Role of Provincial Migration and Immigration in Provincial Trade of Canada

Abstract

This study estimates international and provincial migrants’ impact on provincial-level trade using panel data from 1981 to 2016 for Canadian provinces. The estimated results show that migration plays a significant role in determining Canadian provincial-level trade. Although the stock of provincial migrants is smaller than the stock of immigrants in Canadian provinces, the former plays a consistently positive and significant role in provincial-level trade, while the latter is not consistently significant across estimators. This study reaffirms that labour mobility between Canadian provinces helps reduce provincial trade barriers and promote economic development within Canada. Our results are robust to different estimation methods, model specifications, and alternative measures of migrants’ stock in Canadian provinces.

Recent vs Historical Migrants: A Study on the Canadian Provincial Trade-Migration Nexus

“…Canadian interprovincial migration has been higher than net immigration (see Figure 1). Over the past 35 years , on average, approximately 294 thousand Canadians moved between provinces every year which is much greater than Canadian average annual immigration (212 thousand foreign immigrants) (see, Aziz et al, 2023;Aziz & Mahar, 2019). The number of interprovincial migrants in each province is much higher if we consider the stock of interprovincial migrants (see, APPENDIX B).…”

“…Figure 3 shows interprovincial export and import of Canadian provinces. The trade openness data show that international trade openness in Canada is much higher (international trade and GDP ratio is 66 percent) than interprovincial trade openness (interprovincial trade and interprovincial GDP ratio is about 21 percent) (Aziz et al, 2023;Aziz & Mahar, 2019). In 2017, the Federal and Provincial governments of Canada signed the Canadian Free Trade, and Commerce (2016) predicts that the elimination of internal trade barriers would increase Canada's GDP ranging between 0.05% and 7.0% (Tkachuk and Day 2016).…”