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Canada Is Dying

• November 21, 2013 • 6:58 PM

Parliament Hill in Canada's capital city of Ottawa. (PHOTO: MARIA AZZURRA MUGNAI/WIKIMEDIA COMMONS)

Canada’s birth rate is so low that it’s relying entirely on immigration for any increase in the population, but places and businesses that depend on importing skills will suffer in the new talent production economy.

Like many of the wealthiest countries, Canada struggles with demographic decline. If not for immigration, it might resemble Japan. Don’t blame brain drain. It’s the birth rate, stupid:

A strong economy and a robust immigration policy have protected Canada from the demographic shock of decreasing fertility. The latest Statistics Canada data show that our birth rate actually improved from 1.5 in 2000 to 1.7 in 2011. Nonetheless, by 2030 any increase in the Canadian population will come almost entirely from immigration. That is why it is so vital to keep the public onside.

Emphasis added. Banking on the rest of the world bolstering ranks is risky business. Canada is dying? Get in line.

On the other side of the immigration solution coin is nativism and xenophobia. Newcomers look like competition for scarce jobs or a glut for driving down wages. Doesn’t help when big business is the face of cultural tolerance. A surprisingly cogent critique of immigration policy from Canadian federal Employment Minister Jason Kenney:

Employers must “put more skin in the game” to solve Canada’s skilled worker shortage by increasing wages and investing in skills training, federal Employment Minister Jason Kenney told a Vancouver business crowd on Wednesday. …

… “We are not impressed by the level of investment by Canadian employers on skills training,” Kenney said. “According to the OECD, Canadian governments spend more than the public sector in any other developed economy on education and skills training, but Canadian employers are at the bottom of the OECD.

“Our view is we could get more bang for the taxpayer buck by getting businesses to nominate the individuals who will receive specific training with a specific guaranteed job at the end of it. We’ve said to the provinces there is a lot of flexibility in how we can work out these agreements.” …

… “We’re now on the cusp of a big demographic time bomb,” Kenney said. “Next year will be the first year in the history of Canada’s labour market where more people will leave the labour market than will enter it.”

Quadrupling immigration levels to admit more than a million permanent residents a year is not the solution, Kenney said.

If the talent shortage exists, then raise wages. If raising wages doesn’t attract enough applications, then retrain the underemployed. I’m pro-immigration. Open up the border. But there are community costs. Companies don’t have to foot that bill. Like workforce development, immigration is a subsidy. “IT groups must learn to grow their own talent“:

The technology sector, at a lower level, is pursuing a similar path, with salary surveys regularly showing pay to be rising fast.

But technology is at a disadvantage compared with football, as it struggles to project an exciting workplace image, despite so many of its products being cutting edge. Employers need to work hard at improving their image.

But vitally, they need to invest more in training, apprenticeships and skills development. This need was highlighted last month by The Survey of Adult Skills, a shocking OECD report that assessed the proficiency of adults aged from 16 to 65 in literacy, numeracy and problem-solving in technology-rich environments. It showed how different approaches to education and skills produce different problems.

For example, South Korea, has more graduates than its technology-rich economy needs, but a shortage of school leavers, according to the labour ministry. Families are spending vast sums on overeducating their young.

The resulting levels of debt have repercussions, such as a low birth rate and reduced consumption. South Korean IT companies are being given incentives to take on school leavers in an effort to redress the imbalance.

Divorce the immigration issue from demographics and talent shortages. Focus on developing people. Industry gets a free ride and then complains about the graduates. Economic convergence and a global war for talent require a rethinking of workforce training. Talent production is the new economy. Places and businesses that depend on importing skills will suffer.

Jim Russell
Jim Russell is a geographer studying the relationship between migration and economic development.

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