The Conversation was organized by Jean Kunz and Louis Grignon of the Applied Research Branch, HRDC, and Katherine Pestieau and Meyer Burstein of the Metropolis Project Team.

This report was written and compiled by Louis Grignon and Samuel A. Laryea of the Applied Research Branch, HRDC. A team of note takers including Eden Thompson, Beverly Davis, Debbi Bryson and Jorge Aceytuno, all from HRDC, also contributed to the preparation of this report. Natasha Cibischino, of the Metropolis Project Team, was responsible for the report’s lay out.

On February 12, 2001, Human Resources Development Canada together with Metropolis hosted a Conversation on the economic and social performance outcomes of immigrants. The Conversation was held in Ottawa and assembled experts from academia, federal and provincial governments and NGOs. The goals of the Conversation were twofold. First, to gain a better understanding of the labour market outcomes of recent immigrants and second, to identify policies aimed at improving these outcomes.

This report gives an overview of the Conversation. The report is in three parts. First is the text presenting the Conversation topic, i.e. the document that the participants received prior to the discussion. The second part of the report is devoted to the discussion from the Conversation itself. The discussion is divided into key themes related to the labour market performance of immigrants. This was done to better organize the discussion. The actual themes in the order of which they were discussed are: evidence on social and economic integration; what is successful integration; barriers to economic and social integration; absorptive capacity and levels; selection; integration policies; and research gaps. The final part of the report lists the names and contact information of the participants.

Canada is, on a per capita basis, the largest immigrant receiving country in the world. Immigration currently accounts for over 70 percent of labour force growth. How well and how quickly immigrants integrate into the Canadian labour market has significant implications for the overall performance of the Canadian economy, for the cohesion of Canadian society and for the welfare of the arriving immigrants and their children.

Economic and social research has noted a marked deterioration in the initial labour market performance of immigrants who came in the 1990s relative to earlier cohorts, notwithstanding the fact that their educational levels exceeded those of earlier arrivals. Compared to immigrants who came in the mid-1980s, the more recent group of immigrants, those who arrived in the early to mid-1990s experienced greater difficulty and less success in finding jobs in the initial years following their arrival. In addition, recent immigrants have experienced a decline in their level of earnings as compared with earlier arrivals. In 1985, 23 percent of recent immigrants lived in low-income families. By 1997, this rate has nearly doubled among recent immigrants to 39 percent. Not surprisingly, the proportion of recent immigrant families using social assistance rose from 7 percent in 1989 to 17 percent in 1997.

It is not yet known whether this deterioration in initial performance will result in inferior long-term outcomes or whether the immigrants who arrived in the 1990s will overcome their initial difficulties and catch-up to the Canadian-born earnings, as has occurred in the past. Similarly, it is not clear whether fundamental structural changes in the Canadian economy have changed the parameters for new labour market entrants, including newly arriving immigrants. Should the observed difficulties persist, the deterioration in the social and economic prospects facing newcomers would be cause for concern as it would, potentially, raise the spectre of an under-class linked to race, religion and ethnicity.

Conversation participants were encouraged to go beyond merely reviewing the economic research and to consider the role that public policy might play in addressing the situation.

The following questions helped to frame and focus the discussions:

• What constitutes successful labour market integration of immigrants?
• Do the outcomes vary according to the manner in which immigrants obtain entry to Canada?

• What are the main barriers that immigrants face in the labour market?

• What are the more important economic and social consequences of unsuccessful integration? Are there long term negative consequences that flow from a difficult initial entry into the labour market?

• What has been Canada’s experience in the area of immigrant labour market integration? What works and what doesn’t?

• Is the absorptive capacity of the Canadian labour market taxed by current immigration planning levels and how might that capacity be extended?

• What relationships need to be constructed with other levels of government and with the private sector in order to improve labour market outcomes? How should NGOs and regulatory bodies be involved?

The evidence points to more difficult labour market and social outcomes for recently arrived immigrants in the 1990s. These outcomes show a considerable deterioration from the outcomes that recent immigrants of earlier cohorts had experienced. However, the evidence also shows that outcomes do improve with the time since an immigrant lands in Canada. In addition, immigrants who remain in Canada appear to be happy about their decision, as a recent survey of Quebec immigrants shows. Specific points include the following:

• Poverty is becoming more concentrated and of a long-term nature for recent immigrant and refugee households. For example, while the percentage of all families (excluding the elderly) falling below the poverty line rose only slightly from 14.3% to 15.3% between 1985 and 1997, it rose sharply for recent arrivals to Canada (both immigrants and temporary residents) – from 23% in 1985 to 39% in 1997.

• Immigrants arriving in the 1990s have had difficulties in the labour market. They have experienced low employment rates and lower initial earnings despite their rising educational levels and better "self-assessed" command of English and or French. For example, the employment rate of recent immigrant men (those having landed within the past five years) aged 25-44 years was 81% in 1986 and 71% in 1996, a decline of 10 percentage points over the decade. While during this same period, the employment rate of native-born men in the same age group declined only 3 percentage points, from 87% in 1986 to 84% in 1996. Furthermore, according to tax file data, one year after landing, economic principal applicants landing in 1980 earned an average annual amount of $36,400 (in 1999 dollars) compared to the annual $23,900 (in 1999 dollars) earned after one year by economic principal applicants landing in 1990. Economic principal applicants landing in 1996 earned an average annual amount of $22,500 (in 1999 dollars) one year after landing.

• A recent longitudinal study of 1000 immigrants in Quebec entitled "They Come From Here Now! The First Ten Years of Life in Quebec for Immigrants Admitted in 1989" provided additional evidence related to the economic and social outcomes of recent immigrants. It provided a more upbeat assessment of recent immigrant performance. The study finds that over time, immigrants seem to settle in nicely and do quite well, according to several economic and social indicators. The immigrants were observed over a ten-year period starting 1989.

• The Quebec longitudinal study finds however that not all immigrant groups are doing well. Immigrants from Sub-Saharan African countries for example, had poorer labour market outcomes, even though most of them were highly educated. This could be attributed to the lack of networks, because the wave of African immigration to Quebec is relatively new, but it could also be accounted for by discrimination. There is insufficient evidence on this point.

• The results of the Quebec longitudinal study need to be considered with caution. The sample size of 1000 is relatively small, and high attrition rates were observed amongst respondents in the latter years of the study. The results need also to be reconciled with the large and growing body of evidence on the labour market outcomes of immigrants, which, based on a diverse and large data source, tends to present a more problematic picture of the labour market outcomes of recent immigrants to Canada.

• There was a consensus that there is a limit to the extent immigration can be used to address skill shortages in Canada. This is because only 40% of the overall flow is made up of skilled migrants. The remaining 60% consists of family class and refugee claimants. Thus a crucial challenge is how to assist the non-skilled immigrants (i.e. the other 60%) with the necessary language, literacy and other skills to facilitate their transition into the labour market. Not surprisingly, there is a bipolar distribution in immigrant earnings between those with high levels of education and those with very low levels of education. Immigrant earnings are however less than native-born earnings for same level of education and there is a smaller earnings spread between low and highly educated immigrants (i.e. lower premium) relative to the spread between native-born residents with high and low levels of education. This suggests that the "return" to immigrants on their "investment" in education is lower than that for Canadians. Again there is insufficient research on this point.

There was a debate about what constitutes a proper yardstick for successful integration. In particular, some felt that it is important to adopt a long-term view, given the important initial integration difficulties. Others pointed to the lasting effects that poor initial labour market entry could have. Specific points include the following:

• Immigrants’ labour market outcomes improve with the number of years they have been in Canada. Yet, initial outcomes may have lasting effects.

• Success should not be measured solely in terms of earnings or employment performance. There are other equally important indicators of success. For example, immigrants tend to invest heavily in their children’s education. This suggests that second generation outcomes will be good. Another yardstick for defining success is financial self reliance.

• There is a need to formulate different expectations of success for different classes of immigrants. For instance, refugees cannot be expected to perform as well as skilled immigrants, since they are not selected on the basis of their skills.

• Successful labour market integration is incomplete without a discussion on the role of demand factors in the economy. In addition, many of the unfavourable analytical comparisons draw on data obtained during the economic downturn. It remains to be seen whether the same results hold, or hold as strongly, for immigrants who arrived in the last couple of years in which a relatively favorable economy prevailed. Also, it will be important to know whether the immigrants admitted during the downturn suffered permanent "impairment".

The general consensus was that barriers would have to be addressed in a more aggressive manner in order to achieve better and faster labour market integration. Some of the barriers identified included the weak economy in the early to mid 1990s, the language proficiency of immigrants, credentials and experience recognition, discrimination, lack of accessible information for prospective immigrants, lack of skill bridging programs, lack of Canadian work experience, lack of Canadian networks, the weak economy of the early 1990s and the stiff competition that immigrants have faced from increasingly educated Canadians. Eliminating or reducing the adverse effects of these barriers affecting immigrants, is a significant important challenge facing governments. Specific points include the following:

• There was some skepticism expressed on the language ability of immigrants. The view was that immigrants are not as fluent as they think they are and that language constitutes an important barrier despite the administrative data based on self assessment that suggest immigrants rate of fluency is higher than in the past. Fluency in today’s labour market maybe more important than in the past, given the emphasis on teamwork and communications.

• The discussions pertaining to the licensing and credential recognition barriers centered on lack of information and the licensing process in general. Some pointed out that few immigrants obtain the information about the steps involved in getting licensed before coming to Canada. There is also a lack of review and appeal processes or actions for recourse when licensing examinations conclude that the individual will not be granted a license.

• Discrimination against members of visible minorities was also identified as a barrier to successful labour market integration. For example, when it comes to credential recognition, it is among visible minorities that the greatest discounting of credentials is found. This suggests that educational credentials may be evaluated jointly with other traits such as gender, race, accent, etc.

• Changes in the structure of the labour market can also create barriers to new immigrants. The timing of entry into the labour market and the availability of entry-level jobs are important in the integration process. It was mentioned that immigrants traditionally relied on selected key occupations and industries as their door of entry to the Canadian labour market. If job availability or job growth in these areas is weak, this can have negative consequences on the ability of immigrants to integrate in the Canadian labour market.

• The state of the labour market can also melt down barriers. For example, although there are regulatory barriers in the nursing field, it was reported that recent immigrants with nursing qualifications have had an easier time getting their credentials validated in Ontario because of the ongoing skills shortage in this occupation.

Absorptive capacity and levels

Discussions centered on the appropriateness of the current and proposed immigration target levels for Canada, and whether these levels should take account of the state of the economy. Opinions were split on both issues.

• With respect to levels, some expressed the view that a yearly target of 1% of the Canadian population would bring Canada into almost uncharted territory. Only a couple of times in the modern past did Canada obtain these levels.

• Caution was advised on raising levels especially in the light of integration problems and poor recent labour market outcomes. Some participants believed lower levels could improve integration.

• Others emphasized the long-term benefits of bringing in large numbers of well-educated people. They pointed out that a reduction in immigration levels would lead to a deterioration of the mix of immigrants from a human capital point of view (i.e. proportionately more refugees and family members and fewer skilled immigrants). This is because the number of immigrants that come in under these categories is largely independent from Canada’s economic goals and the overall target immigration levels, leaving skilled immigrants as the residual category that needs to adjust to reflect changes in overall targets.

• With respect to having a counter-cyclical immigration policy, participants noted that Canada had such a policy before 1990. Several participants appeared to favour a return to such a policy, pointing to the fact that it proved possible to move the levels quite responsively to the unemployment rate.

• Others argued against it, stating that the rate of unemployment or any other simple indicator of the business cycle cannot measure the absorption capability of the labour market. They argued that immigration should be based on long-term economic and social/humanitarian considerations and not be geared to short-term labour market fluctuations.

• The urban dimension of absorptive capacity was also discussed. Specifically, some felt that the concentration of immigrants in Canada’s three largest cities i.e. Toronto, Montreal and Vancouver could over stretch the resources of these cities and result in slower rates of integration. Some participants suggested that outcomes and integration could be improved if more immigrants settled in smaller sized cities with good local labour market conditions.

Specific points discussed included the following:

• Many participants believe that the new proposed immigration selection model improves on the existing model. The new selection model places more emphasis on human capital attributes of prospective immigrants i.e. education, experience and language, and less emphasis on the specific occupation of the immigrant.

• However, some participants questioned the wisdom of according points for experience abroad since it is heavily, if not totally discounted by Canadian employers.

• Foreign students pursuing studies in Canadian post-secondary institutions were identified as ideal candidates for immigrating to Canada. This is because they are already familiar with the Canadian environment and credential recognition is not an issue for them.

• Some argued for a greater role for employers in the selection process. They pointed to the advantages in terms of both matching the skills of the immigrants and the needs of the labour market. Others pointed, however, to the potential for abuse.

There was a general consensus that more needs to be done for integration. It was emphasized that the design and implementation of integration policies should reflect domestic absorptive capacity and the immigrant mix (family and refugees versus skilled migration). Some participants argued that it had been a mistake to believe that well-educated immigrants would fend well for themselves in the labour market and could be "cut loose" the way they were. Language courses, skills-bridging programs designed to make the best use of immigrants existing skills and education, apprenticeships and other initiatives designed to help immigrants get a foothold in the Canadian labour market were all seen as worthwhile. The need for literacy programs and for jobs for refugees and immigrants were also mentioned.

• The issue of credentials recognition is seen as very important. Some said that the federal government needs to exert leadership and play a bolder role.

• While there was a view that communities have an important role to play in helping deliver services to immigrants, some expressed the concern of ethnic enclaves possibly having negative effects on immigrants’ ability to integrate into the mainstream of Canadian society and labour markets.

• Sequencing of jobs and acquisition of skills also came up for discussion. Some were of the opinion that the acquisition of language, literacy and other labour market bridging skills should come first, before commencement of the first job by prospective immigrants. This is because an immigrant who starts with a job whose skill requirement and remuneration are much below his/her qualifications may run the risk of getting stuck in that job, reducing his/her chances of subsequent occupational mobility.

• More needs to be done for those at the bottom of the earnings distribution, e.g. refugees who are either illiterate or possess few skills.

• Some panelists also expressed the need to do more to prevent racial and ethnic discrimination. The federal government was urged to set measurable benchmarks for assessing racial discrimination in the labour market. Wherever possible, governments should use the legal system to remedy discrimination. Affirmative action policies were seen as a measure of last resort.

Throughout the Conversation, knowledge gaps were identified. These gaps limit our understanding of immigration and integration problems and of policies that may be needed to address these problems. Thus, part of the final session of the Conversation was devoted to identifying important research questions that need answers. Specific research questions included the following:

• Even though existing data indicates that recent immigrants are more fluent in Canada’s official languages, these fluency levels are self-reported. Thus research is needed regarding an independent objective measure of language skills amongst immigrants. How should such tests be designed and what should be the criteria for establishing a threshold for language fluency?

• It is not clear whether immigrant community groups or other providers should deliver integration services for new immigrants. Research is needed regarding the efficacy of service delivery by different types of providers.

• Research is needed on the risk of intergenerational transmission of poor labour market outcomes. Since recent immigrants have a greater poverty incidence, there is the risk that family resource constraints and neighbourhood effects could result in deteriorating outcomes for the children of these immigrants.

• There is a need to disaggregate measures of immigrant performance and look at the performance of specific socio-economic categories of immigrants at various phases in the business cycle.

• Finally, research is needed on the deleterious effects of discrimination and the reasons that the labour market and employers discount foreign education and work experience.

This report provides an overview of the Conversation on the economic and social performance outcomes of immigrants. The Conversation was held in Ottawa and was organized by Human Resources Development Canada (HRDC) together with Metropolis. The need for this Conversation was to gain a better understanding of the poor labour market outcomes facing recent immigrants, and also to identify best practices and policies to improve their integration into the labour market.

The Conversation was successful in that it was able to fulfill most of its objectives. However, due to time constraints, some issues could not be discussed at all or adequately, and should be taken up at a future Conversation. Accordingly, the topic of a future HRDC Metropolis Conversation could be on labour market integration policies for immigrants, so that this important topic receives the attention it deserves.

          Last updated: December 4, 2007