Professional Documents
Culture Documents
11/27/2017
The immigration systems of Australia and Canada are some of the most fascinating in the
world. Both systems have been lauded by prominent immigration skeptics, pointing out their
“merit-based” method for letting in immigrants through an elaborate point system (Porter, 2017;
Doherty, 2017). However, both systems have also been praised by pro-immigration groups
across the world, in particular the large number of immigrants both systems let in, as well as the
special exceptions made for humanitarian aid (Enhance Immigration, 2016; Anderson, 2017).
While both sides’ claims are technically true, as both countries’ systems do have programs that
prioritize migrants’ “merit” while also having extensive humanitarian exceptions and allowing in
large amounts of immigrants, the two systems are much more complicated. Neither immigration
system can be simply characterized, and as will be discussed, neither system’s effect on their
respective economies can be simply characterized, either. This paper will aim to explore the
amount of immigrants let in by each country’s unique immigration system, and how that level of
immigration has affected each country’s labor market, fiscal programs, human capital, and the
economic well-being of the immigrant communities. The paper will ultimately show that while
the high levels of immigration in both countries have had some minor downsides, the negatives
Before the economic effects of each system can be discussed, how each immigration
system currently operates must be established first. Australia accepts migrants in through two
programs: The Migration Programme and the Humanitarian Programme. The latter is focused on
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helping refugees and displaced individuals; since 1990, the Humanitarian Programme has let in
between 10-20 thousand migrants in each year, though over the last ten years the program has
always taken in at least 13,000 (Phillips & Simon-Davies, 2017). The Migration Programme, in
contrast, lets in migrants for economic purposes based on a “points system;” though the exact
composition for the points system has gone through multiple versions since being formalized in
1989, the main concept is that, to be admitted in, skilled workers must meet a minimum number
of “points” awarded for factors such as age, education, working experience, health, and personal
character (Donald, 2016). Skilled workers coming to Australia must apply to work in a specific
occupation from a list put out by the Australian government called the Strategic Skills List; this
is designed to have migrants fill sectors of the labor market that the government determines
needs more workers (Australian Visa Bureau, 2017). Migrants sponsored by employers do not
have to meet a points requirement (Donald, 2016). Through the Migration Programme, the
Australian government also offers partner visas for skilled workers and other Australians to bring
over family members (Department of Immigration and Border Protection, “Fact Sheet: 2017-
2018 Migration Programme Planning Levels”). The Australian government sets a goal for how
many migrants to let in via the Migration Programme each year; throughout the 1990s they
usually let in about 60-90 thousand migrants annually, however, they let in 100-170 thousand
annually throughout the early 2000s, and have let in 190,000 migrants each year for the past 5
economic migrants, resettling refugees, and a third category for sponsored family (Australia
combines sponsored family and economic migrants together in their Migration Programme)
(Government of Canada, 2017). This division of categories was established with the Immigration
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Act of 1976, and the categories have remained the same since then (Knowles, 2007, p. 209).
However, while the economic migrants have always been measured on a points-based system,
2001’s Immigration and Refugee Protection Act significantly changed how points would be
given out. Where before Canada’s economic program was designed to find migrants that could
fill specific shortages in their labor market, 2001’s revision instead has migrants evaluated based
on more general human capital attributes that can be applied flexibly; the current system grants
the most points for language proficiency and formal education (Knowles, 2007, p. 259). The
think-tank CentreForum assessed that Canada’s immigration system values more “broadly
Australia’s (Murray, 2011). From 2006-2015, Canada let in 250,000-280,000 migrants in a year
(Citizenship and Immigration Canada, 2017); from each category, they averaged 60.7% from
their economic program, 27.5% from their sponsored family program, and 10.2% from their
refugee program, as shown in Table 1 (all tables are located in the “Tables” section after the
main text of the paper). In comparison, separating the worker migrants from the sponsored
family in Australia’s Migrant Programme over the same period of time, as shown in Table 2,
Australia averaged 62.3% from their economic program, 30.0% from their sponsored family
program, and 7.7% from their humanitarian program, showing that Australia has been taking in a
A major concern with any immigration program is how it will impact the labor market for
native workers. Australia and Canada’s populations are currently 28.2% and 21.8% foreign-born,
respectively, and as shown in Table 3, that percentage has been steadily increasing for both
countries since 1990 (United Nations, Department of Economic and Social Affairs, 2015). Both
have some of the highest rates of foreign-born populations among major developed countries
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(United Nations, Department of Economic and Social Affairs, 2015); as such, it would stand to
reason that if any countries would have their labor markets shaken up by immigration, it would
be Australia or Canada.
Looking at the overall data for both countries, immigration does not appear to have had a
simple effect on either country’s labor market. In 2009, Australian economist Temesgen Kifle
calculated that weekly native-born earnings in Australia would increase 1.5% for every 1%
increase in the size of the skill group (Kifle, 2009). A different study from Monash University
concluded that for every 10% increase in Australian immigration, there will be a corresponding
1.21% increase in “the log of native wages” (Parasnis, Fausten, & Smyth, 2006). A more recent
study from 2015, published by the Australian Government, found that from 2001-2012 there was
“no evidence” that native Australians labor prospects were impacted by higher immigration
(Breunig, Deutscher, & To, 2015). However, the same report makes a disclaimer that they were
estimating over a period of “robust economic growth,” and that there may be more negative
effects during periods of slow or negative economic growth. Australia has gone the past 26 years
without a recession, with some politicians and economists even arguing that high immigration is
responsible for Australia’s “economic miracle” (Babones, 2016). However, with the OECD
stating that “unprecedented” highs in Australia’s housing prices could lead to an economic
downturn soon, one may be able to figure out the impact of immigration on a weakened
Australian economy in the near future (OECD, OECD Economic Surveys: Australia). While real
wage growth has slowed dramatically in Australia over the past five years, just as the country
began taking in even more immigrants, there has not been any concrete evidence that
immigration is to blame for slowing wages yet (Bishop & Cassidy, 2017). As such, it can be
concluded that the increase in immigration in Australia has had either negligible or positive
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effects on natives’ wages, though it is possible that that could change if Australia experiences a
In Canada, real wage growth increased steadily in the 1990s, and had larger increases in
the 2000s, just as immigration was also expanding (Morissette, Picot, & Lu, 2012). Though
direct studies on how immigration has affected the Canadian labor market are limited, economist
Jiong Tu released a paper analyzing the impact of immigration on the labor market in the 1990s.
Tu found that increased immigration inflows “did not adversely affect native wage growth rates”
in the 1990s (Tu, 2010). More recent analyses have found that increasing immigration would not
have any substantial impact on wages or employment of native Canadians, but argue that more
research specific to Canada is needed (Riddell, Worswick, & Green, 2016). However, because
the immigrants to Canada tend to be “disproportionately high-skill,” it was found that the
increase in migration throughout the 1990s narrowed wage inequality slightly within Canada
(Aydemir & Borjas, 2006). As such, on a macro-level, the existing research suggests that recent
immigration increases may have led to some minor gains in wages for Australian natives, while
also contributing to a narrowing of wage inequality in Canada, but overall have had no
However, while on a whole immigration may have had only positive or negligible effects
on the Australian and Canadian labor markets, that does not mean that there have not been some
seventeen-year high; this comes at the same time as a program that annually allows for 250,000
“working holidaymakers” to have a two-year stay, often doing work such as fruit-picking and
daycare that would typically be filled by younger Australians, possibly taking away jobs from
the native youth (Batchelor, 2015). Combined with an over 10% increase over the past ten years
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of 60-64-year-olds staying in the workforce, there is legitimate concern that the level or type of
migrants let in should be reconsidered to give younger native Australians a chance to enter the
workforce (Birrell & Healy, 2013). While an aforementioned study by Temesgen Kifle found
Australian wages would go up with immigration on a whole, the study found that for low skill
occupations, wages would decrease almost 1% for every 1% increase in the skill group. While
there have been some well-reported incidents of native-born Canadians losing jobs to immigrants
in low-skill sectors such as waitressing (Leo, 2014), there is significantly less concern in Canada
about immigrants taking away jobs from younger workers. This can likely be attributed to
Canada’s youth unemployment being below its 40-year average (Taylor, 2015). Though research
on immigration’s impact on Canadian labor is lacking, as stated before, what does exist does not
suggest any impact on native wages or employment. As Australia also brings in workers to fill in
specific sectors of the labor market, it is possible that their occupation list for immigrants has
crossover with occupations younger people might wish to go in to; with Canada prioritizing
education, it would be less likely that their immigrants would have significant crossover with
younger or low-skilled workers. As a whole, immigrants taking jobs from younger and low-
Another issue surrounding immigration is the fiscal impact, the question as to how much
taxes the immigrants will put into the government system, and how much social benefits they
will take out. In Australia, the best research in to the fiscal impact of immigrants is The Fiscal
Impact Model, which the Australian Department of Immigration and Citizenship composed to
predict the effect of new migrants by category on the Australian Government (OECD, The Fiscal
Impact of Immigration in OECD Countries). As shown in Table 4, family and labor migrants
will immediately have a positive fiscal contribution to Australia; while family-sourced migrants’
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fiscal contributions will diminish over 20 years, worker migrants’ fiscal contributions will go up
the longer they stay. Though humanitarian migrants are predicted to spend the majority of their
time in Australia with a negative fiscal contribution, after 20 years their contributions will be
positive. Though this would not be enough to make up for their initial negative fiscal impact, it
does show fiscal benefits to keeping humanitarian immigrants in the country for longer periods
of time as opposed to trying to relocate them. The family-sourced and worker immigrants,
however, would be making a positive fiscal contribution from day one. This positive fiscal
impact is due to the fact that permanent immigrants as a whole pay approximately the same
median income tax as native-born residents at $4,500 (skilled worker migrants on average pay a
higher income tax, while humanitarian and family-sourced migrants pay lower tax) (Australian
Government Productivity Commission, 2016). Immigrant households also spend similar amounts
to the native-born in weekly expenditures ($1,225 vs $1,242), suggesting similar amounts paid in
indirect taxes such as the sales tax (Australian Government Productivity Commission, 2016).
Immigrant households spend higher amounts on housing compared to the native-born, suggesting
that immigrants may even contribute more in property taxes (Australian Government
Productivity Commission, 2016). However, because many social benefits, such as social
security, are not applied to worker and family-sourced migrants until after a two-year waiting
period, Australian immigrants take less out from the Australian government than their native-
5, permanent immigrants as a whole receive income support at a lower rate than the general
population. As such, because Australian immigrants pay similar amounts in taxes but take in less
Though there has not been a similarly constructed “Canadian Fiscal Impact Model”
predicting the fiscal impact of Canadian immigrants, there has been research into the fiscal
impact of older immigrants, especially in comparison with native Canadians. Table 6 shows that
Canadian immigrants paid slightly less in taxes than those Canadian-born, though Table 7 shows
that Canadian immigrants also received slightly less in direct government benefits (not including
public goods) than those Canadian-born. Research on this data concluded that, depending on
what one sets immigrants’ contributions to and consumption of public goods to be (which there
is a lack of concrete data on), there has been a “fiscal transfer” of either $1,414 from native
Canadians to immigrants or $397 from immigrants to native Canadians (Javdani & Pendakur,
2013). Ultimately, it is unclear if Canadian immigrants have received more benefits than they put
back in, but if so it is likely a negligible amount. It also must be stated again that this study only
covered immigrants from 1970-2004; with Canada changing their immigration system with
2001’s Immigration and Refugee Protection Act to put more value on immigrants’ education
over their ability to work in a certain labor sector, it is possible that an updated version of this
study would find newer immigrants having a different level of fiscal impact. Unfortunately, such
a study has not appeared to have been conducted yet. At the moment, while it is clear the
Australian immigrants have had and are expected to have a positive fiscal impact on their
country, it is still unclear what the fiscal impact of Canadian immigrants, especially more recent
The influx of immigrants has also impacted the human capital levels of both countries.
Considering both Australia and Canada have “merit-based” education systems, it would stand to
reason that their foreign-born population should contribute to the buildup of human capital. As
ISCED 5/6. These levels are used by the International Standard Classification of Education to
mark basic tertiary education (UNESCO Institute for Statistics, 2012). Only 24.68% of native-
born Australians have tertiary education, over a 5% difference, suggesting that Australia’s
immigration program is bringing about an increase in the country’s human capital. Looking at
Table 8 again, similar results can be seen in Canada, where foreign-born Canadians have a rate
of tertiary education over 8% higher. Also, in 2013, Canada’s statistics agency found that
immigrants hold over half (50.9%) of the country’s STEM (science, technology, engineering,
and mathematics) degrees (CICS Immigration Team, 2013). With both countries’ immigration
programs being considered “merit-based,” in that they are designed to bring in more qualified
immigrants, it would appear that both countries’ programs have been successful at building up
each of their respective human capital. While the immigrants brought into Canada have a higher
this is consistent with Canada’s immigration program, as previously described, being structured
to focus more on educational attainment over the ability to fit in with a specific sector of the
labor market.
However, while immigrants in both Australia and Canada may have highly developed
human capital, that does not necessarily explain how those immigrants have assimilated and fit
in to their countries’ labor markets. In Australia, it has been found that there is definitely a wage
gap between immigrants and the native-born, though that comes with some caveats (Salehin &
Breunig, 2012). Immigrant men were found to have earned 18% less than similar native-born
Australians within their first year in Salehin and Breunig’s study, with wage assimilation not
occurring until 20 years after arrival. However, they find that immigrant women do not face any
English-speaking backgrounds were found to have assimilated significantly faster than those
backgrounds. Salehin and Breunig also found that immigrant men who arrived before 1976
earned 64% less than similar native-born Australians, and immigrant women who arrived before
1976 earned 71% less than similar native-born Australians; however, for more recently arrived
immigrants, this wage gap is “much smaller” (the paper did not provide an exact percentage for
this statistic). Salehin and Breunig find this consistent with the Australian immigration system
being “more geared towards skilled immigrants” in more recent years, suggesting that this wage
In Canada, though there is definitely a wage gap between immigrants and native-born
Canadians, there too it comes with some caveats (Morissette & Sultan, 2013). Observing a study
from René Morissette and Rizwan Sultan of Canada’s Statistics agency, they found that as of
2010 immigrant men earn 86% of what native-born Canadians make, which is an increase
compared to 76% in 1991. For immigrant women, the wage gap narrowed even greater, from
78% in 1991 to 93% in 2010. However, this has not been a uniform increase; Morissette and
Sultan found that immigrant men’s wages actually reached 91% of native workers’ around 2003,
and dropped steadily throughout the rest of the decade. Immigrant women’s wages reached 96%
of native workers’ wages in 2006, then experienced a similar decline throughout the decade.
Though this data is not as current as what would be preferred, as it stops at 2010, this is the most
recent credible study on the wage gap that could be found. An updated study would show
whether or not the wage gap continued to widen or if it began narrowing again, especially as
more human capital-focused immigrants from the 2001 policy shift began entering Canada. The
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study does not examine whether foreign-born Canadians will reach wage parity with native-born
Canadians after a certain number of years, and no distinction was made between those from
English or non-English speaking backgrounds. These factors make it difficult to compare the
wage gaps between Australia and Canada directly; however, both countries noticeably have
higher wage gaps for immigrant men than women, and with the exception of a slight decline in
the latter half of the 2000s decade for Canada, both countries’ immigrant wage gaps have
having higher levels of education than the native-born, it would stand to reason that this wage
gap would only further narrow provided the economies of both countries remain steady.
Though both Australia and Canada have remarkably similar immigration policies, both
countries have begun to reassess those policies, in different ways. Australia recently decided to
reduce the number of temporary work visas it would issue, with Prime Minister Malcolm
Turnbull stating as his reason that “Australian workers must have priority for Australian jobs;”
while analysts predict that this will have little impact on Australia’s overall immigration levels, it
does signal that the country is beginning to mellow on immigration (Macfarlane, 2017). This
stands in contrast to Canada, which has been rapidly increasing immigration targets in recent
years; the country increased its immigration target from 260,000 in 2015 to 300,000 in 2016 and
2017, and the government indicated that they will raise that target again for 2018, with the
rationale being to “meet labour market needs across the country” (O'Doherty, 2017). Looking at
how current levels of immigration have impacted the two countries, immigration should not be a
substantial fear for either. Though Australia has some legitimate concerns about immigrants
taking low-skilled work away from young workers, a cautious approach towards limiting
programs such as the “working holidaymakers” would be better than significantly reducing all
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immigration, considering the positive fiscal impact and comparatively high human capital of
foreign-born Australians. Similarly, while the fiscal impact is unclear for foreign-born
Canadians, their high levels of human capital and narrowing of Canadian wage inequality
provide benefit to Canada. Though immigration in both countries may have some negative
effects on native low-skilled workers, it appears to have negligible or even positive effects on
both labor markets as a whole. The immigrant communities in both countries suffer from a wage
gap; however, it stands to reason that with more educated immigrants coming in, those wage
gaps will narrow further. While making a blanket “immigration is good” or “immigration is bad”
statement would ignore the nuances of both countries’ situations, both countries appear to have
received substantial economic benefits from immigration that is worth whatever downsides there
may be.
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Tables
Table 1: Canadian Permanent Residents by Category
Percentage distribution
Category 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 AVERAGE 2006-2015
Canadian Experience 0.0 0.0 0.0 1.0 1.4 2.4 3.6 2.8 9.1 7.4 2.8
Caregiver 2.7 2.6 4.3 4.9 5.0 4.5 3.5 3.4 6.8 10.0 4.8
Skilled Trade 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.7 0.1
Skilled Worker 42.1 41.3 42.0 38.1 42.5 35.7 35.5 32.1 26.0 25.8 36.1
Entrepreneur 1.2 0.9 0.7 0.5 0.4 0.3 0.2 0.2 0.2 0.1 0.5
Investor 3.2 3.1 4.1 4.1 4.2 4.3 3.6 3.2 2.9 2.0 3.5
Self-Employed 0.4 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.2 0.2 0.2
Start-up Business 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Provincial Nominee Program 5.3 7.2 9.1 12.0 13.0 15.4 15.9 15.4 18.3 16.4 12.8
Economic 55.0 55.4 60.3 60.9 66.6 62.8 62.4 57.2 63.5 62.7 60.7
Sponsored Spouse or Partner 18.3 19.3 18.2 17.7 14.7 15.7 15.5 17.6 17.3 17.1 17.1
Sponsored Children 1.9 2.1 1.8 1.5 1.3 1.4 1.2 1.2 1.4 1.2 1.5
Sponsored Parent or Grandparent 8.0 6.7 6.7 6.8 5.5 5.7 8.5 12.5 7.0 5.7 7.3
Sponsored Extended Family Member 0.2 0.2 0.1 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1
Sponsored Family Member - H&C Consideration 1.5 2.1 2.2 2.3 1.7 1.8 1.7 0.8 0.2 0.0 1.4
Sponsored Family 29.9 30.5 29.1 28.5 23.4 24.7 27.1 32.2 26.0 24.1 27.5
Government-Assisted Refugee 2.9 3.2 3.0 2.9 2.6 3.0 2.1 2.2 2.9 3.5 2.8
Privately Sponsored Refugee 1.3 1.5 1.4 2.0 1.7 2.2 1.6 2.4 1.9 3.6 2.0
Blended Sponsorship Refugee 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.3 0.0
Protected Person in Canada 8.7 7.1 4.5 4.1 4.5 6.0 5.2 4.6 4.3 4.4 5.3
Resettled Refugee & Protected Person in Canada 12.9 11.8 8.8 9.1 8.8 11.2 9.0 9.3 9.2 11.8 10.2
Humanitarian & Compassionate 2.2 2.2 1.7 1.5 1.2 1.2 1.3 1.2 1.3 1.4 1.5
Public Policy 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.0 0.0 0.0 0.0
Other Immigrants not included elsewhere 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
All Other Immigration 2.2 2.3 1.8 1.5 1.2 1.4 1.6 1.3 1.3 1.4 1.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Citizenship and Immigration Canada. Canada - Permanent Residents by Category. 31 July 2017. Database.
Phillips, Janet and Joanne Simon-Davies. "Migration to Australia: A Quick Guide to the Statistics." 18 January 2017. Parliament of Australia. Web. 19 November
2017.
Table 4: Estimated net impact of immigration on the Australian Government Budget, by visa
category, 2010–11
OECD. "The Fiscal Impact of Immigration in OECD Countries." International Migration Outlook 2013 (2013): 125-189. Web.
Australian Government Productivity Commission. Migrant Intake into Australia: Productivity Commission Inquiry Report. Canberra: Australian Government
Productivity Commission, 2016. Web.
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Table 6: Taxes Paid by Canadian-borns and Immigrants [1970-2004], All Levels of Government
Javdani, Mohsen and Krishna Pendakur. "Fiscal Effects of Immigrants in Canada." Journal of International Migration and Integration (2013): 777-797. Web.
Javdani, Mohsen and Krishna Pendakur. "Fiscal Effects of Immigrants in Canada." Journal of International Migration and Integration (2013): 777-797. Web.
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Table 8: Education Level (By Percentage) of Australian and Canadian Native-borns and
Immigrants
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