On February 22, 2023 RBC released a report with headline as we quote “Canada is failing to put immigrant skills to work.”
The Royal Bank of Canada is a Canadian multinational financial services corporation and the country’s largest bank by market value.
Report is focused that the main barrier to properly using immigrant expertise is because of the low recognition of foreign credentials.
So, it will be essential to remove this barrier to ensure that the Canadian workforce is not just larger, but also more productive.
The report emphasizes that, Canada attracts the most immigrants among the G7 countries, accounting for 90% of population increase today.
Furthermore, it states that immigrants to Canada are better educated and younger than the domestic workforce.
Yet, they are working in professions that requires significantly lower educational requirements as compared to their education and work history.
In 2021, increased immigration accounted for over 90% of total population growth.
By 2050, Statistics Canada projects that to be 100%.
So, only immigration will be able to make up for population ageing and reduced birth rates.
These immigrants are bringing critical talents in the face of ongoing labour shortages.
In fact, more than half of the 1.5 million immigrants that the Canadian government plans to bring over the next 3 years will be under the skilled economic immigration.
RBC anticipates that Canada’s Economy will grow faster than other advanced nations mostly due to these skilled immigrants and accompanying stronger workforce.
Newcomers Are Young & Educated, Yet Not Able To Work In Their Field
Also, newcomers to Canada are younger and often more educated.
Compared to little over 1/5th of non-immigrants, more over 1/3rd of immigrants hold advanced degrees, meaning a bachelor’s degree or higher.
More educated immigrants are also more likely to have majored in STEM-related subjects (science, technology, engineering, and math).
However, immigrants typically do poorly when it comes to obtaining a suitable employment, despite being younger and having higher academic achievement.
In simpler words, a greater proportion of individuals ends up working in jobs that demand less education than they already possess.
This problem, which affects many industries, is especially difficult for those who have degrees in medical, dentistry, veterinary medicine, or optometry.
According to RBC calculations, foreign-born workers are 6 times more likely to hold positions that don’t need for specialized training.
As a result, as compared to non-immigrants with equivalent degrees, their abilities are “under-utilized.”
Immigrants’ Skills Recognition Will Help
As per RBC, higher levels of immigration will not solve long-term structural labour supply challenges, but they will help.
They may be of much greater assistance if immigrant skill sets are well utilized to fill in the gap.
New immigrants can fill unfilled positions, but they also enhance housing and consumer goods demand, which raises labour demand.
They are also more likely to live in houses that are inadequate for the size or composition of their family.
All of these stresses may be alleviated by making the economy more productive.
Since last summer, the number of job openings in Canada has decreased. According to the Bank of Canada’s Business Outlook Survey, more Canadian firms foresee a poorer outlook in Q4 2022.
Moreover, due to aggressive interest rate rises and increasing inflation, the economy is entering a modest slowdown.
As a result, fears about inadequate consumer spending have grown substantially, while investment and hiring aspirations have declined.
The greatest obstacle to properly using immigrant abilities is a lack of acknowledgment of foreign credentials properly.
Looking forward, removing such hurdles will be important to guaranteeing Canada’s continued success in attracting immigrants.
Effective integration of their abilities might help address worker shortages, contribute to a more productive labour force, and alleviate inflation and housing pressures.