{"id":1170,"date":"2014-06-23T12:26:35","date_gmt":"2014-06-23T16:26:35","guid":{"rendered":"https:\/\/acorncanada.org\/toronto-star-24b-left-canada-2012-heres-what-happened-it\/"},"modified":"2014-06-23T12:26:35","modified_gmt":"2014-06-23T16:26:35","slug":"toronto-star-24b-left-canada-2012-heres-what-happened-it","status":"publish","type":"news","link":"https:\/\/acorncanada.org\/news\/toronto-star-24b-left-canada-2012-heres-what-happened-it\/","title":{"rendered":"Toronto Star: $24B left Canada in 2012. Here\u2019s what happened to it"},"content":{"rendered":"

People working in Canada send billions to their home countries each year, an ordinary-sounding task that has far-reaching effects. This Star series explores where the money goes and what it means \u2014 both to those who receive it and those who give it.<\/p>\n

Posted June 23, 2014<\/em><\/p>\n

\"\"The money sent overseas each year by people living in Canada could buy about 70 jumbo jets, mountains of sparkling engagement rings, or more than a third of Starbucks Corporation, depending on the day: $24 billion goes a long way.<\/div>\n
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According to the World Bank , that\u2019s how much ordinary people living and working here sent to their home countries in 2012: The money may go to a grandmother in Beijing, a niece in Kingston or a cousin in Jaipur.<\/div>\n
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It might be for groceries, the electric bill or school fees; or it could be meant to celebrate a birthday, an anniversary or a wedding. It may be earmarked to repay a debt or help start a business. Most aren\u2019t sending much money at any one time: $200 is an average sum.<\/div>\n
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So Sheryl Jacosalem is both typical and extraordinary.<\/div>\n
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She came to Canada from the Philippines \u2014 via Hong Kong \u2014 in 2009 and worked for more than three years as a nanny in Thornhill. Every payday, she would send at least half of her earnings, sometimes more, home to her family.<\/div>\n
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It was about $500 on the 15th of every month; if she could, and it was needed, she would send a bit more at the end. That money put four sisters and a brother through school, and now \u2014 three of her sisters have joined her here in Canada \u2014 the family is putting the finishing touches on a house they have built for their parents in Iloilo.<\/div>\n
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\u201cWe grew up with nothing, and so we want them … we don\u2019t want to worry,\u201d Jacosalem, 36, says. \u201cWe just don\u2019t want to worry that we\u2019re here in Canada and we don\u2019t know what\u2019s going on with them there. We want them safe and we want to make sure they are always OK.\u201d<\/div>\n
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Remittance Canada and world map<\/a><\/div>\n
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Jacosalem and her sisters are emblematic of the many people living and working in Canada who regularly send money to their home country: It\u2019s an ordinary-sounding task, which has remarkable, far-reaching effects.<\/div>\n
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Money doesn\u2019t just make the world go \u2019round \u2014 money also goes around the world. In 2012, the most recent year for which figures are available, nearly $530 billion (U.S.) was sent globally by migrants to their home country. Projections are that remittances \u2014 which is what money or assets sent overseas are called \u2014 like migration, will continue to rise.<\/div>\n
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The numbers could be even higher than the World Bank figures show: according to Pew Research , a non-partisan think-tank, \u201cif unofficial remittances were counted, the total could be as much as 50 per cent higher or more\u201d \u2014 another $265 billion.<\/div>\n
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Because many countries don\u2019t track remittances \u2014 either sent or received \u2014 the World Bank figures are an estimate, determined through a statistical model using data it can collect. (Here, no federal bodies, including the Bank of Canada, Department of Finance, Department of Foreign Affairs, International Trade and Development, Citizenship and Immigration Canada, or the Financial Transactions and Reports Analysis Centre of Canada say they hold information on remittances.)<\/div>\n
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Unofficial remittances are money transfers through unrecorded channels, such as the hawala system, in which moneylenders in places like Pakistan, North Africa and the Middle East, working outside the banking system, facilitate international transactions.<\/div>\n
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\u201cThe numbers are staggering, because there are so many migrants out there that the small amounts sent add up to large volumes, like $500 billion,\u201d says Dilip Ratha , the World Bank\u2019s lead economist on remittances. \u201cThere is an extremely human emotion behind remittances, unlike foreign aid and investment, where there are strategy considerations, where there are investment considerations.<\/div>\n
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\u201cThis one is really more about helping family,\u201d he says. \u201cSo it is like helping yourself.\u201d<\/div>\n
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Canada sends more money, per capita, overseas than other developed countries. (The U.S. is the largest remitter by far, sending nearly a quarter of that global $500 billion: Mexico is their top recipient country, with $22.8 billion, followed by China, which receives about half that.)<\/div>\n
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For Canada \u2014 where, according to Statistics Canada, nearly seven million people living here were born elsewhere \u2014 most of the countries that receive remittances aren\u2019t surprising: China. India. The Philippines, where Jacosalem and her sisters send money and packages. But millions of dollars also flow from Canada to European countries, like the United Kingdom, Germany, France and Italy.<\/div>\n
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For some nations, remittances help keep the country afloat. A 2012 United Nations report says that over the last decade, remittances have \u201csteadily surpassed\u201d foreign direct investment in the world\u2019s least developed countries.<\/div>\n
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In the Philippines, for example, where 10 per cent of the country\u2019s 100 million citizens have left to find work abroad, remittance cash has been used for improvements to roads, schools and hospitals, and has connected cities to the water and electrical grids.<\/div>\n
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In Pozorrubio, an agricultural city north of Manila, remittance money has had a multiplier effect. Residents have used remittances to start businesses like daycares, Internet cafes and car rental services. Donations from abroad have helped to finance a rural health centre and have paid for the city\u2019s fire truck.<\/div>\n
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Remittances have been Somalia\u2019s lifeline since the government collapsed in 1991. With almost one-tenth of the country\u2019s citizens living abroad, and no official banking system within Somalia, money sent home by relatives has been vital for basic needs such as food and clothing.<\/div>\n
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Now, that money is helping to fund a construction boom, and as the security situation improves \u2014 despite threats from Al Qaeda-linked Al Shabab \u2014 Somalia\u2019s vast diaspora is following their money back home, to start new businesses or work within the government.<\/div>\n
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It\u2019s not just faraway countries that benefit from remittances. In the Caribbean, according to a Bank of Jamaica report , tourism accounted for only slightly more than remittances to the country in 2012 \u2014 $2.069 billion vs. $2.042 billion. The World Bank figures say $305 million of that came from Canada.<\/div>\n
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The positive effects of remittances on the people and countries receiving them are clear, but the question persists: Would it not be better for Canada if the $24 billion were to stay here? One major bank economist says the figure is relatively small compared to Canada\u2019s total economy of about $1.7 trillion \u2014 and Ratha, of the World Bank, points out that Canada is getting something of considerable value back.<\/div>\n
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\u201cYou can ask, are remittances a net drain on the host economy?\u201d Ratha says, and then answers the question. \u201cRemittances are not a drain on the host country because the migrant has already earned that money. The migrant has done work to earn that money.<\/div>\n
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\u201cIt is not charity that he or she has received \u2014 it is payment in exchange for work,\u201d he says, noting the migrant also pays taxes in Canada. \u201cAfter you work and you get paid, it is up to you whether you use the money in Canada, or send money to the Philippines, or buy a house, or blow it in a casino.\u201d<\/div>\n
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Remittances look different depending on both where they are sent from, and where they are sent. Bangladesh, for example, receives most of its remittances from migrant workers in places like India, Saudi Arabia, Kuwait and Oman. A 2009 World Bank report said 64 per cent of remittances came from migrant workers, rather than members of the diaspora.<\/div>\n
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Some countries don\u2019t allow migrants to hold bank accounts or invest in property in the country in which they are working, so they have no way to keep their money safe and must send their earnings home.<\/div>\n
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That can be an expensive proposition. In Canada, groups like ACORN \u2014 which advocates for low- and moderate-income families \u2014 have campaigned against what they say are \u201cexorbitant\u201d fees to send money abroad. After the 2009 G8 conference in L\u2019Aquila, Italy, world leaders called for the same: \u201cto cut the commission on remittances made by immigrants to their native countries by 50 per cent, from the current 10 per cent to 5 per cent, over 5 years.\u201d<\/div>\n
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\u201cWhen you look at the whole picture, that extra $15 that you pay, or that extra $20 that you pay \u2014 or, if you go to the bank, that extra $40 that you pay \u2014 that could be helping with your transportation costs. That could be buying something extra healthy in your groceries,\u201d says Marva Burnett, who came to Canada from St. Vincent and volunteers with ACORN. \u201cIt\u2019s unnecessary. Even if they reduce it to 5 per cent, they\u2019re still making a huge profit.\u201d<\/div>\n
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Migration to Canada is different than somewhere like the Emirates, both because of the migrants who arrive here \u2014 the immigration points system discourages entry by low-skilled workers \u2014 and because of the hope by many that a home could be found here.<\/div>\n
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Jacosalem and her sisters, for example, ultimately chose Canada because it offers the possibility of permanent residency. And that means how, and how much, many migrants to Canada remit changes over time.<\/div>\n
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Most migrants send a higher percentage of their income to their home country when they first arrive. That tends to decline the longer they stay, because migrants are building a life in their new countries and need to earmark funds for their children\u2019s schooling, or a mortgage or to start their own businesses.<\/div>\n
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\u201cWhen people come in with a mindset to stay in Canada, they would send money home of course in the beginning, but there is a fairly rapid remittance decay over the years,\u201d says Ratha of the World Bank. \u201cIncreasingly, they would remit a lower percentage of their incomes \u2014 not the dollar amount, mind you, it is a lower percentage of income, because income is rising \u2014 and they would save an increasing amount for themselves in Canada, for purchasing that house that they would need in future.\u201d<\/div>\n
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That was the experience of Ahsan Amed, who came from Pakistan in 1988. An only child, he left his mother and father in Lahore, eventually settling in Toronto. His parents had helped finance his journey to Canada, and he was keen to both pay them back and look after them.<\/div>\n
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\u201cThis is the cultural difference. Over there, the son has to take care of the family,\u201d Amed, now 48, and the owner of two taxis, says. \u201cAt that time, I felt like my father made the sacrifice over there to send me here, so that\u2019s why I felt it a lot at that time. But slowly, they didn\u2019t need it. In the beginning, they needed it.<\/div>\n
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\u201cBut now, it\u2019s a different story. I have three teenagers, I have a wife \u2014 my life is here now. Everything is here. My kids are born here. I have a mortgage to pay. I have expenses to pay.\u201d<\/div>\n
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Amed\u2019s mother still lives in Pakistan, and he is happy to send her money occasionally.<\/div>\n
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Some migrants will say they don\u2019t resent the obligation to send money home: they are the lucky ones, and so looking after those with fewer opportunities is their privilege.<\/div>\n
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\u201cFor me, it\u2019s given with an open heart and an open hand, but we also take into consideration that it\u2019s our responsibility because in a way, we have it better than they have it there,\u201d Burnett says. \u201cIt\u2019s from the goodness of your heart.<\/div>\n
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\u201cAnd not to plug St. Vincent, but that\u2019s just the way we are. We\u2019re kind people. And in other words, we are obligated. St. Vincent is only so big and you\u2019re obligated to help your families back home.\u201d<\/div>\n
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Burnett arrived in Canada about three decades ago, and she has interrupted her morning Bible study to chat about why she sends money home. It\u2019s the most natural thing, she says \u2014 and a question about if she\u2019s ever tempted to keep some of the cash, maybe to treat herself to something special, is greeted with a puzzled look.<\/div>\n
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\u201cIn the home countries, they\u2019re developing and they don\u2019t have as much as we do out here,\u201d Burnett says. \u201cA lot of people are unemployed, we\u2019re the ones who are working, and in the Caribbean I think it\u2019s a family thing, you know, that we help each other when we can. It\u2019s what we do.\u201d<\/div>\n
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Ratha agrees.<\/div>\n
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\u201cIs remitting a burden on the migrant? The answer is yes. Sometimes it is pleasurable, sometimes it is not,\u201d he says. \u201cUp to a point, it is actually entirely an obligation. But it is the same obligation a son in India would feel for a father, an older father who is not working anymore and has no place to go.<\/div>\n
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\u201cWhen we say it is an obligation, it\u2019s not a negative sense … it\u2019s a good obligation.\u201d<\/div>\n
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That obligation \u2014 even for migrants who have been in Canada for decades, and may no longer remit regularly \u2014 is most keenly felt when a natural disaster hits, such as the typhoon that decimated parts of the Philippines last year. Here, groups like the Toronto Filipino Centre sprang into action, sending much-needed supplies and raising funds to help \u2014 funds that are also considered remittances.<\/div>\n
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\u201cWe did big fundraising here,\u201d says Wendy Arena, a now-retired insurance professional who volunteers at the centre on Parliament St. Like other organizations across the country, they gathered supplies and medicines like antibiotics to send back home \u2014 as well as about $150,000. \u201cWe helped. We did.\u201d<\/div>\n
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Arena says it doesn\u2019t matter how long people have been away from their home country \u2014 a disaster brings everyone together. Patricia Landolt, a sociologist at the University of Toronto who specializes in migration, agrees, and says allegiance to one country doesn\u2019t prevent a person from fully being a part of a new community.<\/div>\n
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\u201cYou ask people, they\u2019ll say, \u2018Yeah. I\u2019m Canadian. I\u2019m Chilean. I\u2019m both of these things.\u2019 And that is not a difficult thing to reconcile for them,\u201d Landolt says. \u201cCollective remittances for me are really emblematic of very much belonging, because you have the capacity to move Canadian institutions to do these projects that is transnational.<\/div>\n
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\u201cThat\u2019s civic engagement in Canada,\u201d she says. \u201cIf that\u2019s not belonging, I don\u2019t know what is.\u201d<\/div>\n
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Ratha says that migration \u2014 those who remit, and those who do not \u2014 gives a country more than just the migrants\u2019 labour. It enriches Canadian society, he says, making it lusher, more interesting \u2014 and more productive.<\/div>\n
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\u201cIf you didn\u2019t have migrants, the place would be boring and cold,\u201d he says, not referring to the weather. \u201cPeople have two identities. Is that good for one identity or not? If there is a Filipino who is still connected to the Philippines because of remittances and the sense of having an identity there, and then staying in Canada and also feeling that he or she is a Canadian, is that good or bad for Canada or for the Philippines?<\/div>\n
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\u201cIt seems to me that at least on the diversity count, being connected is better.\u201d<\/div>\n
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***<\/div>\n
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Article by Jennifer Quinn for the Toronto Star<\/a><\/div>\n
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