Saturday, 28 April 2018 16:36

Canada, India and the Opportunity for Both

Commentary by: Kasi Rao in Toronto, ON

Increasing trade and investment with India was a focal point of the discussion at this year’s Canada-India Business Council’s Annual Partnership Summit. There’s enormous room for growth, with two-way trade currently hovering around a modest $8 billion between the two countries. The purpose of the Summit is to provide an opportunity for the business community to discuss and collaborate on how to best pursue this lucrative opportunity. 

The unprecedented participation at the Mumbai and Delhi business forums during Prime Minister Trudeau’s visit in February, as well as those who were in Toronto, point to the business community’s sustained interest. Attendance and participation from various major sectors, and especially by the Canada Pension Plan Investment Board (CPPIB), Brookfield, Fairfax, Air Canada, and Bombardier Inc., was duly noticed in India. 

Additionally, the need to develop business opportunities in the context of gender-related initiatives such as those discussed at the Executive Women’s Roundtable in Mumbai, was recognized as an opportunity to pursue for Canada and India. 

There is real potential for increased growth given the statistics of the growing immigration and foreign student population in Canada. Last year alone there was a 58% increase in both study and work permits issued to Indian citizens (Statistics Canada, 2016 Census Data). The skilling needs of India and innovative research partnerships that address the development needs at all skill levels were highlighted with examples of Canadian collaboration. 

Still just a few months into the year, the Canada-India Business Council is busy working to sustain the momentum and implement actionable recommendations. Whether a start-up, boutique, or conglomerate, creating spaces where members of the business community are able to learn of new opportunities in the corridor is the abiding theme behind all of our initiatives. 

During the summit, senior executives from BMO Financial Group, Tata Consultancy Services, ICICI Bank, Air Canada, and Bombardier Inc. were panel participants, offering practical insights for all levels of enterprise. Leading Indian corporations such as TCS, and Paytm shared invaluable lessons and advice on navigating the local landscape. Representatives from Seneca College and The University of Toronto spoke of the fascinating breadth of ideas and innovation that comes through intercontinental knowledge exchange and how that exchange subsequently feeds into economic growth. Rounding out the holistic approach, the Summit also attracted interest and collaboration from various branches of the Canadian government and the Indian Consulate and High Commission. 

Increased collaboration continues to make good business sense. For Canadian companies, India is a viable growth market in a wide range of sectors. For Indian businesses, Canada is a way to continue the relationship with existing customers with access to North American markets. Both countries have long identified diversification as a tremendous facet of surviving the ever-changing economic landscape. 

One of the important developments underway in India is the emphasis on “competitive and co-operative federalism”. Panelists observed that various states in India have undertaken a number of policy reforms. As such, it was noted that businesses should target the subnational level as a viable avenue to encourage growth. This of course is consistent with Canadian federalism where a number of provinces are active in promoting their interests reflecting the diverse strengths of the Canadian economy.  

The Canadian brand is evolving and our openness to trade and investment, innovation and ideas, combined with pluralism and diversity are important to emphasize to relevant Indian audiences as we move forward. 

Canada’s strategy within the creative industry was discussed as another avenue for growth. The Jaipur Literature Festival (JLF) was highlighted as a remarkable cross-sector example of the soft power so useful in international relations. Given the Festival’s global projection, reach, and existing ties to giants in Canadian literature, exploration of collaboration here in Toronto is yet another way to bolster economic interests. 

A report will be prepared on the Summit encompassing key learnings, challenges, and next steps.

The Canada-India Business Council has and will continue to hold roundtables, and meetings across the country for business leaders, and government representatives to tackle the ‘How?’ and ‘What now?’ of opportunities from a local perspective. Host cities include Calgary, Edmonton, Montreal, Halifax, Saskatoon, and Vancouver, among others. 

The end of this year will see the Council back in India for the Mumbai Forum where the aim is to build on the sustained engagement. 

Kasi Rao is President and CEO of the Canada-India Business Council (C-IBC).

Published in Economy
Wednesday, 26 October 2016 19:08

Impatient India Riding a Treadmill: Editor

by Our National Correspondent in Ottawa

INDIA’s galloping national economy has made its people so impatient that growth under seven per cent a year could have a deeply de-stabilizing impact for the country, a well-respected Indian editor, Shekhar Gupta, told an audience of academics and South Asia watchers in Ottawa Tuesday.

Comparing such a slow-growth scenario to “falling off a treadmill,” Gupta noted that consistent progress over the last 25 years of economic reform (since 1991) has raised expectations and created high aspirations among the country’s 1.2 billion people.

“For Indians to be really happy, 8.5 to 9 per cent growth would be ideal,” he suggested.

Based on his extensive travels for a variety of news organizations, the veteran journalist said Indians are “leapfrogging” across social and wealth divides in both villages and cities.

He senses a “churn” in his country, driven by three realities – a smartphone in the hands of all Indians, widespread use of motorbikes to travel and cheap college education.

Argumentative democracy

This has resulted in social and economic mobility, but most importantly, widespread literacy programs have empowered the people to make India “an argumentative democracy”.

“Democratic politics is meant to be competitive. The voters can throw you out if you don’t perform,” he pointed out, adding that this is exactly what’s happening in most of India today.

In both states (similar to provinces in Canada) and at the federal level, leaders who deliver on economic growth have won re-election, sometimes several times over. The reverse is also true. Over the last quarter-century, politics has become “meritocratic,” accompanied by the rather unusual trend of rising voter participation – unlike most other democracies.  

Continuing his decidedly optimistic take on Indian affairs, the television host and newspaper columnist sees the media business also being a growth industry – again, unlike most other democracies. He pointed to his own start-up enterprise, The Print, as indicative of an industry that is still hiring journalists.

He repeatedly referred to a “value chain” along which Indian citizens climb the rungs, including in the area of language. Typically, in his view, it begins with a vernacular mother tongue, then learning Hindi and then eventually, English.

Modi phenomenon

Gupta was delivering the annual Dhahan lecture organized by the Canada – India Centre for Excellence at Carleton University, on the theme “India in transition”.

He generally gave high marks to Prime Minister Narendra Modi for instilling pride in Indians and his ability to impress audiences wherever he goes – both at home and abroad. “Modi has made India the most selfie crazed nation in the world.”

The Modi government suffers from "an intellectual deficit," in Gupta's opinion, but has proven good at project implementation. "It's a government in a hurry."

However, Modi has also swung India to the socio-religious right – not the economic right – and harped on nationalism. This nationalism combined with national pride could prove to be a “double-edged sword,” Gupta warned, pointing out that politics in India is not divided over economic policy differences, but rather over what it means to be a secular country.

The last 25 years has seen a move away from an almost-agnostic national ethos to a muscular nationalism that appeals to the Hindu majority population. “This will be the ideological and philosophical point of argument in the years to come,” Gupta forecast.

Dangerous cocktail

Anil Varughese, a South Asia expert at Carleton, who was among those who heard Gupta, offered this assessment: “Gupta’s lecture was a splendid testament to his wide-ranging knowledge of India and the remarkable complexity and richness of Indian democracy. In a tour de force, he captured the chief drivers of fast-paced change in contemporary India.

“His basic premise was that consistent high economic growth combined with easier access to information has spawned far-reaching transformations to India’s politics, society and culture, making its people impatient for change.

“His most valuable insight, I thought, was his remark that to understand changing India, one needs to ‘read the wall’ (the billboards). While his optimism for a more aspirational and assertive India was palpable, his caution against the dangerous cocktail of high economic growth and brazen peddling of nationalistic pride was prescient.”

Published in Top Stories

by Deanna Cheng in Vancouver

During the 2015 election campaign, one issue remained imminent for many Canadians: how will the newly elected government improve the economy? But, a question less pondered, of interest to many immigrant communities is how will the government improve economic inequalities.

One economics professor from British Columbia’s Simon Fraser University recently pointed out which promises made by the major political parties in Canada made would lower inequality.

“Inequality is more about wealth than income,” professor Krishna Pendakur said during a public lecture in Burnaby earlier this month.

Wealth, he said, is money generated from stocks, bonds, etc., and income is based on labour.

Economic platforms

Pendakur said the Conservatives’ plan is vague when it comes to economic inequality  – more commonly referred to as the gap between the rich and the poor.

“They promise to grow the economy, to have a bigger pie, then a trickle-down effect,” he explained. “Whatever crumbles from this pie and falls down to the rest of the 99 per cent, that’s it.”

[quote align="center" color="#999999"]Pendakur said the Conservatives’ plan is vague when it comes to economic inequality.[/quote]

Pendakur noted though that some trickle-down effect did happen with previous policies of low tax rates, low revenue and low public spending. “There was high skilled blue-collared incomes in Alberta while the party lasted.”

Looking to the Liberals and New Democrats, Pendakur said both parties promise to increase guaranteed income supplement, which is a good thing. The income supplement provides a monthly non-taxable benefit to Old Age Security recipients who have a low income and are living in Canada.

To get the supplement, the recipients must be legal residents in Canada and receiving the old age pension.

Addressing national inequality

Pendakur pointed out which policies each party promised would likely be most effective in addressing national inequality.

For the New Democratic Party (NDP), he said the two major ones are national subsidized childcare and national universal drug coverage. “Both are long term commitments and [Tom] Mulcair will need more than one election to see it through,” he commented.

[quote align="center" color="#999999"]"[F]or some, even if they’ve seen a doctor and the doctor has written the prescription, sometimes people can’t afford the treatment at the pharmacy. It’s the biggest cost to someone’s health.”[/quote]

Pendakur said political parties are careful about what they can claim because there are certain jurisdictions which federal governments don’t have a lot of control over.

Health care is decided at the provincial level, so that is why the NDP chose pharmaceuticals, he said.

“It’s good because, for some, even if they’ve seen a doctor and the doctor has written the prescription, sometimes people can’t afford the treatment at the pharmacy. It’s the biggest cost to someone’s health.”

Minimal wage is also a provincial jurisdiction, Pendakur explained, which is why the NDP promised a minimum wage of $15 per hour for federal workers. “100,000 workers will be affected.”

Turning to the Liberals, he drew attention to the party’s promise to increase child benefits with lower implicit tax rates on them.

The party also said it would raise tax rates on personal income over $200,000 by four per cent and lower income tax rates for the middle class from 22 per cent to 20.5 per cent.

Privileging particular demographics

During the Q-and-A session, an audience member asked Pendakur what he thought about the Conservative party’s income-splitting tax plan.

“Income splitting is awful,” Pendakur replied.

[quote align="center" color="#999999"][Pendakur] said [income splitting] values two-parent, two-income families and ignores every other demographic in the country.[/quote]

He said the plan values two-parent, two-income families and ignores every other demographic in the country. “Why is this particular demographic worth more than others?”

University of Fraser Valley student Anoop Tatlay agreed with him.

“I couldn’t pinpoint what it was about the [income-splitting tax] proposal that bothered me, but once he said it, it clicked,” stated Tatlay, who is a single mother. “I’d thought the same thing.”

Pendakur presented complex information in an engaging manner, said Tatlay. The newfound knowledge she gained motivated her to look more closely at the federal budget and public spending and try to understand it better.

As a Canadian citizen, the 37-year-old resident of Mission, B.C. said she plans to vote on Oct. 19.

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Published in Economy
Wednesday, 22 July 2015 19:24

Immigrants Excluded from “Middle Class”

by Anita Singh (@tjsgroupca) in Toronto, Ontario

As we trudge along towards an expected fall election, the race is on to gain votes from the “middle class”.  

In the midst of an economic downturn, both the New Democratic Party (NDP) and Liberals have made strong assertions about how they will fight for the middle class if elected to office in Ottawa. On the one hand, Justin Trudeau waxes poetic about saving the middle class from taxes and providing more money through the Child Tax Benefit. On the other, Tom Mulcair invokes his personal experience to champion the middle class, bruised from the brutality of ‘the rich' to lead Canada back to a country governed by ‘middle class values’. 

Both parties have tapped into a significant narrative that underpins the importance of class in this election. This election will largely be about economics, both individual and systemic. But the emphasis on the “middle class” does not show how these classifications address the unique challenges facing new immigrants to this country.  

What is the Middle Class?

Defining the middle class is a difficult, if not impossible, endeavour. An investigative piece in Maclean’s last year, suggests that by even the most inclusive measurements, only 30 to 40 per cent of Canadians are defined as middle class. 

For example, economist Lester Thurow’s defines this group as those earning between 75 and 125 per cent of the median income, which would only include 30 per cent of all Canadians (those earning between $35,000 and $70,000 a year).  Some have suggested that the middle class should be a proportional group, consisting of 60 per cent of the middle of Canadians, while others have suggested that middle class should be defined by the amount of disposable income a person has.  

Regardless of the approach, the parties have tapped into a winning strategy – studies have showed that despite their actual income, close to 80 per cent of Canadians self-identify as middle-class.   

[quote align="center" color="#999999"][T]he parties have tapped into a winning strategy – studies have showed that despite their actual income, close to 80 per cent of Canadians self-identify as middle-class.[/quote]

And this self-identification benefits the parties immensely.

Where do immigrants fit?

According to the 2011 National Household Survey, the median income for all working Canadians was $29,878.  The table below shows the inter-generational immigration effect on median incomes, notably for those from the second generation. The data matches the anecdotal suggestion that second generation immigrants who witness the struggles of their parents are more likely to be successful economically than future generations.


* Data from the 2011 National Household Survey

For first-generation immigrant groups, the data shows that the timing of an immigrant’s arrival in Canada has a noticeable impact on their income.  Newer immigrants are doing significantly worse than their Canadian-born counterparts.  As the table below shows, the most recent arrivals to Canada, those arriving between 2006 and 2009, earn $10,000 less than the Canadian median. 

* Data from the 2011 National Household Survey

As these numbers show, there are a large number of immigrants who will not benefit from the proposed Liberal and NDP policies, simply because they do not actually qualify as ‘middle class.’

What does this mean for ‘middle class’ politics?

The statistics suggest that the NDP and Liberal approach to tax cuts and child benefits may have some impact on improving Canadian lives, but they have yet to actually address the more dire needs of recently-immigrated Canadians.  

Not a single policy from either party has made recommendations focused on the specific economic situation facing newly-arrived immigrants.  Yet, there are numerous policy options that could be addressed by these parties. 

To the NDP's credit, a federal minimum wage set at $15 dollars would vastly benefit those earning in the lowest income brackets, including immigrant populations largely dependent on unskilled labour in construction, fast-food, cleaning, and low-level agricultural jobs. With a full-time job at $15 an hour, an individual will earn $29,125, coming close to matching the average income of Canadians ($29,878).

[quote align="center" color="#999999"]Not a single policy from either party has made recommendations focused on the specific economic situation facing newly-arrived immigrants.[/quote]

Training and skills development programs are required that include lessons on integration in the Canadian workplace, to help individuals integrate faster into the workplace.  Opportunities for small business development could also be addressed through these programs.

Additionally, there is a significant need for affordable housing options with the requisite infrastructure for new immigrants to build lives in Canada.  Currently, low-income immigrant communities are sequestered to corners of metropolitan centres, dependent on inadequate public transportation, overfilled schools and inadequate healthcare. 

These are just a few solutions that this election continues to ignore.

A middle-class focus could be the future, if that future includes all Canadians. 

Anita Singh is a founding partner of Tahlan, Jorden & Singh Consulting Group and a Research Fellow at the Centre for Foreign Policy Studies at Dalhousie University. Her research examines the role of diaspora groups and their influence on foreign policy, particularly the Indo-Canadian community and Canada-India relations.

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Published in Commentary

The Express Entry immigration selection process places a high value on job offers. Expert Mikal Skuterud warns of risks associated with this that Citizenship and Immigration Canada must monitor closely.

Photo Credit: Y-Axis CC 


by Mikal Skuterud (@mikalskuterud) in Waterloo, Ontario

The job of an academic is to be critical of government policy, not praise it, but in the case of Citizenship and Immigration Canada’s (CIC) new Express Entry (EE) system, there is much to like.

What I like best about the EE system is that it makes the objective of economic immigration explicit. The points in the Comprehensive Ranking System (CRS) used to select applicants in the EE pool are based (perhaps too loosely … but more on that below) on a statistical analysis of the factors that best predict post-migration labour market earnings.

For an economist, earnings first and foremost reflect worker productivity and the human capital that gives rise to that productivity. If the objective of economic immigration is to raise average productivity, and in turn average Canadian living standards, then selection policy should first and foremost target migrants whose expected earnings are above the current Canadian average.

"Cream skimming"? Perhaps.

One can, of course, argue that this economic focus is too narrow, but that’s why we have other immigration programs. I’m entirely sympathetic to the view that allocating 10 per cent of permanent residency (PR) slots to humanitarian immigration is not enough, but that’s a much bigger issue, and not a criticism of the EE system.

[quote align="center" color="#999999"][A]ssuming that an open-door immigration policy is politically infeasible, and that the number of prospective immigrants exceeds available slots, the government must somehow discriminate between applicants. But how?[/quote]

I have also heard EE criticized on the grounds that it’s “cream skimming,” catering exclusively to those with high economic value to Canada.

The challenge is, assuming that an open-door immigration policy is politically infeasible, and that the number of prospective immigrants exceeds available slots, the government must somehow discriminate between applicants. But how?

For economists, the most efficient way to allocate scarce resources is through prices. But, selling PR slots to the highest bidders is a bad idea for all kinds of reasons, not the least because worker productivity is imperfectly correlated with wealth.

An alternative approach is to do what universities do in selecting students: set an eligibility rule for application – a high school diploma, for example – and use a set of criteria to select among applicants. This is precisely what the EE system does.

The Federal Skilled Worker and Trades Programs and Canadian Experience Class define eligibility and the CRS points provide a mechanism to select individuals from the pool of applicants. Is this “cream skimming”? Perhaps. But what’s the alternative?

We could let eligible candidates wait in a queue for an indefinite duration until their turn comes up, as we used to do. But wouldn’t most applicants prefer a transparent system that allows them to improve their application in order to rise to the top? Would we prefer if universities admitted students in the order that their application was received?

Room for improvement

Although there is much to like about EE, there are two features of the current CRS that concern me.

First, predicting the Canadian earnings of prospective immigrants is difficult.

A presentation at this year’s Metropolis Conference showed that, at best, the CRS predicts 10 per cent of all the variation in immigrants’ earnings 10 years after their arrival in Canada. Meaning, the order in which individuals are ranked in the EE pool looks very different from how they would be ranked if we knew what their actual earnings were 10 years after landing in Canada.

Of course, one can argue that selecting individuals on objective criteria, even if they are weak predictors of future success, is better than selecting randomly, but why not improve the CRS system by using better predictors?

For example, economists know that the best predictor of future earnings is past earnings. Why not exploit information on pre-migration earnings, by having applicants submit a recent income tax return from their origin country? Here is where engaging the research community could prove valuable for CIC, but doing so would also require making its Immigration Database (IMDB) accessible through Canada’s Research Data Centres.

Second, as my PhD supervisor once told me, if you’re going to let the data do the talking, you must tie your hands and not overlook inconvenient results.

The current CRS gives employers a central role in immigrant selection by putting a high value on job offers. In fact, a job offer (or Provincial Nominee Program recommendation) trumps any combination of human capital characteristics (except a perfect score).

[quote align="center" color="#999999"]Although six of the first eleven rounds of EE invitations included applicants who did not have a job offer (or PNP recommendation), the minimum score cutoff to date is 453 (as seen in above graph). Note: a young newly minted PhD with impeccable English fluency wouldn’t reach this cutoff without at least some work experience.[/quote]

Is this justified in terms of the ability of job offers to predict future earnings? The evidence suggests not. In a recent study published in Canadian Public Policy, economists Arthur Sweetman (McMaster University) and Casey Warman (Dalhousie University) find that, on average, skilled immigrants who have Canadian work experience prior to landing earn significantly more one year after landing, than those who don’t. However, this advantage falls by roughly one-half only three years later.

But perhaps job offers have little impact on who is ultimately selected, despite the extra points they provide? Again, the answer seems to be no. 

Although six of the first eleven rounds of EE invitations included applicants who did not have a job offer (or PNP recommendation), the minimum score cutoff to date is 453 (as seen in above graph). Note: a young newly minted PhD with impeccable English fluency wouldn’t reach this cutoff without at least some work experience. This suggests that the vast majority of successful applicants to date have had a job offer or PNP recommendation (unfortunately, CIC doesn’t publish this information). 

Work ahead for CIC

Are there risks in putting such a high value on job offers? The most concerning is that it creates incentives for corruption. An important task for CIC as the program is unrolled will be to monitor job tenure durations of folks who would not have cleared the CRS hurdle without an employment offer. There are, however, more subtle unintended consequences that CIC should be monitoring.

[quote align="center" color="#999999"]The reality for many immigrants is that clearing the CRS hurdle is impossible without a job offer.[/quote]

First, the skills needs of the modern economy are more dynamic than ever. Skills that are in high demand today may be obsolete tomorrow. The large inflow of information and communications technology workers in the late 1990s and their subsequent labour market challenges following the Dot-Com crash of the early 2000s, provides an important lesson on the risks of putting too much emphasis on current labour market needs.

Second, with the increased cost of a Labour Market Impact Assessment – a tool used by employers to demonstrate the need to hire a foreign worker to fill a particular position – there is concern about the ability of foreigners, in particular international students, to compete for jobs.

This, however, assumes that employers must pay the LMIA cost. The reality for many immigrants is that clearing the CRS hurdle is impossible without a job offer. This can put a high value on a LMIA for prospective immigrants, far in excess of the $1000 processing fee that employers pay.

An important question for CIC is to what extent this value leads prospective immigrants to accept wage offers that they would otherwise not. Once again, closely monitoring the wage rates of not only immigrants who have cleared the CRS hurdle because of a job offer, but also the wages of Canadians who are competing with the same immigrants for jobs, will be important as CIC continues to phase in the new EE system.

Mikal Skuterud is an Associate Professor in the Department of Economics at the University of Waterloo and is affiliated with the Canadian Labour Market and Skills Researcher Network (CLSRN) and CERIS - The Ontario Metropolis Centre. He received his Master's degree in Economics from the University of British Columbia and his Ph.D. in Economics from McMaster University. His research interests include: the labour market integration of immigrants and labour market policies that influence hours of work; and the labour supply adjustment behaviour of new parents. His work has appeared in the American Economic Review, the European Economic Review, the Canadian Journal of Economics, and the Journal of Labor Economics. His research has received national media coverage in the New York Times and the Globe and Mail

{module NCM Blurb}

Published in Commentary
Sunday, 14 December 2014 22:05

Are Immigrants Happy? It Depends ...

by Our Special Correspondent (@NewCdnMedia

Immigrants to this country are generally happier than the folks they left behind in their ancestral nations, but most diaspora communities report they are less satisfied with life here than their Canadian-born peers, according to a study just released by Statistics Canada.

The study found that newcomers from Colombia are the only group less happy than the population of their home country, while those from the Netherlands and New Zealand show little improvement. Another set of outliers are immigrant communities from Nigeria, Italy and Mexico, who unlike other immigrant groups are, in fact, happier than the Canadian-born.

Not to be confused with the Bhutan-inspired Gross National Happiness or the Happy Planet Index, this latest study is the first anywhere in the world that tracks happiness – or “life satisfaction” as the researchers prefer to call it – as immigrants move from one set of socio-economic conditions to the Canadian reality. (Happiness could be viewed as more transient and fleeting.) While there are any number of studies of immigration from an economic standpoint, this one looks at the movement of people as a quality-of-life choice: one at least partly motivated by the pursuit of happiness.

Life satisfaction among recent immigrants in Canada: Comparisons with source-country populations and the Canadian-born” uses data collected by previous surveys in Canada and 43 other countries that have large diaspora communities in Canada (“source countries”).

The surveys asked all Canadian respondents, both newcomers and native-born, the same question: Using a scale of 1 to 10 where 1 means “Very dissatisfied” and 10 means “Very satisfied,” how do you feel about your life as a whole right now? Overseas, the question varied slightly: All things considered, how satisfied are you with your life as a whole these days?

The results, therefore, are based on individual perceptions or “self-reporting,” rather than any kind of objective measure. Those who responded to the surveys were not making comparisons themselves.

The study, conducted by three researchers at Statscan, Kristyn Frank, Feng Hou and Grant Schellenberg, covered immigrants who have been in Canada for less than 10 years. However, the team also analyzed data sets for those who have been in Canada for less than 20 years and found their results remained more or less consistent.

Comparison with source nations

The team of Statscan researchers found that except for newcomers from three nations – Colombia, the Netherlands and New Zealand (all fairly small contributors to Canada’s immigrant population) – had happiness scores that were lower than citizens of the countries they left behind.

Here is a summary:

Immigrants from Colombia had life satisfaction levels that were significantly lower than their source-country population (0.46 points lower). Immigrants from the Netherlands and New Zealand also had lower life satisfaction levels than their source country populations, but these differences were not statistically significant.

Immigrant groups with life satisfaction scores similar to their source-country populations were Australia (no difference), Mexico (difference of 0.05 points), Brazil (difference of 0.22 points), United Kingdom (difference of 0.4 points), and China (difference of 0.45 points). Two other major contributors of immigrants were also in this moderately-happier range: India (1.73) and the Philippines (1.01).

Immigrant satisfaction levels well above home nations: The following immigrant groups had the largest life satisfaction differences when compared to their source-country populations: Pakistan (2.61 points higher), Ukraine (2.64 points higher), Iraq (2.65 points higher), and Zimbabwe (3.53 points higher). All of these results were statistically significant differences.

Accounting for differences

Given that there are vast differences between Canada and some of the nations being compared, the researchers factor in economic development (using GDP data from the World Bank) and the prevalence of civil liberties (tracked by Freedom House) before arriving at the final scores. In e-mailed comments to New Canadian Media, Dr. Frank, a senior research analyst, said raw scores are “adjusted” using a statistical method called regression analysis.

Interestingly, economic differences far outweighed the influence of civil liberties (freedom of expression, assembly, association, education and religion) in determining the final happiness score.

“The regression results indicate that when we control for both source-country GDP and civil liberty, only the effect of source-country GDP is statistically significant. This indicates that immigrants who come to Canada from nations with lower GDP per capita [poorer nations] generally have larger improvements in their life satisfaction compared to their source-country population. 

“In a separate model, we also found that about one quarter of the variation in life satisfaction across source countries was accounted for by GDP per capita. These results again indicate that immigrants from countries with lower levels of GDP experience greater improvements in their life satisfaction,” Frank said in exclusive comments. For example, for India, the difference in “life satisfaction” between the resident population and immigrants in Canada went down from 2.04 to 1.73 points when the difference in GDP was taken into account.

Further, the researchers were able to show that the ‘happiness gaps’ remain even though immigrants may not be representative of the general population in the countries they come from, given that they tend to be drawn from the middle and upper classes. The survey data in Canada covered those immigrants who continue to stay in Canada: only the relatively successful persevere in Canada. A separate Statscan study released in 2006 reported the phenomenon of “out migration.” It found that as many as 35 per cent of male immigrants (mainly principal applicants) who have been in Canada for under 20 years return to their home countries, with the bulk of them returning in the first year after arrival. This return to their homelands is most acute in times of economic recession, when the researchers found the exit rate could reach as much as 50 per cent, as in the early 1990s.

Comparing immigrants and natives

The differences between newcomers and their native-born citizens are less dramatic, but the Statscan study found that 27 immigrant groups reported levels of satisfaction that were lower than their Canadian-born citizens. Here is a summary of the findings:

Immigrant groups with significantly lower life satisfaction levels than the Canadian-born population: Bangladesh (0.66 points lower), China (0.53 points lower), Iran (0.7 points lower) and Bulgaria (0.6 points lower).

Other than China, the other major contributing nations showed differences that were slightly higher: Pakistan (- 0.14) and India (- 0.10).

Immigrant groups with satisfaction levels closest to the Canadian-born population: The groups with the smallest difference were the United Kingdom (no difference), Germany (difference of 0.02 points), United States (difference of 0.05 points), Poland (difference of 0.06 points) and Romania (difference of 0.06 points).

Three immigrant groups had life satisfaction levels that were significantly higher than the Canadian-born population: Nigeria (0.67 points higher), Italy (0.58 points higher) and Mexico (0.36 points higher). Filipino immigrants were happier by 0.17 points.

“Overall, when we compared immigrants as a single group, we found that they had lower levels of satisfaction than the Canadian-born population.  However, the difference is small (0.12 points lower than the Canadian-born) compared to life satisfaction differences between various immigrant groups and their source countries.

“When we separated immigrants by country of origin, we found that many groups did not differ significantly from the Canadian-born population. We concluded that the lower life satisfaction observed for immigrants overall may be influenced by certain immigrant groups with particularly low life satisfaction. Therefore, when examining immigrants’ satisfaction in Canada, the variation between different immigrant groups in life satisfaction should be considered,” senior analyst Frank said in her interpretation of the data. 

Explaining the differences

Citing previously published research, the Statscan group noted that the lower scores for most immigrant groups when compared to native Canadians may result from factors such as the kind of reception they receive on arrival, separation from extended families, experience of discrimination, regional factors (high rate of unemployment or the proportion of immigrants), or even a “perceived drop in status due to a shift in their reference group.”

The reasons for migration are also a huge factor, the researchers point out. For instance, immigrants from Hong Kong who arrived in Canada for economic reasons reported that they were less happy than those who migrated for social, political or educational reasons.  

Summarizing their findings, Frank, Hou and Schellenberg write in their paper, “These patterns are consistent with the view that national contexts influence life satisfaction and that the common experience of life in Canada is associated with a narrowing range of scores across immigrant groups.” Their study shows that the gap narrows for immigrants who have been in Canada for up to 20 years, but that’s as far as they go with the data available.

Happiness further down the road remains moot and perhaps the topic of a longer-term study to determine if the ‘happiness gap’ between immigrant and native-born disappear over time.

Publisher’s note: We have made every effort to present the findings accurately and relied on interpretations provided by Statscan in our reporting. For details on methodology and data collection please consult the original paper available on the Statscan website. The graphs were provided by Statscan.

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