Recent immigrants are finding employment and earning more money at a faster rate than they did a decade ago, a new report from Statistics Canada says.
The report focuses on employment outcomes for recent immigrants aged 25 to 54 who had received their permanent residence status within the past 10 years.
In 2023, the unemployment rate for this group was 6.6 per cent, down from 12.1 per cent in 2010. In addition, the gap in the unemployment rate between recent immigrants and Canadian-born workers shrunk from 5.7 percentage points to 2.6 during this same period.
The gap between what recent immigrants and Canadian-born workers earn is also closing.
In 2020, recent male immigrants earned 13.4 per cent less than Canadian-born male workers, down from a gap of 19.9 per cent in 2015. In 2020, new female immigrants earned 15.5 per cent less than Canadian-born female workers, down from a gap of 20.4 per cent in 2015.
“In previous decades, it took a lot longer, typically, for newcomers to catch up to the Canadian average, in terms of employment rates and wages and salaries,” said Jock Finlayson, a senior fellow at the Fraser Institute think tank. “This research suggests that that has shifted, and immigrants are… catching up more quickly to the Canadian average.”
Immigration changes
Improvements in recent immigrants’ employment and earnings are because of changes to the immigrant system, the report says, as well as a strong labour market through much of the study period.Â
In 2022, 36 per cent of new immigrants had work permits in Canada before becoming permanent residents, up from only 19 per cent in 2010, the report says.
“An increasing number of economic immigrants are chosen from the pool of temporary foreign workers,” the report says. “Former temporary foreign workers, especially those with high-skilled jobs, experience better labour market outcomes after immigration, compared with immigrants admitted directly from overseas.”
Another factor is the introduction of the Express Entry system in 2015. “This system places a strong emphasis on Canadian work experience, enhances language proficiency and evaluates foreign education rigorously,” the report says.
The results are “quite expected,” said Parisa Mahboubi, a senior policy analyst at the C.D. Howe Institute think tank, who focuses on immigration, skills, education and the labour market.
“When someone has Canadian work experience, it signals that they are familiar with the labour market,” she said. Because they already have connections with Canadian employers, it can be easier for them to find work.
The report also suggests that accepting immigrants with high education and skill levels is a good policy.
“By selecting those highest skilled immigrants, we are going to improve the overall outcomes of immigrants,” Mahboubi said.
The report makes it “clear” that the “two-step process” of admitting immigrants who were temporary foreign workers or international students in Canada leads to better employment outcomes, said Jock Finlayson, a senior fellow at the Fraser Institute think tank.
“People who already worked here or lived here are likely to adapt more quickly to the Canadian social environment, but also the labour market environment,” he said.
But Finlayson would like to see more reporting on the labour outcomes of international students. The report’s findings do not justify admitting international students in an “uncontrolled and unsupervised” way, he said.
“The admission of temporary foreign workers and international students has also increased considerably in recent years,” the report says. “It remains uncertain whether the national economy will generate sufficient employment opportunities to accommodate the expected increase in labour supply from new immigrants and temporary foreign workers.”Â
Mahboubi said more work is needed to ensure immigrants’ jobs match their skills. “The rate of skills mismatch and education mismatch is higher among immigrants than non-immigrants,” she said.
Not all immigrants come through the Express Entry Program or have worked or studied in Canada. There need to be programs to help those without Canadian experience adapt to the Canadian job market, she said.
