By. Edward Gillman
North America has a long and complex relationship with Europe. Originating as colonies, Canada and the United States’ languages, cultures, and styles of government are largely imported. Although both countries have different relationships with their colonial progenitor, their peoples remain deeply committed to ideas of freedom. Much of the continent's population traces their ancestry to immigrants and refugees who fled Europe, seeking to escape old-world oppression and begin a new life. A few centuries on, the script is flipped. Europeans now enjoy one more freedom than North Americans - the free movement of people between nations.
EU citizens can travel, live, work, and study in any of the 27 member states visa-free. This right has evolved over decades, affording the bloc’s 450 million people globally unprecedented choice and mobility. Companies hire from an expanded pool of talent, while workers seek out the highest wages and best opportunities. A Finn can retire to Portugal, Slovenians work in the Netherlands, and Croatians study in Germany without special permission. Around 15.4 million people, or 3.4% of the bloc's population, live outside their home countries. If Europe, which contains dozens of sovereign nations, languages, and cultures, has achieved this feat, it’s surprising North America has not.
Canada and America should imitate the European model, offering these freedoms across both countries. The EU's success is rooted in its member states similarities, as liberal, free-market democracies. Few countries are more alike than American and Canada, sharing a common historical background, democratic norms, and cultural identity. As founding NATO members, their soldiers have fought together around the world. Decades of free trade through NAFTA (North American Free Trade Agreement) and now the USMCA have left the countries deeply interdependent; they are each other’s largest export partners. Over $2.5 billion of trade and hundreds of thousands of people cross the border daily.
Both countries would benefit from a mobility agreement. Fundamentally, citizens would gain more choice, a worthy goal in free societies. When workers move to where their skills are needed, it reduces unemployment and promotes economic growth. Moreover, the benefits aren’t one-sided: both countries have different, complementary strengths. Canada is the OECD’s most educated country: 62.7% of the working-age population holding a credential. Three-quarters speak English as a first language. Some would be attracted to America by the higher wages and lower housing costs. They wouldn’t have to travel far to reach American companies; 90 percent of Canadians live within 100 miles of the U.S. border. And America needs workers with millions of more job openings than unemployed workers to fill them. More affordable American cities in the Midwest and Sun Belt would draw Canadians looking to avoid the winter.
If America taps into a new source of high-skilled labor, what does Canada receive? While Canada has a higher rate of education, America possesses 160 million college degree holders, four times Canada’s total population. While it may seem that more workers would suppress salaries, on an economy-wide scale, the opposite is true. Less educated America boasts the highest per-capita income in the G7. This is because more workers encourages specialization; companies hire exactly who they need, enhancing productivity.
It is exactly this area, productivity, where Canada faces its great challenge. Canada is in the midst of a productivity crisis: its workers produce only 70% of the average American’s economic output per hour, less then the UK, France, and Italy. This translates into lower incomes and longer shifts: European salaries for American hours. Most alarming, the gap isn’t shrinking, but widening. Declining productivity is an especially knotty problem for countries to solve because it compounds; less profitable companies reduce R&D, hampering future performance. Accordingly, Canadian companies invest just 55 cents to the dollar of American companies. To avoid falling further behind, Canada must address the root causes of its challenges. Fundamentally, its small population size is holding it back.
The statement that Canada’s problems can be solved with more immigration might seem dubious, even laughable. Over the last few years, Canada has had one of the world's highest population growth rates, passing 3 percent. This growth is cited by many as precisely the source of the drop in productivity. While this is contested, ultimately, more people, just like more education, isn’t hurting economic growth. If that were the case, the least populous, least educated countries would be the wealthiest, and that certainly isn’t the case. Rather, recent immigrants have contributed enormously to Canada’s economy, but the positive effects have been undermined by limited investment and an extraordinary housing shortage. There isn’t a magic bullet, and larger reforms are sorely needed. But most American immigrants would be highly skilled, boosting productivity. American companies and workers have world-leading expertise in areas Canada wants to develop, including mining, entertainment, finance, and advanced technology. Greater labor force integration means greater benefits for everyone.
Despite these advantages, obstacles remain. It’s no secret pro-immigration policies cause anxiety across the political spectrum; some fear foreigners will refuse to integrate into the domestic culture. These concerns may be nowhere stronger than in Quebec. A French-speaking province surrounded by an English-speaking continent, long efforts to protect its cultural and linguistic heritage have inspired secession movements. But a labor agreement doesn’t have to apply to every Canadian province. Already within Canada, provinces regulate immigration individually, allowing for French fluency screenings. Similarly, the EU contains discretionary carve-outs for several individual states. Switzerland is part of the passport-free travel Schengen area but not the EU, while Ireland is a member of the EU, but not the Schengen zone.
Other issues remain. Increased cross-border traffic will require more resources to combat crimes like drug smuggling and human trafficking. Canada provides universal health care, while America has failed to. This creates the threat of infirm Americans flooding the border, straining Canada’s resources without paying into the system. And while these disputes, around what taxes foreigners pay, and what benefits they can draw from, are sure to be contentious, they are not new. Both countries already play host to substantial foreign populations, and Europe, with far more generous social benefit schemes than either, has managed to cope, usually with a combination of residency and minimum contribution requirements. Europe has already navigated the challenges Canada and America will face them and can serve as a guide to their resolution.
It’s reasonable to be concerned that Canadian identity could be diluted by American immigration, given that Canadians would represent only 1/9th of the combined populations. However, these concerns can be eased by looking at the EU's example, where neighboring countries with similar languages and cultures but different economies coexist. Although wages in the Netherlands are slightly higher than in Flemish-speaking Belgium, Belgians make up only a fraction of the country’s immigrants. The same is true of Germans in Australia. This indicates immigration levels will be small. 3.4% of the EU live outside their home countries; while this equates to millions of people, it’s still only as much as Canada’s population grew last year.
One country whose inclusion could prompt mass migration is Mexico. Poorer and less developed than its northern neighbors, its inclusion in USMCA is controversial, spurring minimum-wage restrictions on goods that qualify under the treaty. This makes its involvement in the freedom of movement plan a political non-starter, but just because a first iteration would exclude Mexico doesn’t mean its path is barred forever. In 1957, the original EEC members consisted of only six developed countries; Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. 67 years later, most of the continent flies the unified EU flag.
Implementing freedom of movement between the U.S. and Canada could inspire global change, repeating Europe’s unifying process across the other continents, bringing prosperity and mobility worldwide. Six decades from now, what changes could our world take? Regions maintaining unnecessary, destructive divisions are destined to fall behind. A more prosperous North America could better provide for its people and defend its interests abroad. To ensure Western society's competitiveness and offer its people the brightest future, countries should allow individuals to work where they want.
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