Report says Canada needs to close its immigrant wage gap

posted on November 1, 2019

By Canadian Immigrant Magazine |

A report released in the Fall by RBC Economics, Untapped Potential: Canada Needs to Close its Immigrant Wage Gap finds that while Canada is drawing in some of the best and brightest, with the focus on highly skilled, educated immigrants, their integration falls short on one key measure, earnings. And, this gap has widened over the past three decades.

The report points that this is a “red flag for a country that already has the highest proportion of immigrants to total population in the G7”. Today immigrants make up over one-fifth of Canada’s population and that’s expected to rise.

Key Findings include:

• Immigrants earn about 10 per cent less than those born in Canada; 30 years ago the gap was less than 4 per cent
• The immigrant earnings gap spans occupation, age, gender and region
• The immigrant earnings gap has worsened even as immigrants have become significantly more educated than the Canadian-born population
• The immigrant earnings gap for those with a university education aged 45-54 is about 18 per cent
• Only 38 per cent of university-educated immigrants aged 25-54 work in an occupation requiring a university degree, compared with 52 per cent of those born in Canada
• Immigrants’ tendency to work in lower-paid occupations relative to their education only accounts for about 40 per cent of the earnings gap
• The Canadian labour market appears to discount foreign work experience
• Bringing immigrants up to the wage and employment levels of those born in Canada has the potential to add $50 billion to GDP

The report suggests a “path forward” and recommends:

• The tracking of immigrants’ journey through the labour market to better understand why immigrant wages continue to fall short
• Providing help to Canadian employers to better assess foreign work experience
• The government should consider devoting more resources to helping immigrants transition into the labour force after they arrive
• Learning from Atlantic Canada’s relatively narrow immigrant wage gap, and how we replicate that across the country

Read more