Pedro Barata, Steven Tobin Policy Options December 13, 2022
The federal government recently announced a significant increase in immigration targets for the next three years – welcoming almost 1.5 million people between 2023-25. The plan aims to address continuing labour shortages and attract newcomers across Canada, including rural communities. It builds on Canada’s well-earned reputation as a nation of immigrants building cohesive communities and driving economic prosperity. This announcement places greater emphasis on the needed skills that will be essential for our economy into the future.
By putting more weight on skills as a lens for immigration, Canada can better match the economy’s demands with newcomer talent. The current immigration system falls short in this respect. Employers are scrambling for skilled labour, yet many newcomers are underemployed. It is estimated that highly educated newcomers lose out on up to $12.6 billion in wages a year due to underemployment – also called “brain waste.”
The latest figures from Statistics Canada reveal that nearly one-quarter of our 2021 population were, or had been, a landed immigrant or permanent resident. Meanwhile, more than four-fifths of our labour force growth stems from immigration. Newcomers account for more than 100 per cent of that growth in some provinces – especially in Atlantic Canada, where labour force growth from natural population increases has already declined or slowed considerably.
Tomorrow’s workforce will depend greatly on attracting talent from outside Canada. The pandemic-induced labour market changes – an exodus of baby boomers who retired from the workforce and other factors such as technological changes — underscore the need for more attention to skills in our workforce development policies.
Yet, our immigration system fails to do an assessment of skills, let alone those required into the future. We believe that Canada needs a system that selects economic migrants, at least in part, based on skills. Such an assessment could consider a range of in-demand skills including technical, cognitive and social-emotional skills that aim to enhance the success of newcomers while improving the long-run competitiveness of Canadian businesses.
Several streams allow newcomers to enter Canada, the most prominent being the Federal Skilled Worker program, the Federal Skilled Trades program and the Canadian Experience Class. None of these evaluate potential newcomers’ skills beyond basic or essential criteria. They all require applicants to demonstrate literacy skills, but most criteria relate to education, experience and age, which are not necessarily the best indicators of skills.
Our system has relied on a credentials-based point system since 1967, but that approach has its limitations. Increasingly, it is no longer simply the degree you have that will determine your career success, but rather whether you have the right skills that we’re going to need in the future.
For instance, a recent study on the transition to a net-zero economy underscored the importance of critical thinking and complex problem-solving skills as central to supporting workers in the future. The immigration selection process should focus to a greater extent on assessing these and other future skill needs.
Currently, only one part of the skilled worker program allocates 10 of 100 points to “adaptability.” However, it is largely based on applicants’ education and language, and that is a very narrow approach to measure adaptability to new conditions. With almost 1.5 million newcomers set to arrive over the next three years, efforts must be taken to embed a skills-based approach to selecting economic migrants.
This starts by developing a system which identifies those skills most likely to create better outcomes for businesses and individuals. Here, employers are central to the solution of better understanding the needs of the economy. A system of immigration selection that is in part based on in-demand skills would produce higher retention rates for employers and jobs that utilize the full skill sets of newcomers. The Immigrant Employment Council of B.C. ‘s Facilitating Access to Skilled Talent (FAST), an online skills assessment and development platform, provides a starting point.
Alongside an improved and more relevant selection process, efforts to improve the settlement process are needed. Fostering collaboration among different actors is key. Silos now exist between service organizations, academic institutions, employers, trainers and newcomer associations. Partnerships will be vital in more effectively supporting newcomers. Early intervention is also crucial to ensure that newcomers have access to practical and valid pathways for skill recognition and employment.
In some cases, pre-arrival engagement may be needed. This can start by enhancing immigrant settlement, which includes greater support related to housing, child care, health care and newcomer integration.
A skills-based approach to immigration, coupled with additional improvements to newcomer settlement, holds the promise of improved workforce resilience, better matching between employer demand and newcomer talent supply, and reduced levels of underemployment among immigrants.