On November 19, 1999, the Metropolis Project Team hosted a Conversation sponsored by Citizenship and Immigration Canada on the topic of Absorptive Capacity. The Conversation took place in Ottawa and brought together experts from academe, three levels of government, the media and the community sector. The aim of the meeting was to enlighten and to contribute to a more informed debate as well as to provide some practical approaches that will assist in making immigration decisions. In order to create a candid and free flowing exchange of ideas, the format precluded any formal presentations. Prior to the meeting, participants only received a brief text exploring the topic, which then became the starting point for the Conversation. The day-long meeting was a success with its animated discussion and productive exchanges among conversants.

The following pages give an overview of the Metropolis Conversation on Absorptive Capacity. First is a presentation of the topic - the same text which participants received ahead of the discussion. Second is a report of the Conversation itself. Rather than a summary of proceedings, it highlights the many points of discussion in the course of the meeting and will serve as an aide-mémoire to participants. Finally, this document lists Conversation participants giving their contact information.

Conversation Topic

Absorptive Capacity: Too Many Immigrants? Not Enough? How Would We Know?

Discussions of absorptive capacity and its implications for immigration levels certainly precede the modernization of our immigration planning and management system which was introduced in 1979-80. The importance of that year lies in the requirement for successive governments to plan their immigrant intake, to table levels plans in Parliament and to indicate how they came up with their figures. The resulting announcements have tended to rely as much on rhetoric and a reading of the political pulse as on solid analysis. This is almost certainly due to the lack of agreement on what the concept entails; on the degree and manner in which governments ought to influence it; and, indeed, on whether governments are capable of so doing. Somewhat surprising given the charged atmosphere in which such discussions often take place and the fuzziness around basic concepts, to date, political and public debate have been very mild. Not so in other countries with immigration programs similar to Canada's. Both Australia and the United States (largely at the state level) have had divisive and acrimonious debates. If Canada is to escape this fate, we will need to carefully structure the debate, set the terms under which it will take place, clarify our thinking on the subject of absorptive capacity, develop sound empirical measures that can better support political decisions and indicate clearly the state of scientific evidence around those factors.

On some fronts, there would appear to be broad agreement. Most Canadians, for example, accept that immigration intake should be influenced by such factors as the state of Canada's economy, by public attitudes towards immigration and cultural change and by public willingness to support the complex of programs that are needed to integrate newcomers. It is also generally accepted that immigration continues to have a role in Canada's future economic and cultural development and that, consequently, there is a duty on governments to act in order to enhance or expand absorptive capacity. Implicit in this is the notion that absorptive capacity is not static and fixed but can respond to public policy.

The following questions are intended to help frame and focus the discussion:

• How should the concept of absorptive capacity be formulated? Are there important differences in the way the concept is used by academics, by politicians and policy makers and by the public?
• Is absorptive capacity a holistic concept or is it more useful to think of it in component terms?
• Is absorptive capacity always the same for all components of the immigration stream or does it differ for the different immigrant classes (are we, say, more able or prepared to accept refugees than family immigrants)?
• Has absorptive capacity, or its components, been changing and, if so, what might we expect in the future given the deep structural adjustments that are taking place in the world (in the economy, in society, in politics, in technology)?
• Can absorptive capacity be exhausted? How would we know when this occurs? Can we predict its occurrence?
• What are the determinants of absorptive capacity? Can governments operate on these determinants with a view to expanding capacity? If so, where should efforts be directed and how? Which other stakeholders should be enlisted in these efforts?
• What, if any, are the policy and program implications for immigration levels and program management? For the management of other related or supportive programs?
• What scientific evidence exists to support the conclusions that have been reached? What implications does this discussion have for the behaviour of academics and policy makers?

Conversation Report

Citizenship and Immigration Canada's decisions on immigration levels have a fundamental impact on Canada's social and economic future but debates about immigration have tended to focus on numbers. In particular, the concept and measurement of Absorptive Capacity are under-researched.

Absorptive Capacity is a complex and dynamic phenomenon over which governments can exercise only partial control. The public's willingness to accept the social change entailed by immigration depends on both actual and perceived gains. These are, in turn, dependant on values.

The objectives of Conversation One were:

• to gain a better understanding of the concept of Absorptive Capacity and its components;
• to assess the opportunities for policy intervention;
• to determine how academic research might enhance the ability of key stakeholders to intervene.

The Conversation began with accounts of two historical viewpoints on Absorptive Capacity. Early in the 19^th Century Lord Sifton stated that Canada could absorb any number of immigrants - even peasants who could speak neither English nor French - because the nation's rural regions were vast and unsettled. In contrast, in 1947 Prime Minister Mackenzie King stated that Canadians wanted to retain a homogeneous ethnic and cultural character. Such views represent the historical parameters for the federal government's setting of immigration levels.

From this point of departure, participants discussed Absorptive Capacity from both an academic and policy perspective, focusing on its social, political and economic implications for Canada. The point of the exercise was to promote an open exchange of views; consensus was not sought and only infrequently found. Some of the key points of discussion are captured below.

Theme: Vision

On the need to articulate and entrench a vision...

• Immigration can be viewed from either an economic or an ideological perspective. From the economic perspective, immigration targets can be optimized simply by asking who will contribute quickly to the economy and who will be a burden. From an ideological perspective, any target number that is acceptable to most Canadians is appropriate.

• Canada's immigration policy lacks specific goals and an overall guiding vision. Perhaps targets should be dropped altogether in order to allow anyone who wishes to immigrate to Canada to do so. At least that approach would have the merit of eliminating social bias from the Canadian approach to immigration.

• The "nation-building" goals that Canadians may establish for immigration are dependent both on their values and what they are willing to pay in order to integrate immigrants.

• Until the 1960s Canadian immigration policy was based on ensuring that Canada would be a "European" nation in the New World. From the 1960s to the 1980s, Canada's approach to immigration was intended to build its international status as a "middle power." Today Canada is trying to be a "sophisticated niche player in the global economy". This means that numbers are not as important as the skill sets of immigrants.

• Wealthy nations require "open" immigration policies to build and maintain their economic well-being. Canada must set "proactive" policies to attract and keep well-qualified immigrants in the country or risk becoming a "back door to the USA."

• To focus Absorptive Capacity on a target number is too narrow. The issue is global in scope and nations deal with it in different ways, often involving cultural and trade considerations as much as, if not more than, a simple target number.

• Immigrants with means do not find Canada's economic situation to be very attractive, while those without means want to come to Canada. Canada must promote its non-economic attractions in order to gain the immigrants that it wants.

Theme: Absorptive Capacity

On the link to Canada's socio-economic state...

• Absorptive Capacity can be treated like a bus with a fixed number of seats, but if immigration is an investment in Canada's future, perhaps there should be no arbitrary upper limit.

• Absorptive Capacity is a function of maximizing the benefits and minimizing the costs of immigration. The United States has absorbed a much greater number of immigrants than Canada, and with ten times our population remains a stable society.

• "Macroeconomic issues" rather than Absorptive Capacity should be the focus for the determination of immigration policy. The fundamental premise should be: More is better. Diversity is a strength, and immigration represents a brain drain to Canada.

• Absorptive Capacity should be based on a balance of the socio-economic benefits and costs of immigration. The benefits - which need to be better publicized - include a lower tax burden for Canadians, meeting skills shortages in the labour market, and social diversity. The costs include program administration, short-term labour market difficulties and social tensions. These costs and benefits must be considered with respect to both the host community and the immigrants themselves.

• The three immigration streams to Canada are governed by different forces, making target-setting extremely difficult. Family reunification is governed by non-economic factors related to the circumstances of families in Canada and overseas. It should not be tied to the levels established for refugees and "independent" immigrants. Those levels should be determined in consultation with groups interested in helping refugees and businesses searching for employees with particular skills.

• CIC does not have the resources to pursue skilled immigrants such as computer programmers from India.

• Absorptive Capacity should be determined by our capacity to manage the diversity that immigration brings and to integrate various types of immigrants into society.

• Absorptive Capacity should be calculated on net immigration. This would show that immigration levels are not high, given the outflow of people from Canada.

• Current targets are not being reached. A more useful question for this Conversation might be why the targets are being underfilled.

• The process for setting annual targets should be an "engaging process" that involves players at the community level who understand the service implications of the target.

• A target number is an essential component of Absorptive Capacity - and not merely because the Immigration Act requires it.

Theme: Structural Factors

On regional differences...

• There are regional differences in the desire to receive immigrants. For example, Newfoundland, which receives few immigrants, might wish to accept more, while other parts of Canada might wish to receive fewer.

• Many of the problems created by immigration are borne at the local and regional levels, so provincial and municipal governments as well as private players must be involved in defining and acting on Absorptive Capacity. Only large centres such as Toronto and Vancouver now have the necessary social infrastructure to attract and to integrate immigrants.

• Governments must ensure that immigrants have access to appropriate services in areas such as housing and second-language training. Canada cannot leave immigrants to fend for themselves as it did at the beginning of the 20^th Century, especially if they cannot immediately enter the labour market.

• There is a vision guiding Canadian immigration policy, but it is not being financed. Integration policies influence public tolerance of immigration, but funding determines the extent of integration structures.

• The inadequacy of integration programs is acute for "independent" immigrants. Problems such as the verification of academic and professional qualifications prevent them from achieving their economic potential.

• The costs from arrival to first job are too high for both the immigrant and the state. Too little is done to connect immigrants with employers before they reach Canada.

• Immigrants, like many Canadians, are facing greater problems in finding and keeping work. The difference lies in the fact that immigrants, unlike other new labour market entrants, are a "discretionary" population segment. The costs associated with integrating them into the labour market are avoidable (or controllable) through changes in immigrant admission and selection criteria.

Theme: Public Policy Implications

On calculating absorptive capacity...

• The Immigration Act should be amended so that immigration targets are established over a longer period than one year. Targets are now achieved only under optimal conditions.

• Factors which need to be considered in determining Absorptive Capacity include target immigration levels, the mix of immigrant types and skill-sets, the qualifications of "independent" immigrants, integration structures and the impact of jurisdictional questions such as intergovernmental fiscal transfers.

• Promote temporary and permanent immigration by issuing visas through bonded private-sector businesses and non-profit agencies. This would speed immigrant selection by removing it from the bureaucratic realm and linking it more directly with trade and humanitarian concerns, thus making it easier to recruit and integrate immigrants with the potential to make significant contributions to the Canadian economy.

• It was noted that such an approach would require:

• Measures to ensure that visas do not find their way into the black market.
• Individual Canadians to become more involved in immigration than they are at present, thereby strengthening immigration's legitimacy in the eyes of the public.
• Labour force criteria to determine when it was appropriate for industry to "import" new employees rather than to recruit and/or train in Canada.
• Better knowledge of the relative quality of the education systems of various nations to allow effective evaluation of foreign academic credentials.

Theme: Research Implications

On the need for empirical research to establish economic and non-economic benefits and costs of immigration...

• Absorptive Capacity is a useful public policy concept, but it is not very meaningful for academic researchers.

• Issues for academic study include whether immigration makes Canadians more receptive to social change and identifying socio-economic indicators that indicate when immigration is beginning to negatively impact on Canada's social and economic well-being.

• Gaps exist in empirical knowledge about immigration and its effects, including its impact on variables such as housing prices in urban centres.

• Macroeconomic models could provide answers to these questions, but they lack important data, have difficulty analyzing regional differences, and were not designed to measure variables related to immigration.

• More research on public attitudes towards immigration, immigrants, minorities and support for integration measures is needed.

• Canadians do not have accurate perceptions of the instrumental benefits and costs associated with immigration.

• A cost/benefit analysis of immigration will not provide a decisive measure of Absorptive Capacity because immigration's costs and benefits are dependant on values and there is no broad-based, public consensus around immigration and diversity.

• The relationship between numbers and public attitudes is uncertain and, possibly, specious. Australia recently cut levels by 66 per cent, but immigration remains as unpopular among Australians as ever. On the other hand, immigration is not an issue in New York City, which has received 25 per cent of total immigration to the United States.

• Public disapproval has led to more restrictive immigration policies in countries such as Germany and the United Kingdom. There are indications that the growing unpopularity of immigration in Ontario is related to the numbers received.

• Public opinion is related to immigrant success and to demonstrable evidence that immigrants and minorities are making an economic and social contribution. For this reason, findings of persistent immigrant poverty and greater difficulty in finding jobs are particularly worrisome because they may lead the public to withdraw support from integration programming at precisely the time when it is most needed.

Wrapup

Four key observations emerged from the discussion:

• There is an appetite among academics and policy makers for engaging in conversation and for discussing issues such as Absorptive Capacity.
• The discussion was highly speculative and (surprisingly) few of the arguments were rooted in empirical research.
• Policy makers need access to a stronger knowledge base on immigration issues. A number of areas requiring empirical study were identified.
• Academic research needs to be focused on critical issues such as absorptive capacity and policy makers need to engage the academic community more consistently and more frequently in policy discussions