Posted on July 23, 2008

Nearly Half of Immigrants Remit Cash: Statscan

Tavia Grant, Globe and Mail (Toronto), July 23, 2008

About four in 10 new Canadians wired money back to family or friends, with much of the funds flowing to the Philippines and Haiti, new government data show.

Among immigrants who arrived in Canada during 2000 or 2001, 41 per cent sent money at least once in their first four years, Statistics Canada said Wednesday. Of those, the average amount was $2,500 within the first two years of landing and $2,900 within two to four years.

Wednesday’s report, one of the first to measure such economic activity in Canada, comes as remittances are booming worldwide. In countries such as Haiti, Lesotho and Jordan, they comprise almost one-third of the gross domestic product. They’re also a significant part of the economy in Jamaica, the Philippines and the Dominican Republic among others, Statscan said, citing 2004 World Bank figures.

Such money flows across borders are swelling as people leave their home countries in search of work. Global remittances—money transferred between individuals across borders—worldwide zoomed to $369-billion last year, or double the amount spent on foreign aid to developing countries.

In Canada, where one in five people are born outside the country, about $5-billion is sent in remittances a year, according to Western Union, one of the world’s largest money transfer firms.

The likelihood of immigrants wiring money to their home countries depends on three factors, Statscan said: their income, family obligations in Canada and abroad, along with demographics.

The poorer the country of origin, the more likely the newcomer is to send money home. “The incidence of remitting was highest among those from countries with lower GDP per capita,” the report said.

For example, 60 per cent of immigrants from the Philippines and Haiti sent remittances two to four years after landing. Roughly half of newcomers from Jamaica, Nigeria, Romania, Guyana and Ukraine sent money. Less than 10 per cent, however, of immigrants from industrialized countries such as France, the United Kingdom and South Korea did so.

More than half of immigrants from Southeast Asia and the Caribbean and Guyana sent remittances home two to four years after landing, while about 40 per cent of those from sub-Saharan Africa and Eastern Europe did so.

Immigrants from East Asia sent, on average, $3,900 back home within two to four years after landing while immigrants from the Caribbean and Guyana sent $1,600.

Economic immigrants tend to send more money to their home countries than family class immigrants and refugees, the report said.