Reform Overdue for Canada’s Skilled Immigration System

Reform Overdue for Canada’s Skilled Immigration System: C.D. Howe Institute

Toronto, Oct. 20 – Canada’s approach to immigration faces major challenges, and requires reform if Canada is to meet the international competition for skilled immigrants, according to a new policy study from the C.D. Howe Institute. In Toward Improving Canada’s Skilled Immigration Policy: An Evaluation Approach, authors Charles M. Beach, Alan G. Green and Christopher Worswick assess the strengths and weaknesses of the current point system used to screen new arrivals, identify the policy levers that affect the attributes and success rates of new arrivals, and break new ground by providing a tool to measure those impacts.

The past two and a half decades have seen a marked worsening in the adjustment process of new immigrants, as their earnings levels have dropped significantly relative to Canadian-born workers, say the book’s authors. The earnings gap between Canadian- and foreign-born workers has widened, and the catch-up interval between the earnings of immigrants and Canadian-born workers has lengthened. These results have come at the cost of fewer human resources and skills available to the Canadian economy, a potential threat to social cohesion, and the likely loss of skilled immigrants who choose to return home or move on to another country.

Tracking entry-level earnings of recent arrivals, the authors find economic class immigrants tend to do better on average than other major groups of immigrants, such as family class or refugees. Education and language fluency – in English or French – have positive impacts on earnings.

Among Beach, Green and Worswick’s findings:

• Points allocated according to age, in the federal point system for scoring immigration applicants, have a weak effect on the earnings outcomes of immigrants. Moving to an asymmetric weight scheme, as currently used in Quebec and Australia, where points are reduced for older age beyond a maximum-points age interval, would produce better outcomes by attracting younger, more adaptable, applicants.

• At the same time, past work experience abroad is not well rewarded in the Canadian labour market. Accordingly, the number of points awarded for foreign work experience should be reduced.

• The current federal point system puts heavy weight on broad white-collar skills and education, and little weight on blue-collar or trade skills and training. Given the major demands for trade skills, as in the rapidly expanding energy and resource sectors, the weighting system should allocate more points to blue-collar skills to facilitate a more balanced occupational and skills mix among incoming workers.

• More points could be allocated for arranged employment. One way is to allocate more points for arranged employment and link such points to specified trades and other in-demand occupations.

• To address short-term skill shortages and temporary tightness in the labour market, Ottawa has relied heavily on temporary foreign workers. More than half of temporary foreign workers are low skilled. Given that Canada’s unemployment rate is well above full-employment levels, it would seem reasonable to reduce the number of temporary foreign workers now admitted, especially for lower-skilled workers. A cap on admissions under the program could be linked to the Canadian unemployment rate.

• The Canadian Experience Class program is excellent, but its implementation could be improved.

• Provincial Nominee programs have expanded dramatically in recent years, and need to be evaluated in terms of the skill profiles and success rates of immigrants they are attracting.

For the first chapter of the Policy Book, click here

For more information contact:
Charles Beach, Professor of Economics,
Queen’s University,

Christopher Worswick,
Professor of Economics,
Carleton University

ENDS

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