Immigration in Canada – Its system can catch up with its competitors

Michel Cournoyer

February 26

Parisa Mahboubi is a Senior Policy Analyst and leads the C.D. Howe Institute's human capital policy program. Her research interest focuses on social policy with a concentration on demographic, skills, education, and labour market concerns. In addition to authoring research studies, she regularly writes a column for the Globe and Mail's business section.

The study in brief

Canada's immigration point system is designed to select skilled immigrants who have the potential to contribute to the country's economic growth and meet its evolving skills needs. However, Canada faces challenges in fully leveraging increased immigration levels to enhance the well-being of Canadians due to weaknesses in capital investment and a quantity/quality trade-off in selecting economic immigrants. Furthermore, recent reforms may work at cross purposes to this goal. They include category-based selection that targets low-paying occupations, which can discourage capital investment, and a recent surge in the number of temporary residents in low-wage jobs that also may have adverse effects on the quality of potential candidates for permanent residency.
This study compares skilled immigration selection policy in Canada, Australia, New Zealand, and the UK, with the objective of identifying key areas for improvement in Canadian policy. The skilled immigration point systems in Canada and Australia share some similarities, with both prioritizing a two-step immigration process, placing an emphasis on English proficiency and workforce age, and requiring pre-migration credential and English proficiency assessments. However, the two countries differ mainly in their strictness of criteria and their emphasis on occupational and language skills. Furthermore, Australia has shown more agility and creativity in its skilled migration reforms. Reforms in the UK and New Zealand have also put them ahead in the competition for talent.
Based on this international comparison, the author makes recommendations for improvement. They include: 1) Setting a Minimum Points Threshold for Eligibility. As it is, Canada imposes no minimum points threshold for eligibility in its Express Entry points-based system. 2) Considering a Pre-admission Earnings Factor. Studies show the importance of pre-immigration earnings in predicting immigrants' outcomes after arrival. The UK, New Zealand and Australia include this factor. 3) Boosting Standards under the Language Requirement. Official language skills are as important in predicting the initial earnings of principal applicants admitted under Canada's Express Entry system as pre-immigration Canadian work experience, and even more important than educational level and age at the time of immigration. 4) Raising Business Immigration Numbers. Canada faces the challenge of weak business investment but is failing to select business immigrants with entrepreneurial skills, putting it at a disadvantage compared to competitors like Australia and the UK.