As immigration becomes the primary driver of population growth in many countries, concerns persist regarding its implications for public finances. This paper examines the fiscal impact of immigration at the municipal level in Canada between 2004 and 2022, leveraging high-quality annual immigration data and a shift-share instrumental variables (IV) approach. We find that immigration increases municipal revenues and leads to improved municipal budget balances, which holds even for low-skilled immigrants. These results contrast with recent evidence from the United States, which highlights substantial heterogeneity across immigrant skill groups. We argue that low-skill immigrants to Canada are in fact net fiscal contributors in the municipal context, due to the more complex interactions between municipal budgets and the skill distribution.

Greenbelts are a widespread policy tool used to protect natural spaces from urban sprawl. With rising housing costs in many metropolitan areas, numerous questions have been raised about the impact of greenbelts on housing markets. In this paper, I evaluate the impact that the introduction of the world’s largest contiguous greenbelt, which was formed around Toronto in the early-2000s, had on housing prices across the region. To capture the key dynamics of a greenbelt, I develop an estimable model of the housing market with heterogeneous supply elasticities and a nested logit demand system. Using rich transaction and project-level data on housing prices and developments from 2000-2010, I estimate housing supply and demand curves separately, where I address the endogeneity of housing prices with instrumental variables. Using the estimated model, I find that the Greenbelt led to an average increase in housing costs of 2.9% by 2010. Although non-trivial (C$600 a year in rent), this increase accounts for only 4% of the increase in prices during this period, suggesting that the Greenbelt does not explain much of the deterioration in housing affordability. Skyrocketing housing costs can instead be explained by the fact that strong housing demand within the urban footprint is met with highly inelastic housing supply.

Measures of wealth inequality are important indicators, but only exist in a handful of countries. This paper is the first to estimate the distribution of wealth in Canada on a regular basis from 1990-2018. Using the income capitalization method of Saez & Zucman (2016), I find that while the top 1% wealth share rose from 15.3% in 1990 to 19.7% in 2008, it fell back to 17.5% by 2018. These results suggest that Canada has much less wealth inequality compared to the US and is even slightly more equal than France. Using linear decomposition methods, I show that this gap with the US is driven by greater concentration across every asset class and is not driven by a single asset or a different composition of assets held in each country. Then, using synthetic savings decompositions, I show that most of the variation in the top 1% wealth share can be explained by the collapse in the top 1%’s savings rate, which, while positive from an inequality perspective, could have important ramifications for future economic growth in Canada.