David Olive: Too many of Canada’s most educated workers end up in survival jobs. There’s a fix - Toronto Star

A new report argues that fixing employment barriers for skilled immigrants is an economic imperative.

Leaving newcomers to make the transition to an unfamiliar country without support comes at an avoidable cost to newcomers and the economy, David Olive writes.

David Olive is a Toronto-based business columnist for the Star.

Canada needs to reform its immigrant selection process to improve labour market outcomes of newcomers. The reform would strengthen the economy by raising productivity.

A recent report by the C.D. Howe Institute calculated that Canada might be underusing the talent that newcomers bring to this country. The report found that the outstanding educational credentials for which candidates are selected for permanent resident status in Canada can disguise a lack of basic skills, most notably literacy, that can lead to poor-paying and even demeaning jobs for immigrants.

The report tackles a familiar but long-neglected anomaly. Why is it that immigrants, who are among the most highly educated people in the country, are often consigned to low-skill, low-pay work for which they are overqualified and that among newcomers is commonly described as “survival jobs?”

Immigrants are more likely than native-born Canadians to hold a university degree. They promptly find work in Canada, yet they are overrepresented in low-wage sectors.

A recent report by the Canadian Centre for Policy Alternatives analyzing 2025 Labour Force Survey data found that immigrants working in the public sector with 10 years or more experience in Canada were on average paid 6.5 per cent less than their non-immigrant counterparts. For immigrants working in the private sector, the gap was even wider, at 9.4 per cent.

The C.D. Howe report found that immigrants aged 25 to 65 are employed at about the same rate as non-immigrants. But newcomers are more likely to report that the only jobs available to them are unfulfilling and have no job promotion potential. The same report suggests that some prospective employers turn down job applicants with impressive education and vocational credentials out of concern about their language skills.

In so-called “people-facing” jobs — those that require working with customers or being adept at teamwork — a job applicant must be fluent in the language of the workplace, while a person working in the back office of that establishment might get by without perfect fluency.

The report, released on Oct. 27 and prepared by Parisa Mahboubi, associate director of research at the C.D. Howe Institute, sees correction of this problem as a means of maximizing the potential of newcomers to the benefit of the economy.

The report examined data from an international survey conducted between September 2022 and July 2023 by the Organisation for Economic Co-operation and Development. The survey was based on the rigorous Programme for the International Assessment of Adult Competencies (PIAAC) and assessed adults aged 16 to 65 in literacy, numeracy and adaptive problem-solving.

On average, immigrants aged 25 to 65 scored 22 points lower than non-immigrants in the 2023 PIAAC literacy test. But immigrants whose home language matched the test language, including English and French, came within four points of parity with non-immigrants.

For immigrants with suboptimal literacy skills, “the consequences are likely to show up as lower earnings for immigrants and forgone productivity for the broader economy,” the report said.

Canada’s Express Entry system for selecting candidates for permanent resident status is generally lauded for its fairness. “Canada’s economic immigration system is designed to select newcomers who can integrate quickly and successfully into the labour market,” the report says. “Yet questions persist about whether immigrants’ educational qualifications and skills translate into positive labour-market outcomes once they arrive.”

Express Entry awards points for higher education, on the assumption that a university degree connotes strong skills across the board, including social skills.

But that’s not always the case. “For immigrants, educational credentials alone may overstate literacy proficiency relative to the same credentials held by non-immigrants,” the report says.

That’s a fixable deficiency in the immigrant selection and integration system.

For instance, the report suggests that an important start in closing the skills gap would be to raise the Express Entry program’s maximum language threshold and put greater emphasis in candidate selection on official-languages proficiency.

It also says that “the lower earnings and occupational outcomes of immigrants with foreign credentials, which persist after accounting for measured skills, support continued efforts toward faster and more consistent credential recognition and employer-side measures.”

That recommendation applies, or should apply, to native-born Canadians and newcomers alike. The former are also stymied when their out-of-province or foreign credentials aren’t promptly recognized.

Finally, “because many immigrants are not selected based on language skills, post-arrival support remains important, particularly employment-focused language training,” the report says. “The effectiveness of existing programs should be rigorously evaluated so that resources go to those that improve outcomes.”

That post-arrival support can be mandatory, no-cost ESL or French-language programs that teach the all-important nuances — the slang and idioms — that convey advanced fluency.

In many ways, the report’s recommendations are simply valuable suggestions for improving the efficacy of the system, rather than calls for radical change. The alternative of leaving newcomers to make the transition to an unfamiliar country without support comes at an avoidable cost to newcomers and the economy.

Opinion articles are based on the author’s interpretations and judgments of facts, data and events. More details

David Olive is a Toronto-based business columnist for the Star.