Canada’s workforce is renowned worldwide for its high skill level, owing not only to the country’s exceptional educational institutions but also to the contributions of highly skilled newcomers who arrive in Canada annually. These newcomers significantly bolster the Canadian labor force and drive economic growth. However, the question remains: How successful are newcomers in finding employment in Canada over the short, medium, and long term?
A recent study conducted by Statistics Canada, spanning from March 2006 to July 2023, provides valuable insights into unemployment rates among various immigrant groups, shedding light on the labor market experiences of newcomers in the country
Landed Immigrants: Between 2006 and 2023, landed immigrants in Canada experienced an average unemployment rate of 7.7%. This rate reached its peak in June 2020 at 14.6%, a surge primarily influenced by the disruptive effects of the COVID-19 pandemic. However, there was a significant improvement in June 2022 when the unemployment rate dropped to 5%.
Immigrants with Five or Fewer Years in Canada: This group faced the highest average unemployment rate, standing at 11.7% during the 17-year study period. Notably, this group exhibited significant fluctuations in unemployment rates, with a high of 17.9% in June 2020 and a low of 7.4% in August 2022.
Immigrants with Five to Ten Years in Canada: Immigrants who had been in Canada for 5 to 10 years had an average unemployment rate of 8.9% throughout the study period. This group experienced the most pronounced fluctuations in unemployment rates, with a high of 16.8% in June 2020 and a low of 4.5% in December 2022.
Immigrants with Ten or More Years in Canada: Among the studied groups, this cohort boasted the lowest average unemployment rate, standing at 6.6% over the 17-year period. Furthermore, this group exhibited the least variance in unemployment rates, with a high of 13.4% in June 2020 and a low of 4.3% in December 2022.
Understanding these Results
The study’s findings beg the question: Why do immigrants with less than five years in Canada face higher unemployment rates? Several factors contribute to this disparity. Firstly, many new permanent residents (PRs) in Canada for less than five years are pursuing education and accreditation to better align with the Canadian job market or to upskill themselves, which can lead to a period of non-employment.
Additionally, spouses and dependent children of new PRs, although of working age, may be engaged in education or managing family responsibilities, contributing to the unemployment rate. Furthermore, it’s crucial to recognize that a significant portion of new PRs counted as “landed immigrants” have already resided in Canada, often as students or temporary workers, and likely possess pre-landing Canadian work experience. This experience tends to mitigate unemployment rates within this group.
One key takeaway from this analysis is that for new PRs without pre-landing Canadian work experience, it may take time for their skills and qualifications to translate into successful labor market outcomes.
However, as the results indicate, economic immigrants without pre-landing Canadian work experience will generally see their labor market outcomes converge with those of newcomers who do have such experience, as well as with Canadian-born workers, given enough time.
Factors Impacting Labor Market Outcomes
To better comprehend what affects labor market outcomes for immigrants in different cohorts, a study released by Statistics Canada in 2022 assessed various traits that influence the success of principal applicants within the economic immigrant category. These traits include pre-landing Canadian work experience, official language proficiency, age at landing, and education level.
The study revealed that while some factors significantly impacted immigrant labor market success upon arrival (such as pre-landing Canadian work experience and language proficiency), their influence diminished as the immigrants spent more time in Canada. Conversely, the effect of age and education level at landing became more prominent as time in Canada increased.
Notably, the study’s most important finding was that the quality of pre-landing Canadian work experience played a crucial role. Immigrants who studied or worked at recognized Canadian institutions before obtaining permanent resident status had a distinct advantage in the labor market.
Importantly, the convergence of labor market outcomes among three groups – new immigrants without pre-landing Canadian experience, new immigrants with pre-landing Canadian experience, and Canadian-born workers – indicates that those without significant pre-landing Canadian experience can bridge the gap over time.
Impact of the COVID-19 Pandemic
It’s essential to acknowledge the unique challenges posed by the COVID-19 pandemic (2020-2021) when assessing these findings. During this period, average unemployment rates for most cohorts were 2-3% higher than the 17-year average. The pandemic had a significant impact on labor market dynamics, affecting both immigrants and Canadian-born workers alike.
However, despite these challenges, the study’s overarching message remains clear: over time, immigrants have the potential to integrate effectively into the Canadian labor market, contributing to the country’s growth and prosperity.
Interested in Immigrating to Canada?