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October 10, 2023

The trends of immigrant employment in Canada

Canada’s workforce is one of the most skilled in the world—due not just to excellent educational institutions within the country, but also because of highly skilled newcomers who arrive to Canada annually and drive growth in the labour force.

However, how successful are newcomers at finding employment in Canada, in the short, medium, and long-term?

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The results

A recent study published by Statistics Canada sheds insight on the matter. The report included data from March 2006 to July 2023, providing a large overview of unemployment rates for:

  • Landed immigrants (those who have just arrived, or who were already in Canada after newly being granted permanent residence (PR) status);
  • Immigrants who had been in Canada for five years or less;
  • Immigrants who had been in Canada between 5-10 years; and
  • Immigrants who had been in Canada for 10 years for more.

The study can thus help reveal not just the average unemployment rates for each group, but also how much the unemployment rates can fluctuate for different groups during this 17-year period.

Between 2006 and 2023, landed immigrants in Canada had an average unemployment rate of 7.7%. Unemployment for this group peaked in June of 2020 at 14.6%, though notably employment data from 2020-2021 is greatly impacted by the COVID-19 pandemic (a common theme across all immigrant groups) *. The lowest unemployment rate for landed immigrants was 5%, observed in June of 2022.

Immigrants who had been in Canada for five or less years had the highest average unemployment rate (11.7%) among all studied groups, between 2006 and 2023. This group was also subject to notable fluctuations in unemployment, reaching a high of 17.9% in June 2020 and a low of 7.4% in August 2022.

Immigrants who had been in Canada between 5 and 10 years had an average unemployment rate of 8.9% in the 17-year study period. This group saw the highest fluctuations in unemployment rate among all studied groups, reaching a high of 16.8% in June 2020, and a low of 4.5% in December 2022.

Lastly, immigrants who had been in Canada for 10 or more years experienced the lowest average unemployment rate of any group in the study period, at 6.6%. In addition, the group had the lowest fluctuations in unemployment rate among all the studied groups, seeing a high of 13.4% in June 2020, and a low of 4.3% in December 2022.

Understanding these results

Perhaps the most burning question that emerges from these results is “why do immigrants who have been in Canada for less than five years have such a high unemployment rate?”. Notably, this cohort had both a higher unemployment rate and variance in unemployment rate than even landed immigrants. Key reasons for this include:

  • New permanent residents (in Canada for less than five years) pursuing education and accreditation to better adjust to the Canadian job market, or upskill themselves (and thus not working);
  • Spouses and dependent children (who are 15 years or older) of new permanent residents, who though of working age, may also be pursuing education or managing home life, thus adding to the unemployment rate; and
  • A large section of new PRs who are counted as “landed immigrants” will have already been in Canada (usually as students and workers)—and will likely already have “pre-landing” Canadian work experience, driving down unemployment among this group.

The key finding here is that for new PRs without pre-landing Canadian work experience, it may take time to see their skills and accreditation translate into their labour market outcomes. However (as the results above indicate) economic immigrants without pre-landing Canadian work experience will generally see their labour market outcomes converge with newcomers who do have pre-landing work experience, and even Canadian-born workers.

So, what impacts these labour market outcomes for immigrants in different cohorts? A study released by Statistics Canada in 2022 gives insight here. The study looked at the following traits that impacted principal applicant, economic-immigrant success:

  • Pre-landing Canadian work experience;
  • Official language ability;
  • Age (at landing); and
  • Education.

The study broadly found that though some factors were particularly impactful for immigrant labour market success upon landing (pre-landing Canadian work experience, official language ability), the impact of these factors diminished as time in Canada increased. Conversely, the effect of age and education-level upon landing increased over time.

The study concluded that the single greatest determinant of immigrant success in the short, medium and long term may not be pre-landing Canadian work experience, but rather the quality of this pre-landing experience. Immigrants who were able to study or work at recognized institutions and capacities in Canada (before receiving PR status) held a significant advantage when compared to those who did not. Importantly, however, the convergence of labour market outcomes between three groups (new immigrants without pre-landing Canadian experience, new immigrants with pre-landing Canadian experience, and Canadian born workers) indicates that those without meaningful pre-landing Canadian experience were able to make up the difference, given enough time.

*During the period corresponding to the COVID-19 pandemic (2020-2021), average unemployment for most cohorts was between 2-3% higher than the 17-year average.

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