Chapter 10: Immigration

The Economic Importance of Immigration

Immigration has long been a key element of Canada’s and Ontario’s labour-market policy. Ontario’s population is aging and fertility rates remain low. Consequently, immigrants will constitute a rising proportion of population growth. Within this decade, immigration will account for all net growth in the working-age population. By attracting skilled workers from abroad, Ontario can better address potential labour-market shortages. Maintaining labour-force growth, aided by successful immigrants, can help sustain Ontario’s long-term economic growth.

Lower levels of immigration would result in significantly slower growth in the working-age population. For example, according to the Ontario Ministry of Finance, if immigration averaged about 70,000 per year (which is about half the population projection reference scenario of 139,000 per year), Ontario would have 1.4 million fewer people in the 15–64 working-age group by 2036 available to contribute to the economy and pay taxes.

On the other hand, if immigrants are unable to use their skills and education, their contributions to the Ontario economy cannot be fully realized. There is considerable concern about the deteriorating economic outcomes among recent immigrants over the past two decades. In short, future trends in immigration and the degree to which Ontario can successfully integrate new arrivals into the province’s labour market and social fabric will have a significant effect on Ontario’s fiscal fortunes. 

Recent Trends in Immigration

Ontario remains the top destination for immigrants to Canada. Over the last 20 years, Ontario received 2.4 million landed immigrants — 52 per cent of all those who came to Canada. However, over the last decade, rising economic fortunes in other provinces and major changes to Canadian immigration policy have adversely affected Ontario’s immigration levels and the mix of immigrants coming to Ontario. In 2010, Ontario received 118,114 permanent residents, representing 42.1 per cent of total admissions to Canada and well below the province’s long-term average. While regional economic conditions are a major factor, Ontario’s Ministry of Citizenship and Immigration has also noted that new rules by the federal Minister of Citizenship and Immigration, giving priority to certain types of applicants, has influenced the mix of Ontario immigrants. The latest changes allow only 500 applicants in each of the 29 Federal Skilled Worker (FSW) occupations.

Studies have shown that immigrants selected on the basis of their human capital (e.g., high levels of education and language skills) are more resilient to changes in their new environment and culture.1 Historically, Ontario has relied heavily on admissions of economic class immigrants, and particularly the FSW class who are admitted using a points-based system measuring education, work experience, knowledge of English and/or French, and other criteria. As the long-standing destination of choice for immigrants to Canada, Ontario has been able to rely on the FSW program for most new economic immigrants to the province. However, federal policy changes expanding the number of those admitted under the provincial nominee, live-in caregiver and Quebec skilled worker programs have contributed to a decline in FSW class landings to Ontario. In 2010, Ontario received 53,885 immigrants through the FSW program, about 46 per cent of all landings to the province, down from a high of 89,078 in 2001. Fewer economic immigrants coming to Ontario each year means that Ontario’s mix is shifting towards a higher proportion of family class and refugee immigrants, who are not selected on the basis of their human capital.

Recommendation 10-1: Develop a position on immigration policies that is in the province’s best economic and social interests. Present this position to the federal government with the expectation that, as the largest recipient of immigrants in Canada, Ontario’s interest will be given considerable weight in federal policy development.

Recommendation 10-2: Catalyze national discussions on immigration policy as the successful integration of immigrants is critical for Canada’s and Ontario’s economic futures.

TABLE 10.1 Permanent Residents Admitted in 2010, by Destination and
Immigration Category (Including Dependants)
Category Atlantic Provinces Que. Ont. Man. Sask. Alta. B.C. Territories Total
Economic Class                  
Skilled workers 1,373 34,240 53,885 898 712 11,513 16,659 77 119,357
Business immigrants 180 2,489 4,419 24 20 305 5,860 5 13,302
Provincial and territorial nominees 4,626 80 1,528 12,178 5,354 7,492 4,900 270 36,428
Live–in caregivers 63 1,082 7,310 139 124 2,277 2,884 30 13,909
Canadian experience class 66 25 2,360 37 33 811 571 14 3,917
Total economic class 6,308  37,916 69,502 13,276 6,243 22,398 30,874 396 186,913
Other                  
Total family class 821 9,629 29,341 1,377 726 7,372 10,865 89 60,220
Total protected persons 591 4,711 13,914 1,032 574 2,204 1,667 2 24,696
Total other 108 1,724 5,353 124 72 668 776 19 8,845
Category not stated 0 2 4 0 0 0 1 0 7
Total 7,828 53,982 118,114 15,809 7,615 32,642 44,183 506 280,681
Percentage 2.8 19.2 42.1 5.6 2.7 11.6 15.7 0.2 100
Note: Total includes immigrants that did not state a province of destination.
Source: Citizenship and Immigration Canada, "Facts and Figures 2010."

The federal government has allowed provinces to launch provincial nominee programs (PNP) that allow for direct recruitment of workers to their provinces. Nominees’ applications are fast-tracked by the federal government: PNP applications are generally processed within one year, while skilled worker applications take two to five years, depending on the visa office.

Ontario was not only the last province to launch a PNP, but it is also limited to 1,000 principal applicants a year, a very small number relative to the volume of annual immigration to the province. Expanding the PNP could help the province partially offset the recent decline in the number of economic immigrants and cover the full cost of providing integration services. Evidence from other jurisdictions (such as British Columbia) has shown that PNPs have benefited provinces in terms of increased revenues, jobs, skilled labour and investment.2 However, it is important that Ontario continue to emphasize its need to increase the numbers of federal skilled workers in relation to provincial nominees. Although provincial nominees enter Canada with an employment offer, their long-run earnings progression (employment earnings in the years after landing) is not as robust as it is for skilled immigrants.3 Nationally, earnings of FSW class immigrants grow faster than those of provincial nominees. By the fifth year after landing, FSWs’ annual earnings are on average $2,000 to $7,000 higher than those of provincial nominees.4

Recommendation 10-3: Advocate the federal government for a greater provincial role in immigrant selection to ensure that the level and mix of immigrants coming to Ontario is optimized to support economic prosperity and improve outcomes for immigrants. Barring success, advocate for an expanded Provincial Nominee Program.

Ontario’s refugee population must also be considered in the context of Ontario’s overall immigration levels and the skills required to support economic and labour-market growth. In 2010, Ontario received 56.3 per cent of all refugees accepted into Canada. The incidence of social assistance attachment for refugees is substantial,5 at a considerable cost for society and the provincial treasury. Studies have shown that refugees experience much higher rates of unemployment, part-time employment and temporary employment than do Canadian-born individuals.6 Refugees are also less likely to have their credentials recognized in Canada.7 Refugees have complex needs and typically require more supports than other classes of immigrants. Although they receive initial federal support, provincial social services are unavoidably required.

Moreover, refugee claimants — those who request asylum upon landing in Canada — are not eligible for such federally funded services as language instruction and information and referral services, and thus rely directly on provincial supports until their immigration status is settled. In 2010, Ontario received 65 per cent of refugee claimants who arrived in Canada.

Recommendation 10-4: Press the federal government to be more transparent in its refugee policies and practices and to compensate Ontario for the costs of providing additional social supports to refugees and refugee claimants.

Immigrant Integration

Labour-Market Performance

Immigrants were among the groups hardest hit by the recent global recession. During the peak of the economic downturn (from 2008 to 2009), landed immigrants lost almost 55,000 jobs (33.0 per cent of all jobs lost in Ontario) though they made up only 28.9 per cent of the labour force in 2009. The overall employment level for all immigrants in 2010 was still below the 2006 level. In particular, very recent immigrants (in Canada for five years or less) were the most adversely affected by the global recession, registering employment losses in each of the last three years (2009, 2010 and 20118). In the first three quarters of 2011, Ontario’s unemployment rate for very recent immigrants remained among the highest in Canada (15.7 per cent), behind only Quebec (18.6 per cent).

However, even before the recent global recession, there were negative trends in immigrant labour-market performance, compared to previous cohorts.

Employment levels among immigrants in Ontario hardly changed from 2006 to 2010. Ontario accounted for 36.7 per cent of new immigrants (aged 15 and over) in Canada during that period, but only 15.6 per cent of national immigrant employment growth.

TABLE 10.2 Distribution of Landed Immigrant Employment and Population Growth, Age 15+
(2006 to Year-to-Date 2011)
  Atlantic Provinces Que. Ont. Man. & Sask. Alta. B.C.
Share of Population Growth (Per Cent) 3.1 19.9 36.7 7.2 19.8 13.3
Share of Employment Growth(Per Cent) 3.3 27.3 15.6 11.3 31.9 10.7
Year to date = January to September.
Source: Statistics Canada, Labour Force Survey.

Immigrants to Ontario tend to be better educated than people born in Canada. Among very recent immigrants (five years or less) between the ages of 25 and 54, 76 per cent have a post-secondary certificate, diploma or university degree as of 2010, compared to 65 per cent of the Canadian-born Ontario population in the same age category. Despite high educational attainment, recent immigrants’ earnings remain well below those of Canadian-born citizens.

A recent study found that although federally selected economic immigrants have consistently higher earnings levels than any other category among both males and females, overall the earnings gap between immigrants and Canadian-born workers has been growing.9 Data from the Labour Force Survey show average weekly wages of very recent immigrants in Ontario (here for five years or less) were 23.9 per cent below those of Canadian-born workers in 2010, up from 20.6 per cent in 2006. The earnings gap between university-educated immigrants and their Canadian-born counterparts is even more startling: in 1995, the gap stood at $24,437 annually; by 2005, this figure had grown to $27,020.10

TABLE 10.3 Average Weekly Earnings Lower for Landed Immigrants in Ontario
  2006 2007 2008 2009 2010
Total $766.16 $784.58 $814.88 $830.86 $848.00
Total landed immigrants 759.55 780.38 796.17 802.53 818.43
Very recent immigrants, 5 years or less 610.72 597.78 636.75 626.53 654.63
Recent immigrants, 5+ years 782.77 808.92 822.42 828.47 841.06
Recent immigrants, 5 to 10 years 714.02 706.70 747.61 734.58 733.95
Established immigrants, 10+ years 799.08 834.23 840.52 849.01 865.29
Non-landed immigrants 734.62 712.07 772.81 786.25 823.65
Born in Canada 769.62 787.98 823.12 842.75 860.04
Source: Statistics Canada, Labour Force Survey.

Recent immigrants are also more likely to live in poverty. Nearly one-quarter (23.8 per cent) of immigrants who had been in Ontario for less than five years were considered low income in 2009, much higher than the overall low income rate of 13.1 per cent. Even among those in the province for less than 10 years, nearly one in five was living in poverty (19.1 per cent).

Other Integration Issues

Apart from current economic conditions, Ontario immigrants face a number of persistent integration challenges that prevent them from performing well in the labour market. The increased susceptibility of immigrants to low-income status suggests that they are having a more difficult transition into the labour market. Two of the key drivers of labour-market success for immigrants are a working knowledge of one of Canada’s official languages and educational credentials that are accepted by regulatory bodies and potential employers.

Many immigrants arrive with valuable education and work experience, but often face barriers that impede recognition of their credentials and work experience. This has negative consequences for their labour-market performance and broader integration within Canadian society. Potential contributing factors include the relevance of foreign education to the needs of the Canadian labour market, linguistic ability in English or French, and entry requirements for some trades and professions.

Language is one of the greatest barriers for immigrants seeking employment or pursuing further education or training. Knowledge of English or French is crucial to an individual’s job search and the process of professional, trade or academic accreditation.11 Citizenship and Immigration Canada’s (CIC) “Facts and Figures 2010” indicated that about 25.3 per cent of landed immigrants to Ontario had no English or French language capability. The International Adult Literacy and Skills Survey (IALSS) 2003 results also confirm that knowledge of an official language (as measured by the mother tongue of the immigrant) is favourably associated with literacy performance. Recent proposed changes to the FSW program would increase points for official language proficiency and younger applicants, place less emphasis on work experience obtained abroad, and require mandatory third-party educational credential assessment. The proposed change to the language proficiency requirement is a good first step towards attracting immigrants who can more successfully integrate into Ontario’s economy. 

If employers and the regulatory bodies for the professions and trades do not recognize foreign credentials and work experience, the result can be underutilization of the “human capital” of many immigrants who were selected for their skills, work experience and other socio-demographic characteristics.12 To address a similar problem, in 1999 the Australian government instituted the pre-application skills assessment. This requires that prospective applicants’ overseas qualifications be reviewed by the appropriate domestic body for regulated professions or by Trades Recognition Australia for skilled trades prior to applying for a visa. The assessment is valid only for the purpose of immigration as registration and licensing are still required upon arrival. Six years after this program commenced, labour-force attachment of recently arrived skilled migrants had increased from 76 per cent to 83 per cent.13

Recommendation 10-5: Advocate for the federal government to undertake a pilot program equivalent to Australia’s pre-application skills assessment.

Over the past decade, the Ontario government has made significant investments in programs and services to help newcomers settle, receive language training, and become job-ready and licensed in their field. The value of these investments should be leveraged against complementary services already offered through Employment Ontario, such as those under the Canada-Ontario Labour Market Agreement that focus on literacy and essential skills.

Recommendation 10-6: Streamline and integrate provincially delivered integration and settlement services for recent immigrants with Employment Ontario.

As noted in Chapter 9, Employment and Training Services, this should be carefully sequenced to ensure no drop occurs in service quality during the transition.

TABLE 10.4 Integration Program Funding, by Level of Government*
($ Millions)
  Ontario
2010–11
Federal
2010–11
Bridge Training Programs 39.1 36.2
Newcomer Settlement Programs 6.3 156.6
Language Training 66.3 158.9
International Medical Graduate Training 85.3 N/A
Other 2.5** 58.6***
Total 199.5 410.3
* Note: Immigrants also benefit from a wide range of other programs offered by provincial ministries (e.g., Ministry of Education, Ministry of Health and Long-Term Care).
**Includes Language Interpreter Services (LIS).
***Program and Policy Development Funding.
Source: Ontario Ministry of Citizenship and Immigration.
TABLE 10.5 Overview of Ontario Settlement Programs

Program

Overview

Bridge Training

 

 

  • Labour-market integration initiatives such as Ontario Bridge Training programs and OPS Internship Program for Internationally Trained Individuals.
  • The Toronto Region Immigrant Employment Council accelerates entry of skilled immigrants to the workplace by encouraging employers to set up programs such as internships, mentoring and co-op placements.

Language Training

 

  • Adult non-credit English and French as a second language training (ESL/FSL).
  • Specialized Language Training Pilot Project where school boards across Ontario are offering job-specific language training in one of two ways:
    • Language Training for the Workplace (LTFW)
    • Language Training in the Workplace (LTIW).

Credential Recognition

  • The Fair Access to Regulated Professions Act and establishment of the Fairness Commissioner ensure the licensing process of immigrants is transparent, open, fair and efficient.
  • Global Experience Ontario helps internationally trained and educated individuals find out how to qualify for non-health regulated professional practice in Ontario.

Foreign Students

  • On Sept. 14, 2010, the Ontario government announced that international students with a master’s degree will now be able to apply for permanent residency without a job offer under the Opportunities Ontario: Provincial Nominee Program.

Source: Ontario Ministry of Citizenship and Immigration.

The first immigration agreement between the federal and Ontario governments — the 2005 Canada-Ontario Immigration Agreement (COIA) — provided an infusion of new funds to help newcomers settle and learn or improve their English or French language skills. However, the government of Ontario has noted that the federal government has not kept its commitment to spend all the funding allocated to Ontario. To date, the federal government has underspent its commitment through the COIA by more than $220 million.

TABLE 10.6 Federal Spending in Ontario under the Canada-Ontario Immigration Agreement since 2005–06
($ Millions)
  Funds Promised Actual Funds Spent Spending Shortfall
  Base Allocation COIA Allocation Total Promised
Under COIA      
2005–06 108.0 50.0 158.0 111.2 46.8
2006–07 108.0 115.0 223.0 169.3 53.7
2007–08 108.0 185.0 293.0 241.0 52.0
2008–09 108.0 250.0 358.0 317.5 40.5
2009–10 108.0 320.0 428.0 413.6 14.4
Total 540.0 920.0 1,460.0 1,252.6 207.4
COIA Extension (2010–11)    
2010–11 108.0 320.0 428.0 410.3 17.7
Source: Ontario Ministry of Citizenship and Immigration.

Even with these investments, immigrants struggle in the current economic environment and continue to find it difficult to integrate into the Ontario economy. Achieving the full benefits of immigration to Ontario requires not only that we refine the selection process but also that we take more effective measures to facilitate the economic integration of new immigrants. Ontario should push for greater policy control and full funding support for immigrant settlement and integration through the next COIA. We are optimistic that the recent collaboration between the two governments through the Federal Skilled Worker Program Backlog Reduction Pilot may signal that we are embarking on a new, more co-operative era in Canada-Ontario immigration policy.

A new COIA will ideally include devolution of settlement and integration services. This will allow the province to reduce duplication and help immigrants get services they need when they need them, and allow service providers to spend more time helping immigrants and less on administration.

With devolved settlement funding, the province will be better positioned to address the needs of recent immigrants. In the coming year, Ontario should continue to build a business case for devolution of settlement and integration services by working with key stakeholders, as it considers its approach for the next negotiations with the federal government.

Recommendation 10-7: Advocate for devolving federal immigrant settlement and training programs to the province with an appropriate funding mechanism, similar to those established in British Columbia and Manitoba.

1. Naomi Alboim, “Adjusting the Balance: Fixing Canada’s Economic Immigration Policies,” 2009, A Maytree Report; Citizenship and Immigration Canada, “Evaluation of the Federal Skilled Worker Program,” 2010, downloaded from http://www.cic.gc.ca/english/pdf/research-stats/FSW2010.pdf.

2. “BC Provincial Nominee Program Evaluation Report,” 2011, Ministry of Jobs, Tourism and Innovation.

3. Stan Kustec and Li Xue, “Recent Immigrant Outcomes — 2005 Employment Earnings,” 2009, Citizenship and Immigration Canada.

4. David Kurfurst, “Evaluation of the Provincial Nominee Program,” 2011, Citizenship and Immigration Canada.

5. Don DeVoretz, Sirgiy Pivnenko and Beiser Morton, “The Economic Experience of Refugees in Canada,” 2004, Institute for the Study of Labor.

6. Harvey Krahn, Tracey Derwing, Marlene Mulder and Lori Wilkinson, “Educated and Underemployed: Refugee Integration into the Canadian Labour Market,” Journal of International Migration and Integration, 2000.

7. Rene Houle and Lahouaria Yssaad, “Recognition of Newcomers’ Foreign Credentials and Work Experience,” 2010, Statistics Canada.

8. Year to date: January to September.

9. Michael G. Abbott and Charles M. Beach, “Do Admission Criteria and Economic Recessions Affect Immigrant Earnings?” 2011, Institute for Research on Public Policy.

10. D. Drummond, and F, Fong, “The Changing Canadian Workplace,” TD Economics, TD Bank Financial Group, 2010, p. 8,
downloaded from http://www.td.com/document/PDF/economics/special/td-economics-special-ff0310-canlab.pdf.

11. Shirley B. Seward and Kathryn McDade, “Immigrant Women in Canada: A Policy Perspective,” Canadian Advisory Council on the Status of Women, 1988; Fernando Mata, “The Non-Accreditation of Immigrant Professionals in Canada: Societal Dimensions of the Problem,” Department of Canadian Heritage, 1999, downloaded from http://canada.metropolis.net/research-policy/conversation/MATAPAPER.html.

12. Monica Boyd and Grant Schellenberg, “Re-Accreditation and the Occupations of Immigrant Doctors and Engineers,” 2007, Statistics Canada; Monica Boyd and Derrick Thomas, “Skilled Immigrant Labour: Country of Origin and the Occupational Locations of Male Engineers,” Special Issue on Migration and Globalization, Canadian Studies in Population 29 (2002) pp. 71–99; Sarah V. Wayland, “Unsettled: Legal and Policy Barriers for Newcomers to Canada,” 2006, Law Commission of Canada.

13. B. Birrell, L. Hawthorne and S. Richardson, “Evaluation of the General Skilled Migration Categories,” 2006, Australia Department of Immigration and Citizenship.