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7.5 Million Immigrants Create Opportunities and Challenges for Canada

Oct 26, 2017
Kareem El-Assal
Kareem El-Assal
Senior Research Associate and
Senior Network Manager, Immigration

The release of census data makes researchers and policy-makers feel as excited as children waking up on Christmas Day. Yesterday’s 2016 Census release provides us with a better sense of the characteristics of Canada’s immigrants. As a new Conference Board study shows, Canada’s deaths will cancel out births within the next 15 years or so; therefore, immigration is set to account for all of the country’s population and labour-force growth. This means that immigration will become even more important to Canada’s prosperity.

Canada’s Increasing Diversity

In 2016, 22 per cent of Canada’s population (or 7.5 million people) were immigrants, compared with 21 per cent in 2011 and 20 per cent in 2006. Canada’s diversity will only rise as it ramps up its immigration levels. Last October, the federal government announced that Canada will welcome at least 300,000 immigrants per year, an increase of some 40,000 immigrants compared with Canada’s newcomer intake during the previous decade. This increase aims to offset the economic and fiscal challenges expected to arise from to the country’s aging population and low birth rate. Statistics Canada forecasts that immigrants could constitute up to 30 per cent of the country’s population by 2036.

Diversity Poses Opportunities and Challenges

More of Canada’s newcomers are arriving from Asia and the Middle East, and fewer are coming from historic source countries such as the United States, the United Kingdom, and France. Between 2011 and 2016, some 39 per cent of Canada’s newcomers arrived from the Philippines, India, and China.

This change in source countries poses both opportunities and challenges for Canada. On the one hand, it provides Canada with the opportunity to strengthen its economic and cultural ties around the world. This could yield significant economic benefits for Canada if it improves its business linkages with emerging markets. But it also creates challenges in terms of effectively integrating newcomers into the economy.

Income Trends Are Worrying

The 2016 Census shows that the average annual income for Canadian-born workers is about $50,000 versus $43,000 for immigrants. This is unsurprising in light of the labour-market hurdles that immigrants experience, as well as the fact that about 40 per cent of newcomers are admitted for non-economic reasons. What is worrying, however, is that immigrants who have arrived since 1991 earn less, on average, than immigrants who arrived prior to that time. This is largely a function of the changing source countries of immigrants, since Canadian employers and regulatory bodies find it challenging to evaluate foreign education and work experience. As a result, the Conference Board estimates that immigrants forego up to $12.7 billion in annual income due to difficulties finding jobs commensurate with their skills. Canadian policy-makers have recognized this challenge and have made significant reforms to improve the incomes of immigrants.

The Economic Class Leads the Way

The most significant shift Canada has made to boost the economic impact of immigration has been its decision to increasingly select immigrants based on their skills, while reducing the share of admissions based on family ties or humanitarian need. The economic class accounted for 42 per cent of Canada’s admissions between 1980 and 1990, but now makes up 60 per cent of admissions. Canada will likely continue to select the lion’s share of its immigrants for economic purposes to help replace the growing wave of retiring baby boomers.

The Last Great West

Shortly after Confederation, Canada sought to lure immigrants to its Prairie provinces by branding the region as the “Last Great West.” As Canada celebrates its 150th anniversary, it has been able to lure more immigrants west with less flourish. Alberta has surpassed British Columbia to become the third-most-popular destination for Canada’s immigrants behind Ontario and Quebec, with one in six immigrants calling the province home. Alberta has seen its immigrant population more than double since 2001 due to its booming economy during much of this period. Manitoba and Saskatchewan have also seen their immigrant populations grow significantly: Manitoba’s has tripled and Saskatchewan’s has quadrupled since 2001, due to their strong economic performance and their reliance on the Provincial Nominee Program to recruit more newcomers.

About 2 per cent of Canada’s newcomers settle in Atlantic Canada. As a recent Conference Board study shows, this number will need to increase in order to improve the region’s economic and fiscal situation. The federal government and stakeholders in the region are seeking to achieve this. For instance, the federal government launched the Atlantic Immigration Pilot in March 2017, which aims to increase economic-class admissions in the region by up to 50 per cent this year.

Diversity Is a Reality

Canada must address some key issues to continue to benefit from diversity. It needs to ensure that its domestic population continues to have access to economic opportunities and good social welfare programs so that quality of life remains high. At the same time, Canada needs to identify how it can improve the economic integration of newcomers. This entails making strategic investments in immigrant settlement programs and infrastructure (e.g., affordable housing).

You can learn more about the 2016 Census results here.

Check out the Agenda for the 2018 Canadian Immigration Summit!

In May 2018, the Conference Board will host our fourth annual Canadian Immigration Summit in Ottawa. The agenda is now available.

Join hundreds of Canadians, including immigration ministers, business leaders, lawyers, consultants, researchers, and service-provider organizations to network and discuss how we can work together to improve our immigration system.

Use promo code PRM3 by October 31 to save $100 off our regular rate for the summit.

Metropolis North America Migration Policy Forum: November 16–17, 2017, Washington, D.C.

The Conference Board will be participating in a special conference in November to discuss immigration cooperation among Canada, the United States, and Mexico.

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Kareem El-Assal
Senior Research Associate and Senior Network Manager, Immigration

Jo-Leen Folz
Administrative and Meetings Coordinator, Economics
613-526-3280 ext. 493