Providing Tax Incentives to Hire Permanent Residents

As some who lives on Canada’s West Coast in British Columbia, I am only peripherally aware of the provincial election currently underway in Ontario.  However, when a friend sent me this video I couldn’t help but spend several minute researching the issue.

The Proposed Policy

From what I can tell (I haven’t been able to locate an official Ontario Liberal Party press release on their proposed policy), the Ontario Liberal Party is promising that if re-elected they will spend $12-million offering $10,000 tax-credits to employers that hire Permanent Residents who have been residing in Canada for five years or less.

Assuming that there are no administrative costs associated with the program (ha!), that works out to about 1,200 Permanent Residents’ employers being eligible for the tax-credit each year.  Considering that in 2010 118,000 people who immigrated to Canada settled in Ontario, this represents roughly 1% of Ontario’s permanent residents being eligible to benefit from the tax-credit.

An Ontario Liberal Party spokesman said that the tax-credit was intended to encourage employers to hire high-skilled workers “like accountants and doctors.”  Presumably it will therefore be limited to permanent residents intending to work in NOC 0, A, or B occupations.  I have not been able to locate any other information concerning eligibility requirements.

They’re Not Foreign Workers

Immediately after the policy was announced, the Ontario Progressive Conservative Party released the above you-tube advertisement stating that the proposed tax-credit was akin to affirmative-action, and would cause employers to give preferential treatment to “foreign workers” over “Ontarian workers.”

These labels are of course incorrect, and demonstrate either a woeful  ignorance of Canada’s immigration system or a deliberate attempt to mislead the public.  Foreign Workers are people who are working in Canada on a temporary basis.  They have not yet immigrated to Canada.

The proposed tax-credit would not be for employers of Foreign Workers.  It would be for the employers of Permanent Residents.  Permanent Residents are individuals who have already immigrated to Canada under one of Canada’s many immigration programs.  While Permanent Residents are not yet Canadian citizens, they can no longer be considered Foreign Workers because they are not in Canada on a temporary basis.

But Is it Good Policy?

Having said all that, I do have to agree with the Ontario Progressive Conservatives that the proposed tax-credit is akin to affirmative action.  I am not convinced that it is good policy.

My main criticism is that the proposed tax-credit flies in the face of one of the basic tenants of Canada’s immigration system.  Most of Canada’s various immigration programs are designed with the intention that the people who immigrate to Canada will provide immediate benefits to the Canadian economy, and that Canadian citizens should therefore not feel like they are being disadvantaged as people move here.

As such, an increasing number of programs, such as the Provincial Nomination Program and increasingly the Federal Skilled Worker Program, require that an individual be offered an offer of permanent employment before that person can apply for permanent residency.

These are employers who when deciding between whether to hire a Canadian or a foreigner determined that the latter would make such a valuable contribution to the employer that it would be worth the uncertainty and costs associated with the immigration process to hire that individual.  Presumably as these permanent residents already have jobs they would not benefit from the proposed tax-credit.

Other programs, such as the Canada Experience Class and to a decreasing extent the Federal Skilled Worker Program, are based on the assumption that the people who are immigrating to Canada have demonstrated that they can enter the Canadian labour market with relative ease and likely find employment.  Offering employers tax-credits to hire these individuals calls into question the whole reason that these people were allowed to immigrate in the first place.

The remaining immigration programs are more humanitarian based, and include family re-unification and refugees.  While I can understand employment programs based on this, it does not seem that these individuals, who are generally not as skilled as the people who immigrate in the economic streams, are intended to benefit from the proposed-tax credit.

Public support for Canada’s high per-capita rate of immigration largely depends on the notion that the people immigrating provide immediate benefits to Canada, that the arrival of such a large number of people does not disadvantage working Canadians.  If the Ontario Liberal Party believes that Canada’s immigration programs are not working, and that the individuals who are arriving are unable to find employment, then the solution should be to revise their Provincial Nomination Program, to increase their control over immigration to Ontario, and to lobby Ottawa to change Canada’s immigration system.

It should not be to give preferential treatment to recent arrivals, and to destroy the main basis used to justify high immigration levels.

 



 


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