Imagine Ania, a Ukrainian immigrant who arrived in Berlin, Germany in the spring of 2022 with her teenage son. At the moment, the 2001 Temporary Protection Directive provides them with the reassurance that they can stay for one year. If Ania ends up staying longer term, however, her career and economic success will depend on choices she had to make in that first year – choices that were based on how long she expected to stay.
When the chances of staying in a host country are uncertain, why spend time and money learning the language? Why integrate? Why start to build a new life? Will Ania insist as vigorously on her son completing his homework in a foreign language and school system when she is unsure of how long she will be in the EU?
If Ania and her son do stay, however, the effects of decisions made during the very first months and years following their arrival could reverberate for decades. Ania may have been a certified architect in Ukraine, but to be recognised and work as an architect in her host country will require additional qualifications. She may choose to take a lower-paid job instead of investing in additional training if there is uncertainty about how long she can stay.
Being able to provide certainty about the option to settle is often a significant factor for both refugees and other migrants when it comes to settling and thriving in a new country for the long term. Immigration policy should reflect this need for certainty.
Looking beyond a one-year permit
EU leaders triggered the Temporary Protection Directive for the first time this year, following the Russian invasion of Ukraine on February 24. It provides a non-bureaucratic one-year permit for refugees arriving in EU countries. It is designed as a means for member states to respond rapidly to large-scale crises, preventing a collapse of regular asylum systems.
But many of the refugees that have since arrived in the EU may well have to stay for longer than a year. Although the directive can be extended, the prospect of settling for the longer-term remains uncertain for these refugees. This may have profound consequences for both immigrants and their new countries.
My recent research with Jérôme Adda of Bocconi University and Christian Dustmann of University College London shows that giving migrants certainty about the option to stay at an earlier stage could improve their integration, shape their economic contributions, and ultimately cement their acceptance in host societies. We used data on Turkish immigrants in Germany, where a large-scale survey has collected information for decades on immigrants’ expected length of stay. Many of the migrants interviewed for this survey arrived in Germany under guest worker agreements with southern European countries in the 1960s and 1970s.
The immigrants who expected to stay in Germany permanently integrated faster, acquired new language skills more quickly and saw greater economic progress. In particular, we found that short, temporary permits with an uncertain chance of extension make people behave quite differently than those who expect to stay permanently. The latter spend more of their income locally, and have a higher incentive to integrate, learn the local language and acquire other country-specific skills that increase their chances of employment. This furthers career progression, productivity and earnings in the host country. So individual choices will have macroeconomic implications in terms of immigrants’ tax contributions to their host country’s fiscal budget. An understanding of this kind of behaviour is important for the design of optimal migration and naturalisation policies.
Return intentions
Longer-term migrants are often more demanding about the type of job they are willing to accept. And, while contributing more via income taxes, they are also likely to use public services and health care for longer, particularly as they grow old and their contributions to these services fade. Long-term migrants are also often joined by their families. This raises demand for the host country’s education system, but also fosters further integration.
For many migrants who intend to return to their home country, it is more common to send money home to their families rather than spending it locally. And, knowing that their stay in a host country is limited, they may decide to forgo host country-specific investment in areas such as learning languages and new skills to suit local economic needs, which can be costly.
Governments often delay making a decision on whether to allow a migrant permanent status for several years, basing it on employment, earnings or other targets such as learning the language. Our research shows this not only affects the number and kinds of people that chose to migrate to a certain country, but also their career profiles and long-term contributions to their new home country. The idea that long-term certainty encourages integration and supports economic contributions applies to migrants in many contexts, including that of economic migrants and political refugees, as well as documented and undocumented immigrants.
The new refugees into the EU from Ukraine, who have been granted one year of protection initially, have a limited incentive to invest in local skills. This certainly includes the host country language, but it also extends to acquiring qualifications and certifications that are of limited value back home, but are valuable to the host country.
Clear legal procedures that inform immigrants early on about their prospects of staying in their host countries are crucial for decision making and could greatly affect the lives of these people. It will also impact the costs and benefits to the countries where they work, consume and receive support or pay taxes. If immigration policy takes this into account, it could do much to help immigrants like Ania and her son feel more at home, while also boosting their economic contribution to their host countries.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
