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Liberal promise of immigrant tax credit is a divisive issue

Most Ontario residents are already aware of the recent controversy that has brought immigration to the forefront of the upcoming provincial election. It started with the Ontario Liberal pledge to offer tax credits of up to $10,000.00 to employers that hire new immigrants in Ontario who have been here for five years or less. Ontario Progressive Conservative leader Tim Hudak responded by calling it an “affirmative action” program, repeatedly stating that “foreign workers” would be taking jobs from Ontarians. The Ontario Progressive Conservative Party even released this video on YouTube, which claims that the Liberals will give away $10,000.00, but only to “foreign workers.”

The program is expected to cost $12 Million to implement. Although this is hardly a partry sum, it is a drop in the bucket compared to many other programs being scrutinized during the election. Of course, immigration has always been a sensitive issue. The offer of tax incentives to encourage the employment of one group, presumably to the disadvantage of another group, at a time of high unemployment was destined to stir up emotions. Critics of the Progressive Conservatives called them racist and critics of the Liberals claimed that they had sold out “regular Ontarians” to court the immigrant vote.

I should mention that Tim Hudak’s reference to “foreign workers” was a bit misleading. Tax incentives would not be given to employers who hired foreign nationals holding temporary work permits; they would instead be given to employers that hired recent immigrants who are now permanent residents of the Canada, with the same right to work as everyone else. Tax incentives would also not be given to employers that hired non-Canadians who had already been in Ontario for more than five years; so the potentially disadvantaged group in this scenario would include more than just Canadian citizens.

It is true that new immigrants suffer from higher unemployment rates than those who have been in Canada for more than five years. It is also probably true that this is the result of systemic discrimination in the Ontario labor market, which may favor workers with Canadian credentials and/or work experience. The harder question is what should be done to address this inequality.

The controversy raised during the election bears a striking similarity to the affirmative action debate that took place in the United States, when such programs were first adopted in the 60s and 70s. Affirmative action programs were intended to address the unfair treatment of women and minorities at the time. It is true that these programs did result in significant gains for both groups. However, critics alleged that giving preferential treatment based on race or gender was inherently unfair, since it required hiring decisions to be made (at least in part) on the basis of race or gender, rather than qualifications. It was also alleged that affirmative action harmed minorities and women by stigmatizing them and devaluing their accomplishments.

In the present debate, the Liberals claim that new immigrants are disadvantaged and that a tax incentive must be offered to employers in order to give them the same opportunities as other workers. The Progressive Conservatives claim that this is preferential treatment and it puts anyone not entitled to the tax incentive in a disadvantaged position. Tim Hudak even made reference to his immigrant grandparents who came to Canada not speaking the language and not expecting special treatment, implying that new immigrants did not want this preferential treatment.

There is probably no right or wrong answer to this issue. The reason why the same debate continues in different incarnations is that there is some merit to the arguments presented by both sides. Something must be done to address inequality but the solution should not unfairly favour one group over another either. Unfortunately, this is easier said than done.

In the end, Ontario voters will ultimately decide whether the Liberal tax incentive program corrects an inequality or creates one.

Henry J. Chang
Blaney McMurtry LLP

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Henry J. Chang

Corporate immigration lawyer at Blaney McMurtry LLP
Henry J. Chang is a partner in the business immigration group of Blaney McMurtry LLP. A recognized authority in the field of United States and Canadian immigration law, Mr. Chang lectures extensively on the subject in both the United States and Canada. His written works have appeared in numerous nationally and internationally recognized legal publications, including Immigration Law and Procedure, which has been cited in over 300 federal court decisions. Read more
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