‘Hate’ to say, I told you so

  • Strong feelings: BIU protesters march towards Parliament in March, 2016 in opposition to the Pathways to Status legislation (File photograph)

    Strong feelings: BIU protesters march towards Parliament in March, 2016 in opposition to the Pathways to Status legislation (File photograph)

  • Michael Fahy (Photograph courtesy of Scott Tucker Photography)

    Michael Fahy (Photograph courtesy of Scott Tucker Photography)


On December 8, the Fiscal Responsibility Panel’s 2018 report was published. The executive summary said: “A precondition for faster growth is to increase the island’s workforce. It is the only realistic counter to the island’s demographic challenge from a rapidly shrinking and ageing population. Immigrants and returning Bermudians with the right skills will help to create jobs, not displace them.”

The said report goes further and says: “It will be critical to adopt an immigration policy and welcoming attitude ... that encourages ... people ... to come to the island ... and stay”, including “ ... the provision of citizenship to the families of non-citizens that have long been resident in Bermuda”.

Sadly, owing to some of the worst examples of lies and misinformation employed by the former Opposition and its respective pop-up campaigns in 2016, the obvious was shot down in a ball of flames. Given the independent Fiscal Responsibility Panel’s findings above, I wanted to remind the reading public of the following opinion piece I wrote that was published in The Royal Gazette on March 4, 2016:

Bermuda faces a demographic crisis. Our population is shrinking rapidly and, as it shrinks, the tax bill that the younger, working population must pay to fund such things as healthcare and pensions for seniors increases dramatically.

Many independent commentators such as the Fiscal Responsibility Panel, the Sage Commission, Sir John Swan, Larry Burchall, Nathan Kowalski and the Chamber of Commerce have spoken of the need for Bermuda to increase its population to make sure taxes on the working population do not rise to painful levels.

The Fiscal Responsibility Panel recognised that one of the causes of this coming demographic crisis is that Bermudians are going abroad to live. Their recommendation was that to keep our population in better balance, we should act quickly to stop and reverse this population problem.

How can this be achieved?

1, By increasing immigration to Bermuda

2, By decreasing emigration from Bermuda

3, By encouraging skilled young Bermudians living overseas to return home to put their skills to use in our economy

To decrease emigration from Bermuda, my ministry’s Pathways to Status plan is aimed at reducing the risk of losing long-term residents. Many of those long-term residents are young people born in Bermuda or who arrived in Bermuda at a young age, who now know no other home. As they approach their working years, there is a real risk that they may be forced to leave Bermuda, which we can ill afford.

We are not alone in having a need to attract new residents. Some of the countries with which we compete for international business, including the Cayman Islands, British Virgin Islands and the Channel Islands, have put in place very generous pathways to permanent residence. Our “Pathways” will create an incentive structure that allows Bermuda to compete with those countries for the best and brightest human resources from around the world.

Once again, this is not just the One Bermuda Alliance government saying this; various independent commentators and experts agree with us.

To further decrease outward migration from Bermuda, and to encourage Bermudians now living abroad to return, the Government is stoking the fires of job creation. We are imposing prudence on government finances, preventing the tax burden from getting out of control in the coming years and encouraging inward foreign investment.

Various new projects are coming online in the immediate future: a new hotel in St George’s, the redevelopment of Morgan’s Point, the building of a new airport, the America’s Cup and various other projects up and down Bermuda. The buzz and excitement created by these initiatives have led us to record business and retail confidence as reported in recent weeks.

Despite that positive news, however, there is an unfortunate narrative that critics of “Pathways” have begun to spread, namely, that Bermudians are being forced to leave Bermuda because of the policies of this government.

Before you buy into that theory, think about the many complex reasons why Bermudians chose to live overseas.

• They will often go to university abroad and leverage their experience and contacts to obtain a job in that country

• The present generation of young Bermudians is increasingly global in its outlook and craves opportunities to expand its horizons

• Some find love overseas and choose to build a new life with their partners there

• Others specifically seek job opportunities that do not exist in an economy as small as ours, in fields that do not exist in Bermuda

• Some Bermudians who are unfortunately touched by the gang problem in Bermuda have gone overseas to escape any risk of harm to themselves or their families

• Older Bermudians are choosing to retire overseas

• Finally, some Bermudians will take advantage of their British citizenship and relocate to the UK

That jurisdiction has a lot of “pull” factors, making relocation attractive, such as the National Health Service, child benefits, inexpensive housing, jobseekers allowance and a plethora of other tax credits that Bermuda’s tax base simply cannot afford to support.

Think, too, about this: emigration of Bermudians was well under way during the boom years before the “Great Recession”, which began at the end of 2008, and certainly before the OBA government came to office. Census data from 2010 confirms this.

Notice, also, the sudden upswing in 2003 to 2005, which corresponded with new-found freedoms for Bermudians as British and European Union citizens.

From 2001 to the end of 2008, some 549 Bermudians left Bermuda. This is likely an underestimation. Job surveys conducted by the Department of Statistics show a loss of 1,701 Bermudians from the national workforce between 2000 and 2008. What is also interesting to note is that the later uptick in emigration was driven by the loss of non-Bermudians rather than Bermudians.

This also serves to reinforce a point that I have made time and time again: Bermuda’s recent economic boom coincided with a larger residential population, which was driven by the presence of non-Bermudians.

Conversely, our recent economic downturn was driven by an exodus of people of working age and the corresponding shrinkage of our tax base. One commentator has estimated that Bermuda’s population fell by 6,000 between 2008 and 2012. This trend would certainly have continued in the years since. Some others estimate that as many as 10,000 residents, although not necessarily Bermudians, may have left Bermuda since 2008.

And, finally, think about the positive economic benefits that an immigration policy that reverses the hollowing-out of our population will have:

• More employees mean more payroll taxes, and more residents mean more customs duties. This eases the Government’s financial burden and maintains the level of services Bermudians rely on

• Younger, healthier workers pay into our healthcare system to support our ageing Bermuda population — our median age was 26 in 1960, it was 41 in 2010 and it is projected to rise to 46 in 2020

• Those same workers paying for health insurance are paying into the Mutual Reinsurance Fund, which in turn subsidises HIP and FutureCare — government programmes our more vulnerable residents rely on

• In addition, they are paying more into social insurance — the Contributory Pension Fund is underfunded by 46 per cent, or $2.07 billion, and will come under increasing strain with more being paid out and less being paid in

• More employees mean fewer empty houses and apartments — many Bermudians are cash-poor but property-rich, and they rely on the equity in their homes for now and for their golden years

• The presence of more employees will increase the demand for professional support services; this means more opportunities for Bermudians as underwriters, personal assistants, accountants and lawyers

• They in turn will demand more consumer goods and services — entrepreneurial Bermudians will be able to meet this demand by starting businesses and making investments, while others will have new job prospects in the restaurant, construction and healthcare industries

I’ve said before that we must accept responsibility for looking out for those who have long made their homes in Bermuda, and for those young persons who have been put in limbo. Pathways to Status is clearly the right and humanitarian thing to do. However, in these chastened economic times, it’s also vital for our survival.

It is now December 2018 and the panel concluded that, along with other immigration changes “ ... are urgent and essential if Bermuda is to return to a sustainable, and economic and demographic trajectory”.

I am going to enjoy saying, I told you so.

Michael Fahy is a former Minister of Home Affairs, Minister of Tourism, Transport and Municipalities, and Junior Minister of Finance under the One Bermuda Alliance government

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Published Dec 14, 2018 at 8:00 am (Updated Dec 14, 2018 at 7:41 am)

‘Hate’ to say, I told you so

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