One of the quiet strengths of Canada’s immigration system last decade was the job market’s ability to readily absorb recent immigrants.
Now, as a record influx of temporary foreign workers prompts the federal government to overhaul its immigration policy, much of the focus is on the pressure the population boom has put on housing, infrastructure and services. But recent immigrants themselves have been big losers in the job market.
The unemployment rate for immigrants who arrived within the past five years rose to nearly 13 per cent in July, which was seven percentage points higher than the unemployment rate for workers born here. Aside from the early months of COVID-19, that’s the largest unemployment gap for recent immigrants in more than a decade, Bank of Montreal senior economic Robert Kavcic wrote in a research note.
“The reality now is that the current rate of inflow is not getting readily absorbed, which is doing no favour to the domestic job market (see youth unemployment), and no favour to those coming to Canada,” he wrote.
It’s a stark reversal from what had been a shining feature of the Canadian immigration experience. Starting in the early 2010s the unemployment rate for newcomers who arrived within the previous five years began to fall faster than the unemployment rate for Canadian-born workers, which itself was also on the decline. In fact, by 2018 immigrants who’d arrived within the previous five years were more likely to be employed than native-born Canadians.
A similar though less pronounced improvement unfolded for immigrants who’d landed five to 10 years earlier, which has since reversed. Meanwhile, by the time immigrants are here for more than a decade, their unemployment rate is largely indistinguishable from that of native-born workers.
Decoder is a weekly feature that unpacks an important economic chart.