Immigrants, Ethnic Economy and Integration: Case Study of Chinese in the Greater Toronto Area

This research project was jointly conducted by Dr. Lucia Lo of York University and Dr. Shuguang Wang of Ryerson Polytechnic University.

The research was designed with four specific objectives in mind: (i) to delineate the spatial distribution of Chinese immigrants in the Greater Toronto Area (GTA), (ii) to identify their economic activity patterns, (iii) to examine the structure of their businesses, and (iv) to measure their monetary contribution to the larger Canadian economy. These tasks were accomplished by accessing three most recent data sources available at the start of the project: (i) the 1991 census data on the settlement and economic activity patterns of the Chinese in the GTA, (ii) the 1997 Dun and Bradstreet Regional Business Directory on Toronto’s Chinese-owned businesses, and (ii) the IMDB data on landing records of Toronto’s Chinese immigrants who landed in Canada between 1980 and 1995 and their tax records in 1995. Dr. Lo was responsible for executing the first three tasks. Dr. Wang oversaw the fourth one.

The research was complemented by two Graduate Assistant Matching Funds from York University and an Ontario Work-Study Plan Assistantship from Ryerson Polytechnic University. This enabled a group of six student and community assistants working in different parts of the project. Dr. Xiaofeng Liu, a postdoctoral fellow who left the research team for private sector employment midway through the project analysed the 1991 Census data on economic activities. Mr. Chi Shen, a doctoral student pursuing a thesis on immigrant settlement at York University, mapped the settlement patterns of various Chinese subgroups and the spatial distribution of Chinese businesses. Ms. Hui, a former Immigration Officer of the former British Colony of Hong Kong familiar with the spelling of Asian last names, went through the Dun & Bradstreet Business Directory to identify Chinese-owned businesses. Miss Phuong, an undergraduate student at York, made telephone calls to clean up the Chinese business dataset prepared by Ms. Hui. Mr. Andy Charles and Miss Winnie Chow, undergraduate students at Ryerson, helped to analyse the IMDB data. The research assistantships offered them training in the use of various databases, statistical (SAS, SPSS) and geographical information system (ArcView) software as well as analytical and communication skills.

The community partners, Ming Pao Newspapers (Canada) Ltd., Richmond Hill & Markham Chinese Business Association, and Canada Mainland Chinese Affairs Committee, have been very supportive and provided information which would be very useful to the next phase of this project.

Since the early 1980s, the Chinese has become the fastest growing ethnic group in Canada, due primarily to accelerated immigration. The rapid increase in Chinese population brings about a proliferation of Chinese-owned businesses, many of which form visible commercial clusters outside of the traditional Chinatown area, greatly transforming the suburban landscapes of major Canadian metropolises. Such rapid expansion of ethnic settlement and ethnic enterprises has generated unprecedented impacts on community development and social life and raised concerns that increased presence and increased completeness of ethnic businesses would reduce the need and desire of immigrants to integrate with the mainstream society.

Given the lengthy history of Chinese emigration, the extent of the Chinese Diaspora, and recent changes in geo-politics and the global economy, the Chinese in Canada present a particularly interesting case in settlement/integration studies. The purpose of this study is to understand the dynamics of the new Chinese economy, to assess Chinese immigrants’ contribution to the larger economy, and to examine implications on immigrant integration.

The GTA was chosen as a case study for two reasons. First, 40% of Canada’s Chinese live there. Of the 319195 people of Chinese ethnicity who reported residing in the GTA in 1996, over 80% were immigrants. Second, unlike other Canadian metropolises, the Chinese immigrants in the GTA came from different source countries, forming a culturally, socially and economically heterogeneous group. As differences in characteristics and experiences affect immigrants’ mode of incorporation in the host society, Toronto offers a rich context for studying this. This study investigates, wherever possible, the particular role played by subethnicity in both economic and social integration. The following four sections highlight the main findings on settlement patterns, economic activity patterns, business structure and economic impacts of Chinese immigrants.

The data for this analysis cover all permanent residents of the GTA reporting Chinese as the only ethnic origin in the 1991 Canadian census. In 1991, Chinese made up 5.5% of the total GTA population of 4.13 millions, and 79.7% of them were immigrants. The general pattern of settlement was 26% in the core area, 46% in the inner suburbs, and 26% in the outer suburbs. While Scarborough, Toronto and North York respectively held 28%, 22% and 16% of GTA’S Chinese population, Markham, Richmond Hill, and Mississauga were emerging as important centres of Chinese settlement.

Evidence indicates that (i) the Chinese population in the GTA has substantially decentralized; (ii) the decentralization has occurred in multiple directions; (iii) new ethnic suburban concentrations are much more expansive than their downtown counterparts; and (iv) the old ethnic enclaves in the core are still thriving. To understand this phenomenon, Chinese immigrants were disaggregated into subgroups by their place of birth and period of landing. This study focuses on the four spatial subgroups respectively born in Mainland China (30%), Hong Kong (40%), Taiwan (4%) and Vietnam (10%), and three temporal subgroups corresponding to major changes in immigration policies in Canada and in the political and economic structures of major Chinese-sending areas: prior to 1968 (6%), 1968 to 1984 (48%), and 1985 to 1991 (46%)

The spatial analysis of Chinese settlement shows no apparent concentration of the subgroup born outside Mainland, Hong Kong, Taiwan and Vietnam, reflecting the mixed nature of this subgroup. The most concentrated settlements of the four target subgroups are all geo-graphically separate. There is also a spatial dichotomy in residential concentration between those born in Mainland China and Vietnam, and those born in Hong Kong and Taiwan, the former in the old urban core and the latter in the suburbs. Finally, the spatial concentrations of the newer Chinese subgroups from Vietnam and Taiwan exhibit a more diffused pattern than those of Hong Kong and Mainland China.

The temporal analysis shows that Chinese immigrants arriving in the 1968-85 and 1985-91 periods have similar patterns of settlement relatively distant from those who arrived before 1968. This earlier group concentrates more in the old downtown core although outward movement of this group has taken place, indicating upward mobility and spatial assimilation. Immigrants arriving after 1967 settle either in the traditional reception area or in the suburbs.

The overall settlement pattern of Chinese immigrants in the GTA is one of both convergence and divergence. Similar cultural roots bind Chinese immigrants from different origins to the same general residential locations; differential levels of development at source regions and varying social and political conditions propelling migration cause subethnic variations in patterns of concentration. The results suggest that immigrant settlement and resettlement occur along class lines and the residential invasion-succession process is not just an inter-ethnic or inter-temporal phenomenon, but also an intra-ethnic happening.

Compared to their non-Chinese counterparts, the Chinese in Toronto are younger, more educated and more skilled. However, on average, in 1991, they made only 80% of the income earned by their counterparts. This difference is true across all classes of age, education, worker status, occupation and industry. The picture is generally the same when age, gender and education were simultaneously controlled; Chinese performed better only in a handful of the occupation, industry and worker status categories, for example, younger female Chinese immigrants with a post-secondary education and in skilled and semi-skilled occupations or in self-employment.

Three other aspects are also noted. Toronto’s Chinese tend to concentrate in white-collar instead of blue-collar occupations. There is also a higher level of participation in the finance, insurance, real estate, business services, accommodation, food and beverage industries as opposed to the government, education, health and social services, and transportation and communication sectors. Chinese and non-Chinese immigrants are similar in terms of their participation in paid employment and self-employment although in 1991 slightly less Chinese worked part time and slightly more did not work.

Internally, immigrants born in Hong Kong and Taiwan are more educated, more skilled, and more likely to be employed in finance, insurance, real estate and business services whereas immigrants born in China and Vietnam are more likely to be employed in semi-skilled and unskilled manual jobs in the manufacturing, construction, accommodation, food and beverage industries. Taiwanese immigrants are also more entrepreneurial than the other Chinese immigrants; 20% of those working in 1991 were self-employed as opposed to the 12% Mainland Chinese and 10% Hong Kong Chinese.

Once again, this divergence in economic participation can be explained by differential development levels at various source countries and the conditions upon which they landed in Canada. It also sheds light on the variation in spatial concentration of different subgroups discussed in the pervious section.

Based on the last names of chief executives reported in the Dun & Bradstreet Directory, the project identifies 634 Chinese-owned firms from a total list of 644761 entries in 1997. Their structure and distribution are as follows.

Sectorally, Chinese businesses are well represented. Of the 65 industrial categories outside of the primary and public administration sectors, Chinese businesses are not represented in only 13 of them, most of which are either public-incorporated or regulated, such as non-depository credit institutions, and rail and air transportation. Over 80% of the Chinese firms are in manufacturing, wholesale trade, retail trade and services. Compared to all Toronto firms, Chinese firms are over-represented in manufacturing and wholesale trade; similarly represented in retail trade; mildly underrepresented in services, transportation/communication/utilities, and finance/insurance/real estate; and weakly represented in construction. Chinese manufacturing firms cover 16 of the 20 standard classifications in this category, including apparels, industrial/ commercial machinery, electronic and electrical equipment, food and kindred products, printing and publishing, chemical and allied products, and rubber and plastic products. The wholesale firms are equally represented in the trading of both durable and non-durable goods. The retail firms are heavily biased towards the provision of eating and drinking places. Whether Chinese firms are actually underrepresented in services, transportation/ communication, and finance/insurance/real estate requires further analysis since there is a strong representation of public sector and government-regulated industries in these sectors. For example, the Dun & Bradstreet Directory includes public educational institutions and hospitals in the service sector, and local bank branches in the finance/insurance/real estate sector. Given a concentration ratio of 60 to 80%, Chinese businesses in these sectors may not be underrepresented. All these observations suggest that Chinese businesses are diversifying and are no longer just retail- and service-oriented towards their co-ethnics.

Functionally, Chinese businesses are no longer confined to single locations. 12% of them are headquarters mostly in retail and consumer services, suggesting multi-plant establishments. 6% of them are branches most of which are franchisees of mainstream restaurants, drugstores, or insurance establishments.

Structurally, Chinese firms are expanding in size. While 57% of the Chinese businesses are small (less than 20 employees) and 41% are medium-sized (20 to 199 employees), 2% of them, covering a range of business types in wholesale, manufacturing, realty, and accommodation, employ 200 to 750 workers. In terms of sales volume, while 26% of the Chinese businesses made less than $1 million in 1997, and 78% made less than $5 million, slightly over 10% of the Chinese firms exceed $10 million. Apart from a holding company reporting sales of $1.7 billion, the large Chinese firms are engaged in wholesale trade, machinery manufacturing, real estate, and business and transport services.

While this study obtains no information on the number of Toronto firms in each employment and sales class, it should be noted that Chinese firms, while representing 0.1% of the total Toronto sample, account for 1% of the top 1000 Toronto firms in both employment and sales. In particular, one manufacturing firm, ranking ninth in the whole Toronto business sample, and being the third largest computer firm in Canada, is owned and operated by a 1985 immigrant from Hong Kong. This is a great leap forward in defining immigrant businesses.

Geographically speaking, Chinese businesses in Toronto, like the Chinese people in Toronto, are urban bound. The shares among the core, the inner suburbs and the outer suburbs, respectively at 27.6, 32.65, and 39.75%, indicate the geographic spread of these businesses. Generally, the spatial distribution of Chinese businesses assumes a dispersed pattern although certain pockets of concentration are found in the Toronto downtown core, the industrial/ commercial areas in Markham and NE Scarborough. The location pattern of Chinese businesses is not entirely tied to the Chinese settlement pattern. While retail, service, and finance, insurance and real estate are more likely to locate in Chinese settlement concentrations, manufacturing and wholesale are all over the map in Mississauga, Vaughan, Markham, Scarborough and Toronto.

Analysing the IMDB data allows us to assess the economic contributions of the Chinese immigrants by comparing the income tax they paid with the social welfare and unemployment insurance (UI) benefit they received.

In 1995, 28 per cent of all the Chinese immigrants who landed between 1980 and 1995 filed a tax return to report various types of income. In total, they paid $111 million in federal and provincial income tax. 2% of them received $22.2 million in welfare payment, and 2.8% received $22.5 million unemployment benefits. Subtracting both types of benefits from the total income tax, the Chinese immigrants made a net contribution of $66.3 million to the Canadian economy in one year.

The proportion of immigrants reporting income and paying tax did not vary much across education levels, ranging from 25% for those with 0-9 years of schooling to 35% for those with a doctoral degree, though on average, those with higher levels of education paid more income tax than those with low levels of education, ranging from $1425 with 0-9 years of schooling to $6198 with doctorate degree. Compared with immigrants with higher levels of education, a higher proportion of those with lower levels of education received welfare; but on a per capita basis, the latter did not receive more dollars than the former. Immigrants of different levels of education are equally likely to collect UI benefits.

Length of time in Canada seems to be an important factor in determining the economic impacts of immigrants. In general, a higher proportion of earlier immigrants reported income and paid higher income tax per capita than the more recent immigrants (over 40% of those who landed before 1987 vs. under 30% of those who landed in 1987 or after). As well, higher proportions of earlier immigrants received welfare and UI benefits (more than 5% of those who landed before 1987 vs. less than 2% of those who landed in 1987 or after), though the overall proportions of immigrants who received welfare and UI benefits are as low as 2% and 2.8% respectively. Contrary to popular perceptions, immigrants in such classes as family members and retirees also made positive contributions. For example, 33.2% of immigrants in family class and 27.6% in retiree class reported income and paid income tax; but only 3.4% in family class and nearly none in retiree class received welfare benefits; and only 3.6% in family class and 0.9 % in retiree class received UI benefits. As groups, these immigrants still made a net contribution of $ 24 million and $6 million respectively. The only immigrants who received more than they contributed were refugees and their dependants, with the former having received $1.5 million, and the latter $0.39 million, than they contributed. Even so, 67.8% of the refugees paid income tax, and only 19.4% received welfare and 9.7% received UI benefits.

Social and economic integration has always been a key concern in immigration and settlement studies, whereas the economic contribution of immigrants has always been a driving force of immigration policy. The findings in this research project are informative for the public and policy decision-makers about immigrants' impact on Canadian society and economy, and are useful for future design of settlement policies and evaluation of selection criteria of immigrants.

This case study on one specific ethnic group indirectly illustrates how changes in immigration policy and different immigration policies can affect the nature and composition of immigrants coming to Canada, and the structure of immigrant businesses in Canada. They produce different social and economic impacts.

The Chinese in Toronto come from diverse origins. They exhibit different characteristics. Those born in Hong Kong and Taiwan are generally well-educated and well off; those born in Vietnam are the most disadvantaged; those born in Mainland China are a mixed batch, some closer to the Hong Kong subgroup in terms of education and occupation status, and some closer to the Vietnam subgroup in terms of economic disadvantage. Understanding any internal differences is an essential tool to designing public policies and enabling community dynamics. Whereas immigrants’ economic conditions prescribe their settlement patterns, a knowledge of this enables efficient and effective delivery of social and community services. Treating immigrants from the same ethnicity or from the same general region as homogeneous, for example, by educators and crime stoppers alike, is regarded as insensitive and may create mistrust and community resentment.

Through the economic activity analysis, it is learned that despite their education and skill, the Chinese as a group or as individual subgroups (and likely the other minority groups too), compared to the rest of the population, are in a disadvantaged position in terms of employment opportunities and earning potentials. If this unfavourable outcome is attributable to the following commonly cited factors: the glass ceiling phenomenon, the accreditation issue, the lack of local experience, the tendency of new immigrants ready to take any job for reasons of economic survival and/or intense participation in ethnic labour market, policy makers should seriously consider their implications on economic integration and social harmony, and expedite the policy processes on accreditation and labour market training, or simply rethink their immigrant recruitment strategies.

Chinese businesses have diversified and are represented in most industrial sectors. As they are actively engaged in basic economic production, they no longer conform to traditional perception of immigrant businesses. On the one hand, the Chinese have created an ethnic economy away from being enclaves. This is an important step towards achieving economic integration. On the other hand, the Chinese ethnic economy is relatively complete. The Chinese population in Toronto can look internally for all their consumption and service needs. This may distract social integration. While this economic transformation has partly to do with immigration policy changes in the last thirty years, and is a welcoming signal to the Canadian economy, it also poses a challenge to achieving a balance in social and economic integration as immigrant communities grow.

The economic contribution of immigrants is a key consideration in policy debate on optimal numbers and desirable selection criteria. In the past, debates tend to focus on the economic costs of providing services used to help immigrants acquire linguistic and occupational skills needed for employment in Canada, but little has been done to quantify immigrants' economic contributions. The economic impact analysis suggests that the Canadian immigration program worked well in the past 15 or so years, for the economic well-being of the nation. In general, immigrants admitted under the program as a whole are not a drain on the system. It should be noted that the level of education at the time of immigration, which is a key selection criterion in immigration program, does not seem to be a significant factor for differentiated economic impact. Although those with minimal education are more like to receive welfare, a high proportion of them do pay income tax, and the income tax that this group pay outweighs the welfare and UI benefits they collect. In general, immigrants' contributions increase as the length of time in Canada increases. Therefore, contributions of immigrants should not be expected to materialize in a short period of time. Some classes of immigrants, such as family members and retirees, for whose sponsors the federal government has recently tightened requirements, also make positive contributions by paying more taxes than collecting benefits. Since the tightened requirements would have great impact on family life of immigrants, it might be necessary to revisit these requirements in view of their economic contributions to Canada. The only immigrants who receive more than they contribute are found to be refugees and their dependants, but these are admitted into Canada for political and humanitarian reasons and the selection criteria are usually different from those for other immigrants.

1. Lo, L. and Wang, S. 1998. "Settlement patterns of Toronto’s Chinese immigrants: convergence or divergence?" Canadian Journal of Regional Science, Vol. 20 (forthcoming)

2. Economic impacts of Chinese immigrants: contribution vs. burden (in preparation)

3. Chinese businesses moving away from enclave economy (in preparation)

4. An economic activity analysis of the Chinese in Toronto (in preparation)

Partial results of this project were presented at the Second National Conference of Metropolis in 1997 (November, Montreal), at the Annual Meetings of the American Association of Geographers and the Canadian Association of Geographers in 1998 (March, Boston; June, Ottawa), and in the 1998 winter seminar series of CERIS (February, Toronto). The project team is planning to present and discuss some of the findings at the Third National Conference (January 1999, Vancouver), the 1999 the Annual Meetings of the American Association of Geographers, and the 1999 winter seminar series at McMaster University.