The Canada-Caribbean Remittance Corridor: Fostering Formal Remittances to Haiti and Jamaica Through Effective Regulation (World Bank Working Papers)

Several economies in the Caribbean region, especially from the lower income group, are highly dependent on remittances. Between 1991 and 2006, the combined flows of total remittances reaching the Caribbean have seen almost a 17% average annual growth rate, surpassing USD 6billion in 2005 and overtaking ODA and FDI into the region. In addition, remittances represent more than 20% of the domestic gross domestic product (GDP) in some Caribbean countries and have played a significant role in lessening both balance of payment deficits and the impact of natural disasters to which the region is particularly vulnerable. Given the importance of such remittance flows, this study undertakes an analysis of the various dynamics underlying the Canada-Caribbean remittance corridor, including Caribbean migration issues, remittance market landscapes and regulatory frameworks. This study is intended to assist Canadian and Caribbean national authorities in their mandate of providing incentives for the continued growth and competitiveness of their remittance industries, while protecting remittance markets from being abused by criminals. Contents......Page 4 Foreword......Page 10 Acknowledgments......Page 12 Abbreviations and Acronyms......Page 14 Description of Terms and Key Business Models......Page 16 Executive Summary......Page 18 Key Statistics......Page 26 Bilateral Remittance Corridor Analysis......Page 30 Table 1. World Bank’s Bilateral Remittance Corridor Analyses, 2008......Page 31 Methodology and Outline of the Report......Page 32 1. Migration and Remittance Patterns in the Caribbean......Page 34 Figure 1. Regional Comparison: Net Migration Rate, 1970?2015......Page 35 The Caribbean as a Remittance Recipient......Page 40 Main Points......Page 48 Migrating to Canada......Page 50 Remitting from Canada......Page 58 Legal and Regulatory Framework for Remittance Service Providers in Canada......Page 66 Main Points......Page 77 Haitians in Canada......Page 78 Figure 36. Canada: Permanent Residents from Haiti by Occupation, 1980?2006......Page 90 Legal and Regulatory Framework Applicable to Maisons de Transfert in Haiti......Page 99 Main Points......Page 107 Jamaicans in Canada......Page 108 Table 19. Education, Employment and Income Statistics, Jamaicans vs. Overall Canadian Population, 2001......Page 123 Legal and Regulatory Framework Applicable to Remittance Companies and Agents in Jamaica......Page 135 Main Points......Page 145 5. Findings and Policy Considerations......Page 146 Haiti: Policy Recommendations......Page 149 Box 12. Relationship between Transparency and Reduction in Remittance Transfer Costs: Case of Mexico......Page 155 Canada: Policy Recommendations......Page 159 Box 14. Canadian Programs to Implement Immigrants into the Labor Market......Page 162 Appendixes......Page 164 A. The Caribbean: Main Historical Features and Migrant Destinations......Page 166 B. Historical Features of Early 20th Century Migration to Canada (1901?61)......Page 170 C. Focus Group Discussion: Haiti......Page 174 D. Focus Group Discussion: Haitian Diaspora......Page 178 E. Focus Group Discussion: Jamaica......Page 182 Bibliography......Page 188 Table 2. Percentage of Total Expatriates, Highly-skilled Aged 15+......Page 41 Table 3. Point System Evolution, 1967?2003......Page 51 Figure 15. Canada: Permanent Migration and GDP Growth......Page 53 Table 5. Top 10 Country of Origin of Recent Immigrants, 2001?06......Page 57 Table 6. Remittances and Immigrant Categories......Page 62 Table 7. Summary of STRs Received by FINTRAC......Page 72 Table 8. Canada: On-site Visits to MSBs by FINTRAC......Page 74 Table 9. Summary of AML/CFT and Other Requirements for RSPs in Canada......Page 75 Figure 25. Canada: Admitted Permanent Immigrants from Haiti, 1966?2006......Page 80 Figure 28. Canada: Permanent Resident Inflow from Haiti, 1980?2006 (share of total)......Page 83 Table 12. Canada-Haiti: Bilateral Remittance Flow Size Estimates......Page 92 Table 13. Amounts Transferred to Haiti, 2004......Page 93 Table 14. Canada-Haiti: Main MTOs Fee Structure, March 2008......Page 95 Table 15. Summary of AML/CFT and Other Requirements for Maisons de Transfert in Haiti......Page 106 Figure 45. Canada: Composition of the Jamaican Community, 2006......Page 116 Figure 49. Percentage of Jamaicans Employed in Canada Relativeto Overall Population......Page 119 Figure 51. Per Capita Income Levels of Jamaicans and the Overall Canadian Population......Page 122 Table 21. Households Receiving Remittances, By Quintile, 2001?06 (percent)......Page 125 Table 23. Remittances as a Share of Adult Equivalent Expenditure, By Quintile, 2006......Page 126 Table 24. Canada-Jamaica: Main MTOs Fee Structure, July 2008......Page 129 Table 25. Summary of AML/CFT and Other Requirements for Remittance Companies in Jamaica......Page 143 Box B1. Race and Immigration Policy......Page 171 Table E1. Summary of Survey Results: Jamaican Returnees and Remittance Recipients......Page 185 Figure 2. Caribbean: National Net Migration, 2005......Page 36 Figure 3. Haiti and Jamaica: Net Migration Rate per 1000 people, 1970?2010......Page 37 Figure 5. Per Capita GDP Growth Rates, By Region, 1980?2006 (10yr moving average)......Page 38 Figure 6. Net Migration Rate and Per Capita GDP, 2000......Page 39 Figure 7. Regional Comparison: Breakdown of Global Inward Remittances, 2007......Page 42 Figure 9. Regional Comparison: Remittances as a Percent of GDP, 1991?2006......Page 43 Figure 11. Per Capita GNI and Remittances (2006)......Page 44 Figure 12. Haiti and Jamaica: Official Development Assistance, FDI, and Remittances(as a percent of GDP)......Page 45 Figure 13. Caribbean: Official Development Aid, FDI, and Remittances, 1980?2005......Page 46 Figure 14. Canada: Composition of Permanent Immigration, 1980?2006......Page 52 Figure 17. Region of Origin of Recent Immigrants to Canada, 1971?2006......Page 54 Figure 18. Caribbean-born Immigrants in Canada......Page 55 Figure 20. Percentage of Respondents who Remitted, By Selected Countries of Birth......Page 59 Figure 21. Canada: Average Annual Amount Remitted by Recent Migrants......Page 60 Figure 23. Canada: Breakdown of Senders, By Amount Sent Annually (percent)......Page 61 Figure 24. Bilateral Remittance Estimates using Migrant Stocks, Host CountryIncomes, and Origin Country Incomes......Page 65 Figure 26. Haiti: Permanent Resident Flow to the United States and Canada,1960?2005......Page 81 Figure 27. Canada: Permanent Residents from Haiti, By Category, 1980?2006......Page 82 Figure 29. Canada: Temporary Workers and Permanent Economic Visa Applicationsfrom Haitian Nationals, 2000?06......Page 84 Figure 30. Canada: Composition of the Haitian community, 2006......Page 85 Figure 32. Canada: Composition of the Haitian Diaspora, By Period of Entry......Page 86 Figure 33. Canada: Composition of the Haitian Diaspora, By Age Group, 2006......Page 87 Figure 34. Canada: Composition of the Haitian Population, By Education Profile (highest degree attained)......Page 88 Figure 35. Haitian Community: Selected economic indicators comparison......Page 89 Figure 37. Haiti: Remittance Flows......Page 91 Figure 38. Haiti: Market Shares of Maisons de Transfert October 2006?July 2007......Page 97 Figure 39. Canada: Admitted Permanent Residents from Jamaica, 1966?2006......Page 109 Figure 40. Canada: Composition of the Jamaican Diaspora By Period of Entry......Page 110 Figure 42. Canada: Permanent Resident Inflow from Jamaica, By Category, 1980?2006......Page 111 Figure 43. Temporary Visas Issued, By Category, 2000?07......Page 113 Box 7: Canadian Seasonal Agricultural Workers Program (CSAWP)......Page 114 Figure 47. Canada: Composition of Jamaican Population, By Age Group, 2006......Page 117 Figure 48. Composition of the Jamaican Population, By Education Profile, 2006......Page 118 Figure 50. Canada?Permanent Residents from Jamaica by Stated Occupation......Page 121 Figure 52. Jamaica: Breakdown of Remittance Inflows, By Country of Origin, 2007......Page 124 Figure 53. Jamaica: Breakdown of Formal Remittance Inflows, By Channel Type, 1994?2007......Page 127 Figure 54. Jamaica: Breakdown of Formal Remittance Inflows, By Channel Type, 2007......Page 128 Figure 55. Remittance Company Typically Used by Jamaicans......Page 130 Figure 57. Share of Locations per MTO, By Parish, 2007......Page 133 Box 1. Focus: Haiti and Jamaica......Page 47 Box 2. Immigration to Quebec......Page 56 Box 3. Money Laundering Threat to RSPs for Funds Going to/from the Caribbean......Page 68 Box 4. Regulating RSPs at the Provincial Level......Page 70 Box 5. Role of the Exchange Rate in Overall Remittance Transfer Costs......Page 96 Box 6. Drug Trafficking in Haiti......Page 100 Box 8: Addressing Unemployment among Jamaicans at Home and Abroad: The HEART Trust/ National Training Agency (NTA) of Jamaica......Page 120 Box 9: Obtaining a License......Page 137 Box 10: Excerpts of the General Principles for International Remittance Services......Page 147 Box 11. The Creation of Migration and Remittances “Working Groups?......Page 148 Box 13. Indonesia: Official Policies and Programs to Regulate Indonesian Worker Migration......Page 156 Box B2. Setting the Course: The Mackenzie King Statement (1947)......Page 172