Report shows newcomers earnings is significantly low compared to nonimmigrants

As Ottawa responds to Canada’s unprecedented labour shortage by ramping up immigration targets to 1.5 million people over the next three years, there remains a significant wage gap between new immigrants and nonimmigrants in Ontario — particularly in big cities like Toronto, according to a new report.

The report, released Wednesday by the Financial Accountability Office of Ontario, found the annual wage gap between newcomers and the total population over nearly four decades, only narrowed to $6,200 in 2019 from $10,700 in 1982.

The report also found the largest wage gap in 2021 between newcomers and nonimmigrants was in Windsor at more than 21 per cent less, with Toronto a close second at more than 20 per cent.

Immigrants in Toronto earned $48,000 compared with $60,400 for nonimmigrants. In Ottawa, the numbers were $55,600 compared to $67,000.

While immigration can spur population growth and drive demand for goods and services, it can also impact the labour market, said Sheila Block, a senior economist with the Canadian Centre for Policy Alternatives.

“If you have an increasing share of the labour force … whose credentials might not be recognized and who are more likely to be underemployed and are facing discrimination, it can have a negative impact on labour market outcomes for everybody and depress wages for all workers,” Block said.

 

Many newcomers — Ontario welcomed a record 227,424 in 2022 — arrive only to find mostly low-skill, low-paying jobs, despite some 15 per cent of those aged 25 to 54 holding a university degree while being employed in a position requiring no more than a high school education in 2021 — higher than the nearly 10 per cent of nonimmigrants, according to the report.

“Despite these increasing requirements on education and Canadian experience, we still see a higher share of immigrants overqualified for their jobs compared to nonimmigrants,” she said.

“What the results of this report show is that there is a continued gap between immigrant and Canadian-born workers,” Block said. “Part of this is the result of racism in the labour market and a lack of recognition of credentials and ongoing discrimination that immigrants face.”

In 2021, immigrants accounted for more than half of the entire working-age population who hold advanced degrees, including doctorates, masters and degrees in medicine and dentistry, according to Statistics Canada. Yet one in four worked in jobs that required a high school education or less. That’s two-and-a-half times greater than the “overqualification rate” of Canadian-born degree holders.

 

 

And there is a risk that much-needed talented will leave the country if conditions do not improve.

According to StatsCan, an estimated 12 per cent of immigrants get trapped in chronic poverty.

Because of these conditions, 30 per cent of new Canadians aged 18-34 and nearly a quarter of university-educated newcomers say they are likely to leave the country in the next two years, according to a 2022 survey conducted by Leger in partnership with the Institute for Canadian Citizenship.

“If we have an immigration policy that is focused on bringing highly skilled, highly educated immigrants to the country where there remains barriers to them working in their professions and earning wages … we will run the risk of people leaving for greener pastures,” Block said.

 

 

This article was reported by The Star