The Current

For workers who send money to loved ones back home, pandemic job losses mean remittances are drying up

For some migrants working in Canada, COVID-19's impact on the economy means less money to send home to loved ones who depend on it. What happens when international remittances dry up because of the pandemic?

World Bank expects 20 per cent drop in remittances, which totalled $554 billion US in 2019

Maritza Andino, right, and her mother. Before she lost her job in the pandemic, Vancouver-based Andino used to regularly send money to her mother, 99, back in her native Honduras. (Submitted by Maritza Andino)

Read story transcript

Maritza Andino used to send up to $300 a month to her elderly mother in Honduras, but that money dried up when the pandemic forced her out of work.

"She's 99 and she's taking care of my older sister — she's older too, and she has some illness as well," said the Vancouver-based woman, who lost her job as a childcare provider two months ago.

"They depended [on] the money," she told The Current's Matt Galloway.

Andino has lived in Canada for more than 30 years, and raised her four sons here. They've helped her to make ends meet lately, but one of her sons recently underwent surgery and has been hospitalized for almost a month, adding to the stress she faces, she said.

With Honduras also under a strict lockdown, she said her extended family there is also out of work and just "surviving." 

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Andino told Galloway she has applied for government assistance, but is unsure when her claim will be processed. If she does receive assistance, she says she has no choice but to send some of it to help her family.

"Definitely, I have to send it — I have to send to them."

Dane Rowlands has studied the remittance economy, and says the practice — and pressure — of sending money back home is "depressingly common."

"People back in low- and middle-income countries rely heavily on family members who've been able to go abroad and send money back," said Rowlands, a professor at Carleton University's Norman Paterson School of International Affairs in Ottawa.

He told Galloway that the $200-$300 Andino sends back is "roughly the annual income for the average person in Honduras."

"These are massive amounts of funds that are going into these countries in many circumstances, and it's critical for the people back home," he said.

A shock like this where all economies are being hit, I mean, there's simply not much that you can do- Dane Rowlands

But with layoffs related to the pandemic, workers will be caught between their own financial difficulty and "family expectations that they remit money," he said.

Remittances part of global economy

Rowlands says roughly $30 billion is sent home by migrant workers in Canada annually, but the country benefits from the "critical functions being carried out by many of them."

"[Now] just like Canadians, they're losing their jobs, and we're losing access to the services that they provide," he said.

Those job losses have a knock-on effect not just for families in recipient countries, but for their wider economies, Rowlands said.

According to the World Bank, global remittances totalling $554 billion US went to low- and middle-income countries in 2019. The organization predicts that figure will drop by approximately 20 per cent this year, due to the pandemic. 

That drop could have serious consequences for a country that relies heavily on remittances, said Rowland.

"This is a massive amount of money, which will now not be arriving there sustaining their families, but also sustaining the local economy."

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'Not much we can do'

Rowlands said governments have limited tools to ease the economic shock of remittance money drying up. 

"There's not much we can do ... this is typically beyond the policy instruments that the government has," he said.

He says that in the past families could weather economic downturns by having ties in several countries. If one country's economy turned bad, a family member somewhere else might be able to send money instead, he said.

But that won't be possible with the widespread impact of COVID-19.

"When you see a shock like this where all economies are being hit, I mean, there's simply not much that you can do," he said.

"This is income, which is just gone now, and so it's going to be hard to make it up."

Written by Padraig Moran. Produced by Caro Rolando and Richard Raycraft.

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