Refugees: Myths and Facts #10
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Myth #10 Refugees cost Canadians too much money
The Facts: Refugees work hard to find employment and to integrate into a new country despite the disadvantages they face: learning a new language and culture, dealing with loss and trauma, difficulties finding a job, family separation etc. As well, the low level of recognition of refugee’s qualifications (15%) means that well-qualified refugees are often working at low paid jobs and thus paying lower taxes. On the other hand, many refugees are entrepreneurial and start small businesses, thus creating jobs. A 2016 Canadian study shows that after 4-8 years of residence newcomer rates of business ownership surpass the Canadian born rates.[i]
Numerous studies have tried to determine their net economic benefit, in other words, whether refugees (and immigrants) cost more than the financial benefit they bring to a country. A now discredited report from the Fraser Institute (which got a great deal of press) claimed that in 2005-06 each newcomer was costing taxpayers over $6000 annually. This study was flawed by estimates rather than real figures and serious inconsistencies in analysis. A 2013 study found that during the first ten years of residence, refugees and immigrants cost Canada about $500 per newcomer annually, based on taxes paid compared to services received.[ii] New studies are backing up the widespread conviction that immigration helps host countries economically. For instance, a US study found that over 20 years the average newcomer pays back all the assistance received and makes net contributions.[iii] Another study states that although first generation immigrants incur small costs to the host country, their children are among the largest net contributors to the country’s wealth.[iv] This is in part due to the high educational achievements of the children of immigrants and refugees who outperform third generation (or more) Canadians, according to a Stats Can research.[v]
[i] ‘’ Immigration, Business Ownership and Employment in Canada.’’ Stats Canada Report. David Green et al, March 2016. https://www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2016375-eng.htm
[ii] ‘’Fiscal Effects of Immigrants in Canada. Mohsen Javdani’’, University of B.C.-Okanagan & Krishna Pendakur, Simon Fraser University, May 2013. https://www.sfu.ca/~pendakur/Fiscal%20Effects%20of%20Immigration_V5.pdf
[iii] ‘’The Economic and Social Outcomes of Refugees in the United States: Evidence from the ACS’’ (NBER Working Paper No. 23498), William N. Evans & Daniel Fitzgerald, June 2017.
http://www.nber.org/digest/aug17/w23498.shtml
[iv] The Economic and Fiscal Consequences of Immigration. Francine D. Blau and Christopher Mackie, editors, 2017. https://www.nap.edu/catalog/23550/the-economic-and-fiscal-consequences-of-immigration
[v] ‘’Educational and Labour Market Outcomes of Childhood Immigrants by Admission Class’’. Stats Canada. Feng Hou & Anita Bonikowska, April 2016. https://www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2016377-eng.htm
https://www.immigration.ca/immigrant-children-canada-outperform-canadians-audio/
The Facts: Refugees work hard to find employment and to integrate into a new country despite the disadvantages they face: learning a new language and culture, dealing with loss and trauma, difficulties finding a job, family separation etc. As well, the low level of recognition of refugee’s qualifications (15%) means that well-qualified refugees are often working at low paid jobs and thus paying lower taxes. On the other hand, many refugees are entrepreneurial and start small businesses, thus creating jobs. A 2016 Canadian study shows that after 4-8 years of residence newcomer rates of business ownership surpass the Canadian born rates.[i]
Numerous studies have tried to determine their net economic benefit, in other words, whether refugees (and immigrants) cost more than the financial benefit they bring to a country. A now discredited report from the Fraser Institute (which got a great deal of press) claimed that in 2005-06 each newcomer was costing taxpayers over $6000 annually. This study was flawed by estimates rather than real figures and serious inconsistencies in analysis. A 2013 study found that during the first ten years of residence, refugees and immigrants cost Canada about $500 per newcomer annually, based on taxes paid compared to services received.[ii] New studies are backing up the widespread conviction that immigration helps host countries economically. For instance, a US study found that over 20 years the average newcomer pays back all the assistance received and makes net contributions.[iii] Another study states that although first generation immigrants incur small costs to the host country, their children are among the largest net contributors to the country’s wealth.[iv] This is in part due to the high educational achievements of the children of immigrants and refugees who outperform third generation (or more) Canadians, according to a Stats Can research.[v]
[i] ‘’ Immigration, Business Ownership and Employment in Canada.’’ Stats Canada Report. David Green et al, March 2016. https://www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2016375-eng.htm
[ii] ‘’Fiscal Effects of Immigrants in Canada. Mohsen Javdani’’, University of B.C.-Okanagan & Krishna Pendakur, Simon Fraser University, May 2013. https://www.sfu.ca/~pendakur/Fiscal%20Effects%20of%20Immigration_V5.pdf
[iii] ‘’The Economic and Social Outcomes of Refugees in the United States: Evidence from the ACS’’ (NBER Working Paper No. 23498), William N. Evans & Daniel Fitzgerald, June 2017.
http://www.nber.org/digest/aug17/w23498.shtml
[iv] The Economic and Fiscal Consequences of Immigration. Francine D. Blau and Christopher Mackie, editors, 2017. https://www.nap.edu/catalog/23550/the-economic-and-fiscal-consequences-of-immigration
[v] ‘’Educational and Labour Market Outcomes of Childhood Immigrants by Admission Class’’. Stats Canada. Feng Hou & Anita Bonikowska, April 2016. https://www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2016377-eng.htm
https://www.immigration.ca/immigrant-children-canada-outperform-canadians-audio/