Do Canada Immigrants Plug Labour Gaps Or Underuse Their Skills?

Canada’s immigration system was designed to meet the nation’s labour market needs, particularly through economic immigration programs like the Provincial Nominee Program (PNP) and Express Entry. These programs aim to fill skill shortages, but their efficacy in addressing labour market challenges is debatable. The question is whether recent immigrants fill the proper gaps or underutilize their skills.

What You Will Find In This Article

• Canada’s immigration system aims to meet labour market demands, but many skilled immigrants end up in lower-skilled jobs, underutilizing their expertise.
• Immigrants are underrepresented in middle-skilled technical and trades roles, which are essential for Canada’s growing economy, particularly in construction and infrastructure.
• Immigrants are more likely than Canadian-born workers to be employed in high-skilled professions like engineering and IT, critical for Canada’s economic growth.
• Despite high demand in healthcare, immigrants face long delays in credential recognition, leading many to work in lower-skilled healthcare support roles.
• The study highlights gaps in Canada’s immigration policy, revealing the need for balanced recruitment across high- and middle-skilled occupations to address labour shortages.

The findings of a Statistics Canada study look at the skill level and occupations of recent immigrants – specifically those who landed in 2018 or 2019 – and their employment outcomes in May 2021. The study also incorporates data from the March 2024 Labour Force Survey (LFS), offering insights into more recent trends in the labour market for immigrants.

Immigration framework

Since the points-based system was introduced in 1967, Canada’s immigration framework has prioritized economic immigrants with specific skill sets. The rise of the PNP in the 2000s took this further by allowing provinces to tailor their immigrant numbers to local labour market needs. In theory, this system ensures that immigrants complement Canadian-born workers, addressing skills shortages without displacing existing employees.

However, this ideal is often only partially realized. While the Canadian immigration system selects many highly skilled workers, the study finds many immigrants end up in lower-skilled or labourer jobs. In May 2021, 35 percent of recent immigrants were employed in such roles – almost as many as the 40 percent working in higher-skilled occupations. These figures suggest that contrary to popular belief, Canada’s immigration system does not primarily supply highly skilled labour.

Trades and technical roles

One notable finding is that immigrants are significantly underrepresented in middle-skilled technical and trades occupations despite these roles being critical to Canada’s economy. For example, immigrants are far less likely to work in industrial, electrical, and construction trades than their Canadian-born counterparts. About 25 percent of recent immigrants were employed in these fields, compared to 35 percent of Canadian-born workers.

These figures are not encouraging, given the recent increase in Canada’s population and the resultant spike in demand for housing and infrastructure. Trades workers, such as electricians, carpenters, and construction labourers, are essential to meeting this demand. Yet, the immigration system has not admitted enough skilled workers in these areas.

Strong presence in higher-skilled professions

However, recent immigrants have a strong presence in certain higher-skilled professions. The study shows that immigrants are more likely than Canadian-born individuals to work in engineering and computer and information systems professions. Immigrants who arrived in 2018 or 2019 were almost five times as likely to work in computer and information systems roles and twice as likely to be employed as engineers.

These fields are critical to Canada’s economic growth and innovation, particularly as technology transforms the global economy. If highly skilled immigrants can work in these professions, the influx could help Canada remain competitive in the international market, particularly in the tech sector.

Healthcare sector

While immigrants have found success in some higher-skilled professions, the healthcare sector presents different challenges. The study reveals that recent immigrants are underrepresented in nursing professions and face significant recruitment difficulties in Canada. The COVID-19 pandemic and the country’s aging population, which has increased the demand for healthcare services, exacerbated the shortage of nurses.

Part of the issue is the time immigrants take to become professional nurses in Canada. Many immigrants with nursing qualifications face long waiting periods for credential recognition and registration. However, the study shows that earlier immigrant cohorts (those who landed before 2018) are more likely to be employed as professional nurses, suggesting that immigrants eventually transition into these roles after a significant delay.

Recent immigrants are more likely to work as nurse aides, orderlies, and patient service associates – occupations that support registered nurses but require lower levels of formal education and training. This trend may indicate that immigrants with healthcare experience are taking on these roles as stepping stones while they navigate the complex process of becoming fully licensed nurses in Canada.

Canada’s immigration policies aim to fill specific labour shortages and drive overall economic growth. Immigrants contribute to the economy by participating in the workforce, spending on goods and services, and increasing demand for housing and infrastructure. This economic activity, in turn, can generate new demand for occupations such as trades and healthcare workers.

Programs and occupational selection

The study highlights the selection of immigrants by occupation. The Express Entry program, for example, includes a list of eligible occupations ranging from healthcare professionals and trades workers to engineers and IT specialists. Provincial Nominee Programs (PNPs) also prioritize in-demand occupations, often focusing on middle- and higher-skilled roles.

However, some provinces also seek immigrants for lower-skilled occupations, such as material handlers, cooks, and janitors. The inclusion of lower-skilled occupations in immigration programs has sparked debate among economists and policymakers. Some argue that lower-skilled immigrants are more vulnerable to economic shocks, such as unemployment, and that immigration policies should focus on higher-skilled workers more likely to contribute to long-term economic growth.

In May 2021, the family class accounted for almost a third (27 percent) of recent immigrants employed full-time in lower-skilled occupations. While these jobs typically require only a high school education, roughly half of recent immigrants had a university degree. Taking these jobs suggests that even with the degrees, they cannot contribute meaningfully at their skill level to the Canadian economy.

Labour market needs

This study offers valuable insights into the skill levels and occupations of recent immigrants in Canada, challenging some common assumptions about the country’s immigration system. While immigrants are well-represented in higher-skilled professions like engineering and computer systems, they are underrepresented in critical middle-skilled trades and healthcare roles. As Canada continues to rely on immigration to meet its labour market needs, policymakers must address these gaps to ensure that immigrants can fully contribute to the economy.

The findings of this study underscore the need for a more nuanced approach to immigration policy – one that balances the demand for both higher- and lower-skilled workers and considers the time it takes for immigrants to integrate into certain professions. Future research could focus on the role of non-permanent residents in the labour market, as this group is becoming increasingly important in Canada’s immigration landscape.