Fiscal Effects of Immigrants in Canada

In this paper, we present the 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 works in the literature, updating from the last scholarly work in this area by Akbari (Can Public Policy 15(4): 424–435, 1989) with new and richer data. Akbari found on the basis of the 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 unfavorably for immigrants, and we find on the basis of the 2006 census data, a small fiscal transfer from the native-born to immigrants of about $500 per year per immigrant.