By Don Cayo, Vancouver Sun | Link to Article
Entrepreneurial immigrants in other provinces play a big role in driving the growth of Canadian exports to destinations other than the U.S., yet B.C.’s newcomers tend to punch below their weight.
By Don Cayo, Vancouver Sun | Link to Article
Entrepreneurial immigrants in other provinces play a big role in driving the growth of Canadian exports to destinations other than the U.S., yet B.C.’s newcomers tend to punch below their weight.
This is an intriguing finding of a just-released study by the Conference Board of Canada. It notes that, ranked by number, Ontario, British Columbia and Quebec get the lion’s share of immigrants to Canada, but the resulting formation of export-oriented businesses is far lower here.
Specifically, Ontario gets 55 per cent of Canada’s immigrants and accounts for about a third of immigrant-owned companies that export to countries other than the U.S. Quebec, with just under 14 per cent of immigrants, accounts for 40 per cent of such export-oriented companies. And B.C. gets just over 18 per cent of all immigrants, yet their companies account for only about five per cent of these firms.
Why are B.C.’s numbers so low?
The answer can’t be found in the data, but Horatio Morgan, an assistant professor of global management studies at Ryerson University and an author of the study, offered some ideas in an interview.
“It’s something I’ve looked at very hard,” said Morgan, an immigrant from Jamaica who spent six years in Vancouver before moving to Toronto.
One positive reason he postulates is that entrepreneurial immigrants, who tend to live in enclaves with others of the same nationality when they move to Metro Vancouver, have found it reasonably easy to launch businesses that focus on the domestic market. So they don’t need to pursue sales abroad.
As well, Ontario and Quebec attract more immigrants who are in their 20s or 30s, and often tech savvy, whereas those who come to B.C. tend to be both older and better off. As a result, many of them are — as Vancouverites often deplore or applaud, depending on whether they’re buying a home or selling — more inclined to put their money into what they see as rock-solid real estate investments rather than risky start-ups.
So the case can be made that, compared to those in other parts of Canada, B.C.’s immigrants play less of a role in driving job creation, and more of a role in driving up house prices.
Of course the study found, as expected, that immigrants have an advantage in tapping into non-U.S. export markets because they arrive with both knowledge of and contacts in foreign markets. And even though B.C. gets less than its proportionate share of these kinds of businesses, there are still enough to make an economic impact.
The Conference Board researchers found a curious mix of strengths and weaknesses when they looked at these kinds of businesses in some detail.
The most successful ones tend to be tech-oriented, and — like most export-oriented companies with Canadian-born owners — they are likely to compete in the rich U.S. market rather than in their owner’s country of origin.
But the majority of immigrant-owned export businesses are in wholesale/retail trade, and while their growth rate is quite a bit higher than other Canadian businesses, their return on assets is significantly lower.