What Can the U.S. Learn from Canada’s Immigration Policy?


Widespread debate about how to reform the U.S. immigration system has become a major theme in this year’s presidential race. The growing awareness of an estimated 11 million undocumented immigrants in the U.S. has sparked Republican candidate Donald Trump to promise that, if elected, he would round up all “illegal” immigrants and expel many of them from the United States upon taking office. Even scholars who reject such extreme measures as impractical and counter-productive argue that U.S. immigration policy needs to undergo significant reforms.

“Immigration policy, which has undergone minor modifications since the 1965 amendments to the Immigration and Nationality Act, has fallen out of step with the nation,” wrote economists Pia M. Orrenius, vice president and senior economist at the Federal Reserve Board of Dallas, and Madeline Zavodny, a professor at Agnes Scott College, in a recent study. “Caps on the number of visas have not kept up with either population growth, particularly among immigrants who want to bring in relatives, or with employers’ increasing demands for foreign workers. The mismatch between quantities supplied and demanded has resulted in lengthy backlogs for most numerically limited categories of permanent resident visas; shortages of numerically limited temporary work visas; frustrated potential immigrants and employers, and more than 11 million unauthorized immigrants.”

While public support for the immigration system has waned in the U.S., most Canadians support their immigration system, and the concept of multiculturalism that underpins it. In a nation only about one-tenth as populous (36.2 million) as the U.S. (322.7 million), the Liberal government of Prime Minister Justin Trudeau is on track to welcome 25,000 government-supported Syrian refugees by the end of 2016 or early 2017. In contrast, as of July 25, the Obama administration had exceeded two-thirds of President Obama’s target of 10,000 admitted by September 30. Obama announced in September that it plans to increase the number of Syrian refugees admitted to the U.S. to 110,000 in the fiscal year that begins October 1.

In a 2015 report by the Toronto-based Environics Institute, only 38% of Canadians agreed with the statement, “There is too much immigration in Canada.” Moreover, 54% of Canadians said they placed a higher level of importance on Canada’s official policy of “multiculturalism” than on such national symbols as hockey (39%) and the Queen (21%). Multiculturalism is most widely seen as “very important” in Ontario (61%, especially in Toronto at 67%), and among youth (63%) across the country.

Which factors account for contrasting views about immigration in the two neighbors, which otherwise share so many cultural traditions? What, if any, lessons can U.S. immigration policy makers apply from Canada’s experience as they set out to reform U.S. immigration policy?

Differing Policies

According to economists Orrenius and Zavodny, there are several fundamental differences between the Canadian and American immigration policies. First, while Canada’s immigration system is focused largely on the needs of Canada’s labor markets, the U.S. system responds mostly to the needs of families. As Orrenius notes, “[Canada’s] employment-based immigration policy can more closely serve the national interest and Canada’s economic needs than a family-based system — which is the U.S. model — which mostly benefits those immigrants who came to the U.S. before” by enabling them to reunite with their relatives. As a result, Canada’s stream of immigrants is much less likely to compete with current job-holders, and thus be perceived as threatening by them.

Fifty-four percent of Canadians said they placed a higher level of importance on Canada’s official policy of “multiculturalism” than on such national symbols as hockey (39%) and the Queen (21%).

Second, say Orrenius and Zavodny, Canada’s immigration policy is more responsive and nimble than that of the United States, since the Canadian system focuses on the needs of the labor market, using the latest data to assess where policy changes are required. “Where they see a problem, they address it quickly, and they move on,” says Orrenius. “Whereas in the United States, we’ve had the same policy for 50-plus years, Canada’s policy is very much responsive to changes, not only that happen in Canada, but changes in potential immigrants.” She adds, “We’ve been told by political scientists that this is probably because the parliamentary form of government makes it much easier for Canada to be responsive” than American legislative institutions.

Third, say Orrenius and Zavodny, there are still vast areas of undeveloped land in Canada where new immigrants can create their communities — often while having little contact with the mainstream of other ethnicities — without being viewed as a threat.

Fourth, unlike the U.S., which borders on Mexico and is directly accessible from the Caribbean, Canada does not share a border with any “developing” nations. Thus, Canada is not subject to significant migrations of “undocumented” or illegal migrants from such countries. On the other hand, notes Zavodny, “For a lot of employers, and for a lot of families, and even individuals, it is to their advantage economically to have a large influx of low-skilled, low-cost labor…. Canada has the advantage of geography. It is only bordering the United States, and not that many people are clamoring to move from the United States to Canada.”

Fifth, unlike the U.S., which celebrates the eventual assimilation of future generations into the mainstream culture, an essential part of the Canadian creed is a bilingual system that is multicultural. Notes Ray Marshall, professor emeritus of economics and public affairs at the University of Texas and former Secretary of Labor under President Jimmy Carter, “Canadians believe that if you say to an immigrant, ‘You’ve got to forget all about the values that your ancestors had, and your identity with your ancestral country, and you’ve got to take our values and give up your values,’ then you’re going to have trouble…. [For Canadians,] immigration is always a two-way street.”

Finally, a major factor has been Canada’s long experience of accommodating the needs of the Francophone population of Quebec. “One of the reasons that the Canadians developed a pretty good multicultural system is that they had to work out first a bicultural system in order to hold Canada together,” notes Marshall. “The Quebecois wanted to separate from Canada during the 1960s to form a separate nation that would break up Canada. So [the other provinces of Canada] worked out an accommodation with the Quebecois, and accepted that ‘we will be a bilingual and bicultural country.’ Then, the other ethnic groups [in Canada] such as Greeks and Jewish people said, ‘What about us? We didn’t come from France or England.’ And so the Canadians, in their usual deliberate way, said, ‘Let’s think about that’ — and that’s how they came up with multiculturalism.”

“Whereas in the United States, we’ve had the same policy for fifty-plus years, Canada’s policy is very much responsive to changes.”–Pia Orrenius

The Importance of Planning

More fundamentally, Marshall stresses significant cultural contrasts between Canada and the U.S. Nowadays, the U.S. and Canada are “pretty interdependent, but our values and attitudes about government are very different. Thomas Jefferson believed in life, liberty and the pursuit of happiness, but the Canadian founders believed in peace, order and good government.” To Canadians, “Good government means active government,” says Marshall. “Their fight about government is not about its size. They consider [size] to be irrelevant; they would never say, as Ronald Reagan said, that ‘government is the problem,’ and that ‘the government is too big and we need to shrink it.’ The Canadian attitude is that we ought to be fighting about the competence of government, not about its size. They believe that the thing that makes for a good economy is that the private sector does what it does best, and let the government do what only it can do.”

For Canadian policy makers, argues Marshall, ‘good government’ involves “cooperation between the public and private sectors on some kinds of things that are important to both. The Canadians believe, he adds, that education is one of its important roles. “Americans used to believe that. That’s one of the reasons that until the 1980s, the U.S., with public-private cooperation, built up what was generally regarded as the best education [system] in the world. Nobody would say that about the United States today.”

How does this contrast impact Canadian immigration policy? According to Marshall, “First, Canadians believe in strategic planning for their economy, and we don’t. We believed, particularly in the 1980s and after Reagan, that strategic planning was socialistic and that you couldn’t pick winners and losers — that you couldn’t have an industrial policy, and therefore we paid a lot more attention to laissez-faire.” In contrast, Canada “put together a strategic plan for how to deal with globalization. Their belief was that to be able to compete in a global era with its high emphasis on equality and productivity, you could concentrate on competing with wages or you could compete mainly with productivity and quality.” Canada opted for the high-value-added strategy, which meant it needed to “put heavy emphasis on improving its education system. As a result, it now ranks much higher than [the U.S.] in international assessments.” That helps explain why, in the 2015 OECD worldwide rankings for highest science and math scores among 15-year old students, Canada ranked tenth, while the United States ranked 28th.

To support their high-value strategy, Canadian policy makers “put a heavy emphasis on revamping their immigration system. First, they switched from a family-based immigration system, primarily — which is what we still have in the U.S. In a family-based immigration system, you have very limited control of immigration. You don’t know anything about the quality of the people that the families are going to recruit. The Canadians went mainly to an economic basis for immigration, where 60% or 70% of their immigrants come for economic purposes,” supporting their system mainly by “filling vacancies that are measured and demonstrated in the Canadian economy.”

According to Marshall, the Canadian government believes “that you need to have a strategic plan for immigration; that immigration ought to reinforce your overall plan. So they pay a lot more attention to coordinating their immigration policy with their economic and social policy. They do that because if you don’t do that, you’ll let immigration policy substitute for education policy. It is a lot easier [for employers] to recruit people who have already been trained than it is to train them by yourself” in your schools. In the U.S., “our employers and governments have allowed immigration to substitute for training doctors, nurses, lawyers, scientists — and for having a well-educated, well-trained workforce. The Canadians have not done that.”

Nor have Australia and New Zealand, which follow the same approach as Canada. Among those countries that have such an approach, “the Canadian system is the gold standard for managing immigration,” argues Marshall. “It is fact-based, data-based — and therefore, they have rules that you only import foreign workers to fill positions which cannot be filled by Canadians. They haven’t always observed that very carefully, but they’ve tried to.” Marshall says that it is important to recognize the mechanisms that the Canadians have developed in order to manage their system effectively. “They invented the point system for the selection of immigrants, and it has evolved. I am a strong believer in it, because it gives you much greater transparency — and efficiency.”

“The Canadian system is the gold standard for managing immigration.”–Ray Marshall

It works this way: First, employers figure out what kinds of workers they need, and they post that information online. Marshall explains: “If you want to go to Canada, you can go online and find out what they are looking for. And then you can calculate your points and see if you qualify for it. If you do qualify, you can file an ‘expression of interest.’ They rank the applications they get on the basis of the point system. They invite the people with the highest scores to apply to come to fill one of those positions…. You can do all of that online, very fast. If you have a legitimate job offer for a position that Canada says it needs to fill, then you get more points…. The upshot is that Canada protects the public interest very well by not allowing people to come in who compete with Canadian workers.”

He argues that “the economic interest in this is very clear; if you bring in foreign workers to compete with domestic workers, then you cause trouble. Some people benefit and some people lose. But if you bring in people who complement your workforce, everybody gains.”

Kent Smetters, a Wharton business economics and public policy professor, notes that as a result of the point system, “a lot of medical professionals, in particular, have come to Canada, filling important gaps.” As a result, “I am not surprised that native-born Canadians do not see that as controversial.” In contrast, adds Smetters, “The U.S. system emphasizes family coherence, primarily, and employment needs secondarily. Only about 35% of the 800,000 legal immigrants to the U.S. each year have a college degree or higher. College educated immigrants are probably less controversial, although I have not seen polling data supporting that point.”

However, when it comes to mechanisms for work-related immigration, Smetters argues that “it is unclear whether the Canadian point-based system or the U.S. employer-based system is better. If employers face low search costs for talent, then an employer-based system is most efficient since they are incentivized to understand their needs; otherwise, using a point system can make sense. Since search costs are coming down over time with the rise of job-matching platforms, the current U.S. employer-based system is probably more efficient.”

“It is unclear whether the Canadian point-based system or the U.S. employer-based system is better.”–Kent Smetters

The Advantages of Transparency

Despite the cultural divergences between Canada and the U.S., there are some lessons that can be applied in the U.S. and elsewhere, argues Marshall. First, create transparent rules and practices if you want to build public support. “Transparency has very important political as well as economic advantages. The political advantage is that if you have a highly transparent system that seems to be fair to everybody, and seems to be well-managed, you will get very little public backlash against your immigration policy…. You’d never get the backlash in Canada we’re getting here [in the U.S.]. Here, you are getting all sorts of false ideas and demagoguery about immigration, because our system is not transparent and not well-managed, and the government does not seem to be in control of the immigration process. Indeed, it has not been in control. In Canadian system, there has been much less backlash.”

Second, focus on the long term impact of your immigration system. “It’s not just important which people you select [as immigrants] but how well those people integrate into your society and your polity for the long run. Most countries make a huge mistake of just paying attention to the selection of people up front. If you really want to have a good immigration system, you take the long view. If you do that well, you get social stability.”

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