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In a 1998 editorial,
Seth Klein, director of the Canadian Center for Policy Alternatives (CCPA),
claimed to be nonplussed about the "Brain Drain hype," as he put it.
Using the kind of facile reasoning we have come to expect from the CCPA, Klein
blamed the "small net outflow of university educated people" from
Canada to the U.S. on tax cuts, of all things. According to his editorial, tax
cuts, and in particular cuts causing the shrinkage of the public sector, are
exacerbating the insignificant brain drain.
The CCPA, which seems
to equate prosperity with growing the government and the public sector, likes to
think of government patronage as a catalyst for innovation. The organization can
pretend not to understand that most innovation happens in the private sector,
but the CCPA and its director Mr. Klein, can no longer pretend the brain drain
doesn't exist.
The facts have been
known for some time now. "The brain drain is real and costly," say
Simon Fraser University economists Don DeVortez and Samuel Layrea in a 73-page
study for the Center for Research on Immigration and Integration in
the Metropolis. Between the years 1982 and 1996, 54,755 highly trained
Canadians emigrated to the US. And although Canada had, during that period,
gained more skilled immigrants than it lost, immigrants weighed heavily on the
economy.
For one, there was a
marked decline in the quality of immigrants in the post 1980s years, a decline
that has exacerbated the effects of the outflow to the US. Then there were the
administrative and settlement costs Canada incurred in processing immigrants.
And finally, skilled newcomers take a decade or more to catch up to those who
leave in terms of earning potential.
DeVortez and Layrea
put the cost to the Canadian economy of the outflow for the period spanning
1982-1962 at $12.6 billion dollars. The study concludes that, on average,
skilled immigrants were no match for Canadian-trained emigrants in terms of the
losses to the Canadian economy.
But could the
movement of skilled workers to the U.S. be nothing more than a temporary
to-and-fro to be expected between two countries joined at the hip by NAFTA? Can
we not expect movers who leave on a temporary work permit to return to Canada?
Not likely, say the authors. The North American Free Trade Agreement has made
conversion of temporary work permits to permanent residency an easy and
streamlined process. Temporary movers to the U.S. are thus making their stay a
permanent one with very few bureaucratic hitches.
Notwithstanding the
cost of the brain drain to the Canadian economy, I would ask readers to pay
careful attention to the reasons DeVortez and Layrea give for the brain drain,
and their attendant proposals to staunch the flow. Why? Because the thinking
behind it is about punishing Canadians for wanting to make a better life for
themselves away from Canada.
In explaining why
skilled Canadians are leaving for the U.S., Don DeVortez and Samuel Layrea keep
fingering "the size of the educational subsidy received by Canadian
graduates that is tax payer financed". The logic is strange: The typical
Canadian-born professional "would not be motivated to move if there existed
no educational subsidy". The Authors do not want to stop educational
subsidies, after all, the Americans subsidize their students, but rather propose
a forgivable loan scheme. Under this scheme, a graduate would have to stay in
Canada until she has paid taxes equal to the principle of her loan.
If the individual
leaves prior to that, the authors propose to force him to repay the residual of
the educational loan. In other words, if you stay you are okay--if you leave you
pay! At the same time, the authors propose to refine immigration practices so as
to make immigrants compensate better for the exodus of Canadian talent, even
going so far as to propose giving skilled immigrants an income tax rebate.
While any tax rebate
is a good thing, one that is predicated on membership in an interest group is
less commendable. Worse still is the punitive spiteful stance adopted towards
prospective Canadian defectors. Why are suggestions for improving what Canada
can do for skilled immigrants not balanced with suggestions to improve things
for skilled Canadians so that they don't flee? What we have here amounts to a
further devaluation of talented, upwardly mobile Canadians.
My guess is that such
schemes are doomed because they fail to consider the real complexion of human
ambition and motivation. Do the authors think that individuals intent on leaving
because they envisage a better life for themselves will be stopped in their
tracks by the foreclosure of a student loan? The UBC Alumni has posted a brain
drain questionnaire on its web page in which it invites comments from people who
have left. If anything, these anecdotes flesh out the skeletal thesis DeVortez
and Layrea offer as to why graduates are leaving.
The reasons cited by
the alumni for migrating to the U.S. are countless: from the prospects of
doubling take-home pay due to low taxes, to job opportunities, fewer unions,
fewer strikes and the high premium placed on rewarding merit. The overriding
theme is one of escaping the sludge of socialism. The words of one expatriate
are particularly poignant: "Countries that are on the forefront of
innovation want to keep their brains". Canada, wrote this exile, is looking
merely to balance immigrants with emigrants.
This brainy
expatriate seems to have captured the thrust of the policy recommendations in
the DeVoretz and Layrea paper.
ã1999 By Ilana Mercer
The North Shore News
April 23
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