Christopher Worswick is a professor of economics at Carleton University and an external fellow of the Centre for Research and Analysis of Migration, University College London.
This essay is part of the Prosperity’s Path series. In a time of geopolitical instability and a shifting world order, the challenges facing Canada's economy have only gotten more visible, numerous and intense. This series brings solutions.
In 1957, my parents left the north of England to come to Canada. They did not expect this country to be their long-term home, but they had great careers and close to 70 happy years together in Canada.
When I first looked for an academic job back in 1995, I landed a great faculty position at the University of Melbourne. After five amazing years living in Australia, my own family returned to Canada having made lifelong friends and with a deep understanding of another country.
My travels were different from my parents’, though. As recently as the 1950s, Canadian citizens were considered British Subjects, and there were certain labour mobility privileges that were reciprocal within Britain, Canada, Australia and New Zealand.
My option to work in Australia was owing to the generosity of Australia’s immigration program at the time, rather than any such arrangement.
What if Canada could take inspiration from our past and introduce reciprocal migration agreements now, and not just with Australia, Britain and New Zealand – the old CANZUK idea – but also with the likes of Japan or Singapore?
This may sound like a radical move, but there is support for moving in that direction. A 2018 poll showed 76 per cent of Canadians are in favour of CANZUK. Federal Opposition Leader Pierre Poilievre, in a visit last week to Britain, called for such an arrangement. Prime Minister Mark Carney, who visited Australia last week, has built his brand on closer ties to allies, and the Liberal Party endorsed CANZUK at its 2023 convention.
Prime Minister Mark Carney meets with Australian Prime Minister Anthony Albanese in Canberra during his visit to the Australia in March.DAVID GRAY/AFP/Getty Images
Labour mobility is a central feature of the European Union’s common market. It makes all involved countries better off because it allows workers to move to the country where their skills are most highly valued. Using a standard economic model, the U.S. economist George Kennan found that, hypothetically, allowing free labour mobility across the world could generate 50- to 100-per-cent increases in world GDP. But reciprocal migration agreements need not cover the entire world to have some of these benefits. In 2017 alone, free movement of workers in the EU raised collective GDP by an estimated €106-billion ($160-billion).
Greater labour market integration across countries will also improve production efficiency through the sharing of ideas as workers go to foreign companies and share their experiences with their networks at home. Part of these potential benefits can be seen through our existing immigration program. One study finds that immigrant employment at Canadian companies expands exports between those companies and the immigrants’ home countries.
A common labour market also helps smooth country-specific shocks. If there is a sectoral shock in one country, the capacity of some displaced workers to migrate to the other country will offset at least part of the negative consequences. Researchers find that labour mobility across countries in the euro area, primarily by immigrants, reduces the overall variation in employment rates over the business cycle. This type of mobility also raises the welfare of workers in the countries covered by the agreement in advance of a shock because it provides partial insurance against these economic downturns.
All this, of course, raises the issue of whether one country may be worse off under such labour arrangements. The migration agreement could lead to a large influx of low-wage workers from a low-wage country to a high-wage country. But for countries with comparable economies, what results is not so much any net changes in work forces but a more efficient distribution of labour, benefiting both.
Canada has primarily focused on economic immigration designed to admit large numbers of immigrants in order to support the growth of average living standards. However, in recent years, Canada’s immigration focus has shifted to population goals rather than raising GDP per capita.
Added to this policy shift, the Trudeau government’s massive expansion of the number of temporary residents in Canada greatly expanded the number of workers in their 20s – primarily coming from lower-wage countries – competing with younger Canadians.
These recent immigration surges, coupled with the weak Canadian economy, have left younger Canadians frustrated. It is time to chart a new course.
We can build on what we already have. Canada has been slowly and cautiously adding limited migration agreements as clauses of new free-trade agreements. Starting with the Canada-U.S. Free Trade Agreement implemented in 1989, workers in certain higher-wage occupations can automatically receive visas to work temporarily in the other country if they have a job offer from a company in that country. These visas have led to migration of some workers across the Canada-U.S. border, but they do not lead to permanent residency status.
Even with all of President Donald Trump’s concern about immigration, these visas survived the NAFTA renegotiation that led to the USMCA agreement. As I have argued in the past, we should deepen this labour-market integration with the U.S. by expanding the number of higher-wage occupations eligible for the USMCA visas.
Similarly, labour mobility clauses have been included in other free-trade agreements such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) free-trade agreement, the Canada-EU Trade Agreement (CETA), and the Canada-UK Continuation Trade Agreement. These clauses are less ironclad than the USMCA equivalent and leave the receiving country considerable discretion on who will be granted a work visa.
Former Prime Minister Justin Trudeau and former European Council President Donald Tusk attend the signing ceremony of the Comprehensive Economic and Trade Agreement (CETA) in Brussels on Oct. 30, 2016.FRANCOIS LENOIR/Reuters
These are all good initiatives and have slowly moved us in the direction of a common international labour market among higher-wage economies. Now, we must further our labour integration through deeper reciprocal migration agreements with Australia, New Zealand, European countries, as well as other higher-wage countries, such as Singapore and Japan.
This is about the bigger picture, too. As Mr. Carney argued in Davos on Jan. 20, countries like Canada need to build “the coalitions that work, issue by issue, with partners who share enough common ground to act together.” Reciprocal migration agreements with other developed, market-oriented countries can be an important part of that process.
These agreements can also enhance permanent immigration programs and open pathways for older Canadians to live for extended periods in other countries. As the allure of retiring to the U.S. sunbelt wears away for many Canadians, imagine how popular a right to live in Australia, New Zealand, Europe or Asia could be if reciprocal migration agreements can be made.