Immediate labour-force needs are just part of the immigration equation

Arthur Sweetman | April 19, 2012

In the wake of the federal budget and as Immigration Minister Jason Kenney prepares to make sweeping changes, the government should take a balanced approach to reforming the economic-class immigration stream. Addressing both short- and long-term labour-market goals and focusing on highly skilled immigrants seems judicious.

Recent policy changes – notably greater use of the Temporary Foreign Worker Program, the Provincial Nominee Program and the new ministerial instructions – have shifted the focus toward the short term, responding especially to pressures to fill occupational and skills shortages.

While short-run needs obviously have a place in immigration policy, the long run also matters. European guest-worker programs were set up to fill short-run requirements, but the long-run result has been less than favourable, with the children of those migrants having considerable difficulty successfully integrating into that labour market.

In contrast, Canada is one of the world leaders in the successful economic integration of the children of immigrants – the so-called second generation – and also immigrants who arrive very young. Ensuring that this long-term success is not jeopardized by changes to the selection system should be a high priority.

However, reform is clearly needed. Over the past three decades, the labour-market outcomes of adult immigrants to Canada have deteriorated. Recent arrivals have experienced substantial declines in annual earnings and increases in poverty rates. A number of factors can explain this, including a shift in source countries, weak language skills and problems with the recognition of foreign work experience.

There are a number of avenues the government can take to address some of these challenges.

Selecting young immigrants is beneficial. In addition to improving Canada’s demographic profile, they benefit from long careers in Canada and do not suffer from losing pre-Canadian labour-market experience. Focusing on skilled immigrants – workers in skilled trades, medical technologists and those with similar occupation-specific skill sets, as well as immigrants with postsecondary and professional education – also has well-documented advantages.

Emphasizing language skills is key. The lack of strong skills in a Canadian official language can prevent newcomers from converting education into earnings.

Research also demonstrates that immigrants who are sponsored by an employer and have a job waiting for them when they arrive do better economically. Therefore, placing employersponsored immigration within the context of longer-term goals makes good sense.

Finally, we should return to reducing immigrant inflows during recessions, which was commonplace before the 1990s. During recessions, economic outcomes deteriorate more among recent immigrants than among the Canadian-born. Business-cycle-sensitive flows would improve the overall performance of immigrants and reduce the damage that can occur when newcomers can’t find work for lengthy periods of time, which may cause their skills to degrade and perhaps cause disengagement from the labour force.

Understanding the relationship between the short run and the longer run is important. New immigrants get to the long run through the short run; good labour-market outcomes in the short term may be quite important for long-term success. But short-term decisions need to be made with a view to the full life cycle and even to intergenerational consequences.

The pendulum is swinging now toward a greater emphasis on the short run, which is good. But it should not swing too far. Longer-term goals should not be overlooked, since it is the full set of costs and benefits over a lifetime that matters.

Arthur Sweetman is the Ontario Research Chair in Health Human Resources in the Department of Economics at McMaster University. He is the co-author with Garnett Picot of the IRPP’s Making it in Canada: Immigration Outcomes and Policies.

Making It in Canada

Making It in Canada

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