42
observable characteristics such as drive that distinguish them from non-migrants and that
lead them to have above average productivity.32 The inclusion of intraprovincial
migration, nearly three times that of interprovincial migration, would have also greatly
increased the gains to aggregate productivity from migration.
Importantly, however, the estimated annual output gains from migration are
positive and cumulate over time. For example, the gains to nominal output from the level
effects of interprovincial migration from 1987 to 2006 cumulate to 0.75 per cent of GDP,
or over $11 billion in 20006 dollars, a significant number.33 Migration should be
recognized as a contributor to aggregate productivity growth.
3) Policies to Foster Internal Migration in Canada
Trends in interprovincial and intraprovincial migration are largely determined by
market forces. Differences in employment opportunities, as evidenced by differentials in
unemployment rates and labour compensation between provinces and regions, are the
main drivers of net internal migration in Canada. In most instances, government policies
do not directly promote migration. Indeed, it is probably accurate to say that the net effect
of government policies is to reduce migration. For example, the federal employment
insurance program, which is more generous in high unemployment than in low
unemployment regions, reduces the incentive for the unemployed to leave high
unemployment regions, although this disincentive effect may not be particularly large.34
Provincial governments, which invest heavily in the human capital of their population,
naturally prefer to see their residents find employment in the province, and establish
policies and programs to achieve this objective.
Nevertheless, from the pan-Canadian point of view of the federal government,
policies that promote interprovincial migration by reducing barriers to mobility35 foster
the national economic interests through their positive impact on output and productivity.
One current initiative that does promote interprovincial mobility is the labour market
information (LMI) programs run by Human Resources and Social Development Canada.
These programs, such as the National Job Bank and Job Futures, provide information on
job vacancies and career and employment opportunities to all Canadians.
One concrete suggestion would be the creation of an independent agency for the
development and dissemination of LMI along the lines of the Canadian Institute for
Health Information (CIHI). Both federal and provincial government play a role in the
32 On the other hand, the gains may be overestimated to the degree that the employment rate and the labour
productivity level of interprovincial out-migrants and in-migrants differs from the average of the province.
33 The cumulative gains to real GDP (1997 dollars) from interprovincial migration over the 1987-2006
period were 0.66 per cent of GDP, or $6.2 billion 1997 dollars.
34 Lin (1995) finds that receipt of unemployment insurance, on average, does not statistically significantly
increase the probability of interprovincial labour mobility, although he does note that specific aspects of the
UI system may positively affect mobility. Duclos (2007) in this volume proposes changes to EI that would
eliminate the negative effect on mobility.
35 See Gomez and Gunderson (2007) for an overview of the barriers to interprovincal labour mobility in
Canada.