03/05/2012 04:31 EST | Updated 05/05/2012 05:12 EDT

It's Immigration, Stupid

It would be refreshing to have political leaders who connected the dots. This is important because if governments don't understand the causes of their troubles, then they cannot fix them.

Which brings me to Dalton McGuinty and Jean Charest. Much ink has been spilled on the fact that they want compensation because the dollar's too high due to the fact that Alberta and Saskatchewan are exporting too much and are destroying the other province's manufacturing bases.

They also want compensation because their health care bills outpace inflation and then, in addition, want compensation for building jails after a tougher crime bill comes into effect.

Unbundling these pleas and policy prescriptions provides an insight into their lack of understanding.

Both occupy parallel universes. This is predictable among people who don't read the business pages and/or vote Liberal.

Both became premiers in 2003. That's an important factoid because that is the year the Canadian dollar was last at 62 cents and the world's commodity super-cycle began.

People in mining and energy and even on Bay Street perceived this. The cause was that the slack in the world's commodities inventories had been taken up by China and others. This meant prices would increase in tandem with their increasing growth and demand.

At that point, or a year or two later, it would have been prudent for the CEOs of large operations like Ontario and Quebec to undertake what's known as a sensitivity analysis of their operations.

These assess the impact of increasingly higher commodity prices on costs, on taxpayers, companies, tourism, the tax base, government overheads, and the negative impact on export markets.

The result would have dictated which enterprises must trim their sails, substitute, and innovate. Instead both damned the torpedoes. They were the subnational equivalent of subprime borrowers, outspending the rate of economic growth and borrowing to do so.

Now, like tapped out homeowners, they want to be bailed out by Alberta and Saskatchewan who both trimmed their sails after 2003 and have paid down debt then parked money in savings with the surpluses.

It's embarrassing and distressing that McGuinty and Charest are unable to identify valid causes and solutions.

But that aside, these two do have one valid bone to pick with Ottawa which, to be as churlish as they are, both should have complained about years ago.

It's the immigration mess that Ottawa has perpetuated since 1986. More than six million people (50 per cent to Ontario and Quebec) and their dependents have arrived here irrespective of job conditions in the country. They still come in at the rate of 250,000 or more, not including "temporary" unskilled workers and their dependents.

The burden of providing healthcare, education, and other social services for them has added more costs to their budgets than interest on their debts, the Detroit bailout, and all-day junior kindergarten in Ontario or $7-a-day daycare in Quebec combined.

Arguments that they are a net benefit, in taxes collected, fall short of the mark but, true to form, the Ontario and Quebec Premiers have never commissioned a cost-benefit analysis of these massive immigration flows. Neither has Ottawa of course.

Before 1986, immigrants were selected to fill jobs because Immigration and Manpower worked hand in glove. Since then, a quota of 250,000 was imposed and most would never have qualified to get into Canada before 1986.

High immigrant unemployment, underemployment, and low incomes have contributed as much as anything to the fact that health, education costs, and social expenditures have dramatically outpaced economic growth.

And nobody wants to talk about that.

But the facts shout. In 2010, reports revealed that 19.7 per cent of recent immigrants to Ontario were unemployed, more than the 13 per cent the year before and three times higher than the jobless rate for Canadian-born residents.

After the 2008-09 recession, a moratorium should have been imposed in Canada on all immigration and only skilled workers with jobs should have been given work permits.

But nothing changed.

In 2010, Canada admitted 118,116 who came to Ontario. In 2008, 66,634 temporary foreign workers arrived which was 3.5 times more than the 18,757 skilled worker permanent immigrants allowed in.

So Ontario and Quebec should stop badmouthing the west and demand immigration reform. That would actually be helpful in speeding up change. And it would also connect the dots.