Transcript: Tony Keller

My interview with the Globe and Mail columnist

For decades now in Canada, there has been a bipartisan, pro-immigration consensus. But in recent weeks, we have watched that consensus fall apart. My guest on today’s program has been covering this development in his columns for The Globe and Mail. He argues that it was the Liberal government that broke the consensus — and it must be the Liberals who restore it. 

Tony Keller is a veteran Canadian journalist and a columnist for The Globe and Mail. 

(This podcast was recorded before Immigration Minister Marc Miller’s announcement that the federal government will cap international student visas. You can read Tony’s latest column on that development here.)

This is an edited transcript for paid subscribers. You can listen to the episode for free here.

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TH: It's great to have you on the program today — at what is turning out to be a pivotal moment in Canada for the immigration conversation. You've written on the subject in the past, in both this country and elsewhere; I'm thinking of a memorable piece you wrote for The Atlantic. Today, I want to talk about two of your recent columns in the Globe and Mail, and we will get to that. But first, for our listeners outside of Canada, can you start by giving us a brief explainer on what the historic Canadian context has been for immigration? You write that “Canada used to be a model for the world.” What did that look like?

TK: Canada and the U.S. have similar immigration histories, similar immigration systems — but with some  really interesting differences. So, the similarity is that both Canada and the U.S. are countries whose populations were historically built on immigration, with fairly large immigration inflows in the late 19th century and the early 20th century. And then a very big change. Both countries in the early 20th century really limited immigration all the way from basically the end of the World War I all the way up to the 1960s. 

Then, in the early 1960s, both Canada and the U.S. liberalized their immigration systems and allowed much more immigration, and immigration of people of all races. Prior to the 1960s, both Canada and the U.S. had systems to really limit who got to come to the country — not just in numbers, but in terms of race. In the 1960s, both countries liberalized and Canada did a better job of how it liberalized the system.

The Canadian system was built to focus on recruiting people with skills and education. We didn't always do this perfectly. But that was the idea of the system: There would be some family reunification, there would be some refugees, and there would be a big core that was about economic immigrants. 

We also did a really good job of controlling the border. Meaning Canada invited a lot of people in — for a long period we had a higher legal immigration rate than the United States — but at the same time, unlike the United States, we didn't really have very many people who just came to Canada one way or the other, who showed up and stayed. That was not a debate at all in Canada. 

So, that's the context leading all the way up to, let's say, the early to mid 2010s. And then in Canada what happens is two new streams of immigration start to grow in the 2010s: temporary foreign workers and visa students. Those two streams have really exploded since the Trudeau government came into office in 2015. They were increasing quickly and they've just kept on increasing. At the same time, the Trudeau government has also raised Canada's official regular immigration targets, which were about a quarter of a million in 2015 and are now close to half million people a year. 

That's a lot. The Canadian population is about one ninth of the United States. So, the U.S. has, in recent years, had about one million legal immigrants a year. Take those Canadian numbers; it means that Canada was, in the past, about two to two-and-a -half times the U.S. level. And we're now looking at sort of three or four times the U.S. level in legal immigration. Then on top of that, we have layered a “temporary” — I use that word advisedly — immigration system for students and temporary foreign workers that is even larger than the official immigration system.

In 2022, we had more than one million people come into Canada. In U.S. terms, that would be 9 million people arriving in the United States, or about nine times the level of official immigration. In 2023, we had somewhere north of that. In fact, in the most recent quarter for which we have data, the number was over 400,000. Which would suggest you could be as much as 1.6 million for a full calendar year. We have just seen an incredibly rapid runup. 

To summarize, Canada was a fairly high immigration country relative to other developed countries, with pretty good border control. We have now turned into a much higher immigration country, and we have some problems with border control. I can get into more of that a bit later.

TH: In your column that is just out today, you write that Canada's unique, decades-old, pro-immigration consensus has been broken. It's interesting that our immigration minister has basically come out and said that the system has gotten out of control. You have gone through some of the data; I think it's also worth noting that the number of temporary residents in the country is up more than 1000% since the year 2000. This is exacerbating the housing crisis. It's putting pressure on our healthcare system. But, as you point out in your previous column, the National Bank of Canada economists have also concluded that we are in a “population trap.” Walk us through what that is — and what it might mean for Canada.

TK: So, our population has grown so quickly, in just the last couple of years, that we can't really keep up. Every person who comes into the country obviously needs somewhere to live. They need social services, their kids have to go to school, et cetera. It's very easy to raise the population quickly, whether you're Canada or the United States, because there are hundreds of millions of people around the world who would like to come to a country like Canada, a country like the United States. To all of the major western European countries. 

In a weird way, that's the easy thing. Raising your population is easy. Raising it in a way where the economy and its social services keep pace, that's a lot more challenging. It takes years to permit and build a new house, a new condo, a new apartment building. It takes a long time to train doctors, or to hire new doctors, or to build new facilities, build new hospitals, build new public transit. 

We've ended up in this odd position where, over the last couple of years, the Canadian economy has continued to grow. If you just look at the number, gross domestic product, the Canadian economy is actually doing pretty well in the G7. We're growing almost as fast as the United States. But our population for the last couple of years has been growing so much faster than the economy. That is where some economists have said, “Hang on a second, we're in a kind of a population trap where we can't invest quickly enough and businesses can't invest quickly enough.”

Here's a way to think of it: Imagine you have a business that digs ditches and you have five shovels and you have five employees. Tomorrow you have seven employees, but you still only have five shovels. The per employee productivity level is actually going to decline, because you don't have enough capital, equipment, technology to raise the productivity level or even keep it steady. In the long run, that is solvable. We can find ways to encourage more foreign investment. We can find ways to have Canadians save more. There are all sorts of things we can do. We can build more houses. But those are very long-term solutions, and they're very challenging. 

Canada has had a problem of insufficient business investment for a long time, and we're layering on top of that more and more and more employees. At least in the short term, and maybe in more than the short term, we have created a recipe for declining Canadian productivity, somewhat lower living standards due to somewhat declining gross domestic product per capita. Which is not ideal. That's not what our immigration system is supposed to be doing. That's the opposite of what immigration is supposed to be doing.

TH: Your colleague Andrew Coyne, who I've interviewed for my Substack in the past, takes a different view on this issue. He says the country is having one of its “periodic panics about immigration,” and that if per capita growth has been lagging, “all that the rapid population growth has done is to make the cost of bad investment and housing policies more explicit.” Slowing immigration, he writes, is a band-aid response. What do you make of that argument?

TK: I would say he's partly right and mostly wrong. Here's where he's partly right: There's no speed limit on the amount of investment a country can make in its infrastructure. There's no speed limit on the amount of investment businesses can make in capital, equipment and improving their productivity. It's true, those are variables that can be changed. What I will say though is that those are hard to change. Those are difficult, those are challenging. 

If raising Canadian productivity and getting Canadian labour output up to the level of the United States was easy, we would have already done it. We have been struggling since the 1970s to try to be as productive per hour of work as the United States. Canada is a highly developed country, where we do lots of things really well, but we've always had this gap with the U.S. There have been times when we've narrowed it and it seemed to be narrowed all the way up into the 1990s and the early 2000s. 

Then there are times when it's been getting wider. It's been getting wider for really the last generation. We struggle to understand exactly why. We struggle to understand what policies can change that. In theory, that can all be changed. In practice, it's really, really, really hard to do. If you layer, on top of that, bringing in over a million people a year abruptly into the labor force — a fairly high number of whom are not high skill workers, but actually low skill, low wage workers — it becomes really difficult to resolve the labour productivity problem. And, as well, the housing problem. 

He's also right that the housing problem can be resolved — Canada's housing shortage and extremely high cost of housing, particularly rental housing. He's right, that can be solved in the long term. But for people who need an apartment in Toronto for less than $2,000 a month, it's not really very helpful to tell them, “Listen, we can probably fix this by 2028, 2029, 2032.” That doesn't really help them very much. 

He's also treating high immigration as the thing we can't change and every other policy in the country as the thing that we have to change. Which is weird, because actually the one thing we've changed is the immigration level. The other things were constant and fixed. We've changed one thing and we're now going to have to change all these other policies as a result. At the moment, the way we have designed immigration — or not designed it — over the last couple of years, I think has had more negatives than positives. I think the evidence is fairly clear. It has, at least in the short term, had more negatives than positives. 

We can design an immigration system that will have more positives than negatives. I think our previous system had more positives than negatives. But that's not where we are right now.

TH: It’s interesting, the moment that we are in. The Globe's editorial board has come out saying that our immigration system is broken. We are seeing that sentiment reflected in the polls. Now, in your most recent Globe column, you argue that the Liberals must be the ones to fix this problem, and you outlined some steps that the government could and should take. We don't have a ton of time today. So I want to focus on just one — getting back to what you referenced just a moment ago — the high skilled versus low skilled. We could, as you suggest in your column, restrict temporary foreign workers to high-end jobs. You write, “recruiting a foreign dentist or computer engineer or skilled construction worker. Go for it. Depressing the wages of the poorest Canadians by recruiting overseas fast food clerks. Sorry, no.” Can you unpack that for us?