citizenship and Immigration Canada (2009b).

Integration and settlement programs

Once immigrants are admitted as permanent residents of Canada, they can make use of a wide range of settlement programs (Wong 2008). The overwhelming majority of these services are designed primarily to facilitate newcomers’ economic integration. Language training and employment assistance perhaps most obviously illustrate that the same economic considerations that inform Canada’s immigration policy (including a determination to minimize the chance that new citizens of Canada end up as welfare dependents) are important in its integration policy as well.

As noted above, settlement and integration services are available to permanent residents only, even though there have been calls to offer some of these services to refugee claimants (Canadian House of Commons 2003) and other temporary migrants (Alboim 2009) as well. There are considerable provincial differences in the range of services that are offered, but the most expensive programs are federally funded and are available throughout the country (for more comprehensive and detailed overviews of all offered services, see Biles 2008).

Language programs are one of the top priorities for Citizenship and Immigration Canada (CIC). The government funds a basic language program for all immigrants for the first three years after being admitted. This program, called Language Instruction for Newcomers to Canada (LINC), so far has proved particularly useful for refugees and sponsored immigrants, but came under criticism because most economic immigrants need language training at a higher level (Canadian House of Commons 2003). In response, CIC created a program called Enhanced Language Training (ELT), designed to offer high-level and occupation-specific language training. This program has only been offered recently (the program started as a pilot project in 2003), but the results so far are promising. An evaluation in 2008 concluded that «ELT is, in general, a successful initiative that meets the immediate needs of the target audience» (Citizenship and Immigration Canada 2008).

The Immigrant Settlement and Adaptation Program (ISAP) funds a wide variety of services, including reception of immigrants, orientation, translation, referral, employment assistance, and counselling (Biles 2008, 142-7). One of the projects in the ISAP is the so-called Host Program, which couples new arrivals with volunteering native-born Canadians. These ‘hosts’ show immigrants around in everyday life, for instance assisting with banking, grocery shopping, or enrolling children at school. Refugee programs are also part of the ISAP. Sponsored refugees can await pick-up at the (air)port of entry, accommodation, and, if needed, health and mental services. In addition, refugees are eligible to receive financial support (the Resettlement Assistance Program, RAP) for at least the first year after arrival. A final example of ISAP projects are overseas services. In 1998, CIC started Canadian Orientation Abroad, a program that funds information sessions on living and working in Canada to future immigrants. Given the success of this program, there have been some discussions about the need to expand overseas services and to offer internships, mentor programs, and bridge training (re-schooling programs that help skilled immigrants prepare for the Canadian labour market).

In addition to CIC, several government departments offer services that facilitate the integration of immigrants, even though they do not target immigrants specifically. Canadian Heritage funds a number of such programs. The Multiculturalism Program, for instance, aims to help minorities (including immigrants) participate in decision-making procedures, to contribute to the drafting of diversity-tailored policies, and to fight racism. Another example is the Official Languages Program, which funds courses in the official languages and offers services to official language minorities (that is, English-speaking Canadians in the province of Quebec, and French-speaking Canadians elsewhere). Part of the program consists of assisting the integration of Francophone immigrants in French-speaking communities outside Quebec.

Recently, Canadian Heritage, as well as CIC and Human Resources and Social Development Canada (HRSDC), has become involved in addressing the problem that the credentials of many high-skilled immigrants are often not recognized by Canadian employers. According to some observers, this problem is one of the most significant obstacles to the successful economic participation of high-skilled immigrants (Reitz 2001, Girard and Bauder 2007, Ferrer and Ridell 2008). Immigrants in this predicament themselves have even accused Canadian immigration policy of being ‘immoral’, arguing that the qualifications that made their applications successful turned out to be seriously discounted once they entered the labour market (Canadian House of Commons 2003, 12). These critiques have been taken seriously by the Canadian government. In 2003, HRSDC and Canadian Heritage launched the Foreign Credential Recognition Program to assist immigrants in having their qualifications recognized. In 2007, the government extended these services with the founding of the Foreign Credentials Referral Office as part of CIC. In january 2009, federal and provincial governments agreed on a ‘Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications’. The Framework, which is planned to go into effect at the end of 2010, aims to make the process of credentialization more transparent and brief: «A key feature of the Framework is a clear commitment to timely service. The intent is that within one year of submitting a complete assessment application for licensure, an individual will know whether his or her credentials have been recognized, and if not, the individual will be informed of specific additional requirements for licensure or directed toward related occupations commensurate with their skills and experience» (Citizenship and Immigration Canada 2010a, 7).

As mentioned earlier, these integration and settlement services are funded by federal government institutions. However, most of these services are provided by a variety of non-governmental organizations. The language programs, for instance, are predominantly organized by service provider organizations. The Multiculturalism Program funds issue-based organizations to help fight racism. The Foreign Credential Recognition Program, in turn, relies heavily on the cooperation of the private sector. Finally, the government funds a large number of ethnic organizations to help provide information, counselling, and financial services to immigrants and ethnic minorities. These organizations are sometimes criticized for lacking democratic accountability (Richmond and Shields 2005), but many observers agree that these associations prove to be useful government partners because of their sensitivity to the needs of specific communities (Chekki 2006). In a study of Ghanaian immigrant associations in Toronto, Thomas Owusu argues that these associations help to overcome «linguistic barriers, discrimination, [and] other obstacles» (Owusu 2000, 1158). In an analysis of a Chinese association in Vancouver, Shibao Guo concludes that the organization «has increased the access of Chinese immigrants to settlement and other social services, which they were entitled to but deprived of, owing to the failure of the state and mainstream social service agencies» (Guo 2006, 20).

Welfare programs

In comparison to its counterparts in Scandinavia and continental Europe, Canada’s ‘liberal’ welfare state is small. Only a few of its programs are universal, and the transfers that target the economically unsuccessful (Employment Insurance and Social Assistance) provide comparatively low benefits for limited periods of time. In 2005, Canada spent only 16.5 percent of its GDP on social spending, ten percentage points less than countries such as Austria, Denmark, France, and Sweden. Canada’s poverty rate of 12 percent is roughly twice as high as the rate in these four countries, and Canada ranks 18th among the 30 OECD countries in inequality statistics (OECD 2009).

This section discusses the eligibility of immigrants for each of the major programs of Canada’s welfare state. In brief, temporary residents can make use of few benefits, even though there are some exceptions for refugee claimants. Conversely, with the exception of family migrants – who are ineligible for most benefits for the duration of their sponsorship agreement – permanent residents have immediate, full and equal access to almost all programs. Nevertheless, it has been observed that some programs exclude immigrants in practice, even though that might not have been the explicit intention. Social insurance programs, in which eligibility for benefit depends on employment and the payment of contributions by employer and employee, provide benefits to those who have integrated in the labour force but not to those who have had trouble doing so. As a result, immigrants receive less than native-born Canadians from the contributory programs providing unemployment benefits and pensions. Moreover, some authors have argued that recent cutbacks to welfare programs (in particular, reforms to Social Assistance and Employment Insurance in the mid-1990s) have hit immigrants disproportionately hard.

Old age benefits

There are two major public sources of income specifically targeted at senior citizens.2 First, the Canadian and Quebec Pension Plans (CPP/QPP) are contributory pensions. There is no direct restriction on immigrants accessing this pension, but the benefits are determined on the basis of lifetime earnings in the country. This obviously means that (especially recent) elderly immigrants receive less from the CPP/QPP than native-born Canadians (Baker, Benjamin and Fan 2009).

In contrast to the CPP, the Old Age Security (OAS) is a universal benefit funded through tax revenues and does not depend on contributions.3 The extent to which immigrants have access to this program is slightly complicated. Before 1977, there was a residence requirement of ten years4, meaning that every elderly citizen who lived at least ten years as a permanent resident in Canada received a full OAS benefit, while everyone who did not meet that requirement received nothing. In 1977, the program was amended. The ten-year minimum residence requirement was maintained, but the benefit was otherwise made proportional to the number of years spent in Canada. Since then, only those who have lived at least 40 years in Canada receive a full OAS, and everyone who has been in the country for a shorter time receives a proportionally lower benefit (for instance, someone who has spent 25 years in Canada when reaching retirement age receives 25/40 = 63 percent of a full OAS) (Marier 2008, Carney and Boucher 2010).5

However, immigrants who are eligible for even a small pro-rated OAS payment are eligible for additional support from the Guaranteed Income Supplement (GIS). The GIS is an income-tested supplement to the OAS which is available to poor elderly persons in Canada, and about a third of all elderly Canadians receive a full or partial GIS benefit. Since 1984, poor and low-income immigrants receive a ‘super’ GIS, which brings the total benefit to the same level it would have been if the immigrant would have received a full OAS benefit. In keeping with this analysis, Michael Baker and his colleagues (2009) find that on average, immigrants receiving a partial OAS receive the same or more total transfers than native-born Canadians or immigrants who receive a larger OAS benefit.6

Low and middle-income elderly immigrants who have been in the country for at least ten years are therefore protected. However, it would be wrong to suggest the restrictions on OAS are trivial. Immigrants who have been in Canada for less than 10 years receive neither OAS nor the super GIS.7 As a result, on average, elderly recent immigrants receive considerably less benefits, and are more likely to be poor than any other group of Canadians of retirement age (Baker, Benjamin and Fan 2009). Last year (June 19th, 2009), Liberal Member of Parliament Ruby Dhalla tried to address this by proposing Bill C-428, which reduces the residence requirement of OAS to three years. However, Bill C-428 is a private member’s bill rather than a government-sponsored bill, and is therefore unlikely to pass.

Health care

According to the Canada Health Act, provincial governments are required to offer universal health care to its citizens and permanent residents. Nevertheless, the eligibility requirements for these programs can differ somewhat between provinces (see Table 2.1), especially as far as immigrants are concerned. For one thing, the provincial health care programs of three provinces (British Columbia, Ontario, and Quebec) have a three month waiting period for new arrivals. For Canadians who move from one province to another, this simply means that they are covered by the provincial health care program of their ‘old’ province during this waiting period. Immigrants, however, need to secure temporary private health insurance for the first three months in these provinces.8 Family migrants have access to basic health care in all provinces, but for the duration of their sponsorship agreement they need to rely on their relatives to cover supplementary health costs not covered by the national program (such as dental care and eye care). In Ontario, where eligibility requirements are among the most stringent in the country, eight immigrants contested their exclusion before Court, but their appeal was denied (Irshad v. Ontario, 2001).

There are considerable provincial differences in the eligibility of temporary workers and international students. While some provinces (such as Saskatchewan, Alberta, and British Columbia) offer health care to these temporary immigrants, other provinces exclude them from coverage. As Table 1 shows, in all provinces refugee claimants are excluded from provincial health care programs. However, they receive basic coverage from the federal government through the Interim Federal Health Program (IFHP, see note 8).

Child benefits

The Canada Child Tax Benefit (CCTB) is a monthly income-tested transfer which goes to low and middle-income families with children under the age of 18. In addition, the federal government offers a National Child Benefit Supplement (NCBS) which is more tightly targeted on low-income families with children. All permanent residents are immediately eligible for the CCTB and the NCBS. Temporary immigrants, including refugee claimants, can only apply for child benefits after having lived in Canada for 18 months, and only if they have valid temporary residence permits for the 19th month and beyond.

Employment Insurance

Unemployment Insurance was first introduced in Canada in 1941, but was considerably enriched in 1971. After those reforms, Canada offered citizens who lost their jobs a comparatively generous unemployment benefit: «virtually all employees were included; income replacement rates reached as high as 75 per cent for claimants with dependants and 67 per cent for those without dependants [..] and support could be claimed after only eight weeks of work» (Olsen 2008, 329). However, starting with a 2 billion dollar spending cut in 1989, and culminating in the 1996 transformation of Unemployment Insurance into a new program called Employment Insurance (EI), benefits became decidedly less generous (Banting 2006). Spending decreased, the replacement rate dropped, benefit duration was shortened, and, as Figure 2.4 illustrates, eligibility requirements were tightened to such an extent that the percent of unemployed citizens receiving EI plummeted from 80 to 40 percent (Evans 2002).

Kilde: Canadian Socio-economic Information Management System (CANSIM); calculations by Caledon Institute of Social Policy.

Because Employment Insurance is a contributory plan, it inevitably privileges those who have integrated in the labour force over those who have had trouble doing so, and can therefore be understood as being exclusionary towards a proportion of the immigrant population (Handler 2009). Some of the changes in eligibility requirements are of particular relevance to immigrants (Mahon 2008, 356). First, as a result of the reform of the mid-1990s, the number of hours of work required to be eligible for EI has tripled for new labour market entrants from 300 to 910 hours – the rough equivalent of half a year of full-time work (Evans 2002, 89). Second, the 1996 reform made it more difficult for the long-term unemployed and part-time employees to qualify, two categories among which immigrants are overrepresented (Shields 2004). Third, eligibility cuts also reduced benefits to seasonal workers, many of whom are immigrants (Groulx 2009, 15).

A more general point of interest regards the regional variation in the percentage of unemployed Canadians who have access to EI benefits. The EI program provides more generous terms for both eligibility and benefits in poorer areas with high unemployment rates (Banting 2006, 425). As a result, there can be huge differences in the EI coverage rates: whereas in 2004 92.7 percent of the unemployed on Prince Edward Island received EI benefits, the comparable figure for the city of Ottawa was 20.7 percent (Battle, Mendelson and Torjman 2006). These differences reflect the longstanding tradition of intensely regionalized politics in Canada, and the political weight of poorer parts of the country in national political life. However, it turns out that the coverage rates tend to be lower in areas where the percentage of immigrants is higher. As Table 2.2 illustrates, for example, whereas in Newfoundland and Labrador, where 1.7 percent of the population is immigrant, 93 percent of the unemployed receive EI, this percentage is only 29.7 for Ontario, where immigrants make up 28.3 percent of the population. A similar relationship is detectable when one compares some of the major cities of Canada. In Saint John’s, with an immigrant community of only 2.9 percent, 51.5 percent of the unemployed receive EI. In Toronto, where almost one in two residents is an immigrant, the coverage is only 22.3. Of course, these correlations do not necessarily mean that unemployed immigrants are less likely to receive EI than other unemployed Canadians in the same region. These statistics do show, however, that immigrants are less likely than native-born citizens to live in areas where the EI benefit structure is generous.

Social Assistance

Social Assistance (SA) is a provincial program offering benefits to people in financial need. It is a ‘last-resort’ program, meaning that in most cases, applicants who make use of other types of government transfers are ineligible for SA. Not only the level of the benefit, but also the exact eligibility requirements of the program differ from province to province (see Table 2.3).

As Table 2.3 shows, there is considerable provincial variation in the access of immigrants to Social Assistance. For instance, in British Columbia (the second-most popular destination province for immigrants) even foreign workers and international students have equal access to SA, while in all other provinces these temporary migrants are barred from this program. At the same time, there are some commonalities. First, the federal government prohibits any provincial residence requirement for access to SA. In 1997, British Columbia tried to implement a waiting period for newcomers from the rest of Canada anyway, but was induced by the federal government to drop the requirement (National Council of Welfare 1997). Therefore, in all provinces permanent immigrants, with the exception of family migrants under a sponsorship agreement, are immediately eligible for Social Assistance. Refugees receive federal financial assistance for at least the first year after being admitted to Canada through the RAP, and are therefore only eligible for SA afterwards.

Most provincial variation, and most political debate, regards the eligibility of refugee claimants and family migrants for Social Assistance programs. To start with the former, New Brunswick and Alberta bar all refugee claimants from SA, while other provinces are willing to offer them SA under certain circumstances. Some observers are afraid that this practice invites abuse of the system (Gallagher 2003). Federal Immigration Minister Jason Kenney, for instance, has recently argued that «the generosity of our social welfare schemes [..] creates incentives for dubious refugee claims» (Mahoney 2010). Unfortunately, comprehensive data on the number of refugee claimants on SA is unavailable. It seems worth repeating, however, that SA is a program of last resort, which offers only very limited benefits. For a single employable person, the transfer ranged in 2008 from $3,447 a year in New Brunswick to $7,947 in Newfoundland and Labrador. On average, social assistance amounts to only about 38 percent of the Canadian poverty line, which is known as the Low Income Cut Off point (LICO) (National Council of Welfare 2009).

Another issue of controversy is the use of SA among sponsored family migrants. As discussed above, these immigrants are admitted on the condition that a relative would sponsor them, signing a formal undertaking with the state to support them economically. The period of sponsorship is 3 years if the immigrant is the spouse or a child older than 22, and 10 years for all other relatives. While sponsorships undoubtedly reduce immigrant reliance on social assistance, they are not a perfect instrument. Individual sponsorships can break down for various reasons. Marriages or family relationships can collapse, exposing sponsored newcomers to being abandoned. Sponsors can get into economic difficulty themselves; in fact, sponsorship breakdowns tend to rise during recessions. In addition, the Canadian government has had difficulty monitoring sponsorship agreements, because the federal administration of immigration status is not linked to the provincial SA administration. Provinces are often unaware of sponsorship agreements that SA applicants might be on, raising the possibility of fraudulent claims.

Recently, however, provincial governments have exerted greater effort to prevent sponsored immigrants from using SA. In the mid-90s, the province of Quebec started to monitor sponsors who did not live up to their agreement more closely, and began to garnishee their wages (National Council of Welfare 1997). In 2004, when it was reported that 7500 sponsored immigrants in Ontario (about 2 percent of sponsored immigrants) were on SA, the province started to contact sponsors and inform them that SA benefits paid to the immigrants they are supposed to sponsor will be considered a debt to the government of Ontario. This debt can only be waived under extraordinary circumstances, such as if the sponsor is criminally convicted, is bankrupt, receives SA, OAS, or GIS, or is living below the LICO. In this way, Ontario has been able to bring down the number of sponsored immigrants on SA to 5,000 by september 2009. Recently, eight sponsors who were forced to repay an SA debt appealed to the courts to have their debt waived (Mavi v. Canada, 2009), but the outcome of this legal challenge is still uncertain.

Over the last twenty years, there have been significant SA reforms. While these have not formally targeted immigrants, according to some authors they have had particularly negative consequences for immigrants and other vulnerable groups (Evans 2002, 87). From 1967 to 1995, the federal government paid 50 percent of all provincial SA costs in accordance with the Canada Assistance Plan (CAP). In 1996, the CAP was replaced by the Canada Health and Social Transfer (CHST), a block transfer to provinces contributing to the cost of social assistance, health care and postsecondary education. In addition, the total federal transfer for these programs was reduced, as part of a general program to reduce the federal deficit. Because the size of the transfer is unaffected by the level of SA expenditure, this reform introduced an incentive for provinces to lower the cost of their SA programs. Ronald Kneebone and Katherine White (2009) observe that with the exception of Newfoundland and Labrador, SA benefits have consistently decreased in all provinces since the introduction of the CHST. In addition, the provinces of Ontario (1996) and Alberta (2003) experimented with ‘workfare’, which among other things entailed a tightening of eligibility requirements (Klassen and Buchanan 2006). All in all, these reforms suggest a downsizing of welfare benefits over the last two decades (see Figure 2.5), with important consequences for needy citizens, including portions of the immigrant population.

Kilde: National Council of Welfare (2008).

Other obstacles to immigrants’ integration in the welfare state

In addition to the formal and implicit barriers to inclusion of immigrants discussed above, there is evidence that even when theoretically immigrants have full and equal access to welfare programs, they make less use of these services than their native-born counterparts in the same socio-economic situation. In a now somewhat dated report, Jeffrey Reitz (1995) reviews almost 400 studies on this subject in Canada, the United States, the United Kingdom, and Australia, and concludes that many immigrant groups make less use of welfare programs than they are formally entitled to. Reitz’s report and more recent literature on the Canadian case in particular suggest at least three reasons for this.

First, immigrants are less likely to be aware of the existence of welfare programs than native-born citizens (Ma and Chi 2005). Laura Simich and her colleagues conducted a number of interviews with social service providers in Canada, and were told that immigrants often have trouble understanding which services are available: «learning ‘where to go for what’ is difficult for most newcomers, who encounter a confusing, fragmented health and social service sector» (Simich, et al. 2005, 261). Second, many authors note cultural and linguistic barriers to the use of welfare services. In particular, it has been observed that immigrants from Asian countries «are reluctant to seek help from outsiders, especially those representing formal organizations» (Ma and Chi 2005, 156) and try to solve their socioeconomic problems within their family or ethnic network. To overcome these barriers, there have been attempts in Canada to ‘ethnically match’ social services, for instance by making sure that the doctor who serves Asian clients is Asian as well (Weinfeld 1999). Finally, some authors argue that immigrants have not been able to make full use of welfare services because of discrimination (Rice and Prince 2000, 157-81). Unfortunately, the available literature does not offer any systematic analysis of discrimination of immigrants in everyday provision of social services, so it is difficult to assess to what extent this explanation accounts for the problem that immigrants do not always make use of the programs that are theoretically available to them.

Success and contemporary problems

As stated in the introduction, until recently at least, the strategy Canada has employed for the economic integration of immigrants was widely seen as a success, especially in comparison to other countries of immigration. Comparative studies have consistently found that immigrants to Canada tend to find a job and to attain high wages more quickly and more often than immigrants to most other host countries (Lewin-Epstein, et al. 2003, Statistics Canada 2003, Van Tubergen 2006). As far as use of government transfers is concerned, Canada has long been an exception to the world-wide pattern that immigrants are heavily overrepresented among welfare recipients, especially in the first few years after entering the country. In fact, for a long time researchers have found that immigrants tend to receive less government transfers than native-born Canadians, and that their use of welfare programs increases with length of stay in the country (Akbari 1989, 426, Baker and Benjamin 1995a, 1995b, Sweetman 2001, Grubel 2005).

Reflecting this historical pattern of immigrants’ socio-economic success, immigration has hardly ever been politicized as a negative development in Canada. In fact, government officials and other politicians regularly express pride in Canada’s history of immigration, and there has never been a successful anti-immigrant political party in Canada. The short-lived Reform Party (in parliament from 1993 to 2000) did champion a restrictive and selective immigration policy (Patten 1999, 36-9), but most observers agree that its sudden electoral success reflected its general opposition to the political ‘establishment’ and in particular, to Quebec’s privileged position in the Canadian federation (Clarke, et al. 2000). Indeed, Daniel Hiebert describes the many clashes between the Reform Party and their political opponents as follows: «In this maelstrom, with acute political sensitivities and sharp discord on almost every conceivable topic, the issue of immigration has somehow remained virtually sacrosanct» (Hiebert 2006, 38). The party quickly learned that its anti-immigration position limited its growth potential, and by 1997 it had reversed itself, and began to advocate an increase in immigration levels.9 Therefore, describing ‘Reform’ as an anti-immigrant party, similar to the Belgian Vlaams Belang or the Norwegian Fremskrittspartiet would be a mischaracterization.

In the absence of strong anti-immigrant elites, the Canadian public tends to have positive attitudes towards immigrants (Jedwab 2008). Cross-national surveys consistently find that Canadian respondents are more likely to be in favour of immigration and to think that immigrants contribute to society than respondents from most other countries of immigration (see Table 2.4).

As noted earlier, the economic integration of immigrants has slowed considerably. More and more researchers find that recent cohorts of immigrants have higher levels of welfare recipiency, and that by now immigrants are at least equally likely as native-born Canadians to receive welfare benefits. In their first ten years in the country, they now make more use of some benefits (De Silva 1997, DeVoretz and Pivnenko 2004).

The differences are not big. But as Table 2.5 shows, immigrants are now more likely to make use of government transfers, to rely on these transfers for a larger part of their income, and to receive a higher sum of government transfers than native-born Canadians do. For understandable reasons, recent immigrants tend to make little use of old age benefits (OAS/GIS and CPP/QPP) and are more likely to receive Employment Insurance. Figure 2.6 depicts the average amount of SA and EI benefits non-immigrants and immigrants have received from 1982 to 2007 in 2007 Canadian dollars. Two trends in this graph seem worth emphasizing. First, the graph clearly illustrates how the reforms in the mid-1990s described above (the transformation of UI to EI, and cuts to social assistance), plus the return of more robust economic growth, diminished overall transfers. Second, and more important for the current discussion, the gap between immigrants and non-immigrants has decreased over time. Whereas in 1982 native-born Canadians received about twice as much EI and SA benefits as immigrants, by 2007 that difference has disappeared, and in fact immigrants have surpassed native-born Canadians by a slight margin. Of course, socio-economic performance differs considerably across categories of immigrants. Economic migrants tend to integrate more successfully than family migrants, who in turn are much more successful than refugees (Yu, Ouellet and Warmington 2007).

Kilde:  Survey of Consumer Finance (1982-1998), Survey of Labour Income Dynamics (1999-2007), and authors’ calculations.

Even though the overall differences are small, many scholars worry about the trend. For one thing, the low socio-economic outcome of recent cohorts of immigrants seems particularly troublesome considering that these same cohorts also have higher education and skill levels than their predecessors (DeVoretz 1995, Omidvar and Richmond 2005, Biles, Burstein and Frideres 2008, Wong 2008). According to Dominique Fleury, today «the issue of working poverty in Canada has a very legitimate immigration dimension» (Fleury 2007, 1). For example, she shows that 21.5 percent of immigrants who came to Canada after 1990 have an income under the LICO, while that percentage is 9.5 for other Canadians (Fleury 2007, 16). It is important to note that the socio-economic performance of immigrants is worse in some provinces than in others, with the province of Quebec being one of the negative outliers. Recently, there has been a significant increase in the number of skilled migrants who rely on welfare services in Quebec, and the trends are particularly worrisome for economic migrants from Algeria, Morocco, and Romania (Pinsonneault, et al. 2010).

As discussed above, one of the reasons for this paradox of increasingly skilled and educated migrants having greater difficulties integrating into the labour force is the trouble immigrants are experiencing in having their foreign qualifications and work experience recognized by Canadian employers (Reitz 2001). In addition, professional occupations require more sophisticated comprehension of English or French than many immigrants possess. Third, some argue that discrimination on the labour market hinders the economic success of skilled migrants (Scott 2010). Finally, some point to larger trends in the labour market for explanations. Some authors have argued that while economic immigrants have become more skilled, the education levels of native-born Canadians have also increased, and that as a whole the skilled labour market has become more competitive (Picot and Sweetman 2005). More recently, analysts have shown that many of the skilled migrants who ran into socioeconomic difficulties after 2000 were intending to work in the information technology sector, which just then was experiencing a dramatic downturn (Picot and Hou 2009).

The recent changes in selection processes and criteria represent one response to these problems. How effective the response will be is uncertain (Alboim 2009). However, until the challenges facing economic integration are resolved, we can expect immigrants will need to turn more to government support than in the past. As we have seen, the trend is not dramatic. Indeed, the increase is probably lower than one might expect from the economic challenges facing immigrants. There is evidence that immigrants tend to make less use of transfers than their native-born counterparts in the same socio-economic situation, and therefore on average have lower total incomes. For example, Fleury (2007) shows that in 2004 only 16 percent of immigrants living under the LICO received SA, while that number was 33 for non-immigrant low-income Canadians.

This is not the place for a comprehensive review of scholarly explanations for the recent slowing of immigrants’ socioeconomic integration. Instead, we point to these contemporary problems merely to suggest that the Canadian model of immigration and welfare is not waterproof. The combination of a selective immigration policy, generous settlement services, and immediate access to most welfare programs have for a long time proved an effective strategy of economic integration, and indeed immigrants are still comparatively well off in Canada. Recent developments, however, suggest that the Canadian model might need to refine itself once again.

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