Fiscal Effects of Immigrants in Canada

In this paper, we present estimates of the fiscal transfer to immigrants from native-born Canadians. The fiscal transfer is the amount of money that immigrants absorb in public services less the amount that they pay in taxes, suitably adjusted for scale effects in public provision of services, life-cycle effects in tax payment, and so on. Our work builds on previous work in the literature, updating from the last scholarly work in this area by Akbari (1989) with new and richer data. Akbari found on the basis of 1981 Census data a small fiscal transfer from immigrants to the native-born amounting to about $500 per year per immigrant. Over time, the composition and income attainment of immigrants has evolved somewhat unfavourably for immigrants, and we find on the basis of 2006 Census data a small fiscal transfer from the nativeborn to immigrants of about $500 per year per immigrant. ∗ Javdani: [email protected], 3333 University Way, Kelowna, BC V1Y 9M5, Canada. Pendakur: [email protected], 8888 University Drive, Burnaby, BC V5A 1S6, Canada. The authors wish to acknowledge the financial support of the Social Sciences and Humanities Research Council through its Metropolis program and Metropolis British Columbia for institutional support.