One almost cannot open a news site without hearing about Syrian refugees; how we should hate them, how they’re going to take money away from the citizenry, how somehow ISIS and Islam are the same thing (All ISIS members are Muslim, but are all Muslims members of ISIS?). On the taking money away from Citizenry however, the numbers don’t hate; and at least for Canada, the idea that the citizenry will somehow be economically worse off just isn’t true.
There’s already a lot of sociology that rebukes the claims of hate, diaspora, and citizenship, but there’s not a lot of data on the claims that refugees somehow make society worse off economically; except for Canada, where we can extract some idea in comparison to other spending.
Last year, before the new Liberal government in Canada, the former Conservative government cut $10 Million from the Canadian Immigration budget for refugees. The new Liberal government has promised to restore that funding, essentially giving us a $10 Million reference point.
Canada’s economy is about $1.3 Trillion (GDP). So the $10 Million for refugees equates to about 0.076% of GDP. So will Canada run out of money over this? That is, other than a country with its own currency, like Canada, can never truly run out of money (more on that in a minute)? Will Canadians be worse off economically for spending 0.076% of GDP on refugees? Let’s compare:
- The Canada Pension Plan (Canadian Social Security) currently has $264.6 Billion in assets: 20.3% of GDP
- Only $3.1 Billion was actually spent on pensioners (PDF), leaving a $261.5 Billion surplus; or a 20% of GDP slush fund.
- $219.4 Billion was spent on Canadian Healthcare (PDF): 16.8% of GDP
- $16 Billion was spent on the F35 project that never actually produced a single airplane: 1.2% of GDP
So outside of the fact that there is no shortage of money to spend an extra $10 Million of refugees, let’s assume for a minute that there was.
Countries with their own currency can never truly run out of money. The European Union (for example) is a group of countries with a common currency. This is why some countries ran out of Euros while others didn’t (for various reasons) after 2008. Countries like the United States and Japan, started the printing presses for money – mostly by printing new government bonds for financial markets. Yes, the Yen and the Dollar were devalued for a while, but devaluation only happens in relation to other currencies; it usually doesn’t make the citizenry worse off (other than exploding unemployment levels). In fact, in QE countries at the zero lower bound, inflation is nearly nonexistent – making the costs of domestically produced goods & services no that expensive.
Canada hasn’t exactly been anxious to start the presses with its own money, which leaves them lots of wiggle room on monetary policy, even though Canada is flirting with the zero lower bound on interest rates.
Even if Canada didn’t want to start the presses, they have the lowest debt-to GDP in the G7 – significantly lower than France, who debt-finances almost everything . Canada could always debt-finance the .0076% of GDP for refugees and STILL hold the title of lowest debt-to-GDP nation.
Since there’s no shortage of cash for refugees to begin with, added to debt-financing wouldn’t hurt anything, added to Canada is a long way from starting the money presses, the idea that Canadians will somehow be worse off economically for accepting refugees just doesn’t hold up to the smell test.