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Canada Needs To Think Bigger About Immigration – CIBC CEO

Last Updated On 27 October 2022, 9:33 AM EDT (Toronto Time)

The CEO of the Canadian Imperial Bank of Commerce (CIBC), Victor Dodig, called on to reform immigration policy of Canada to fill the labour market gaps.

Dodig explained that employers frequently offer lower wages, professions often undervalue skills acquired abroad, and housing costs have risen to the point where they may discourage talented foreigners.

Further, Dodig says welcoming in this context doesn’t just mean accepting immigrants. It entails ensuring that immigrants can prosper and actively participate in society and the economy once they arrive. Canada needs to improve on this front.

Dodig’s intervention before the release of the next Immigration Levels Plan 

Dodig’s intervention comes as the federal government prepares to release its next Immigration Levels Plan. The policy update will specify how many immigrants the country will welcome each year through various schemes. 

The current plan calls for Canada to accept 431,645 new permanent residents in 2022, 447,055 in 2023, and 451,000 in 2024. Dodig, an immigrant’s son, asked the government to consider raising such standards to offset the consequences of an aging workforce

He stated that for Canada to have “the population density, human capital, and potential to be a leader in the new economy,” it requires thinking bigger about immigration. 

According to Statistics Canada, immigration has a significant impact on the labour market in Canada, contributing 84% of the growth in the country’s total labour force during the 2010s. However, data also indicate that newcomers’ abilities are frequently underused. 

For example, according to Statistics Canada, the proportion of immigrants with a university degree working in positions requiring a degree declined from 46% in 2001 to 38% in 2016, compared to 60% for employees born in Canada.

Dodig’s list of suggested policy changes included closing the gap. He urged the provinces to expedite the accreditation of skilled people who received training in other countries. 

He says immigrants wind up working in jobs well below their skill level, unable to contribute as much as they desire and as much as Canada needs. Adding to this, he said that this together with an increased cost of living, runs the danger of damaging Canada’s reputation as a country of opportunity.

Maintaining Canada’s reputation

According to Rebekah Young, vice president and director of inclusion and resilience economics at the Bank of Nova Scotia, it is “premature to imply that there is a significant diminishing of demand to come to Canada just yet.” 

However, she said, governments at all levels must address services under pressure, such as high-quality education and easy access to medical care—elements that have long been enticing aspects of Canadian life.

The future viability of Canada as a travel destination will depend on the choices and actions made now, according to Young. Today’s choices and deeds will determine whether Canada remains an attractive country in the future, continued Young.

In addition, a severe labour shortage coincides with Dodig’s proposal for a reassessment of immigration policy.

Experts and Canada government’s response 

Canadian government took a small step toward addressing the issue this month, announcing that it will temporarily remove a cap on work hours for international students, allowing approximately 500,000 international students to work more than 20 hours per week beginning in November.

However, it is still unclear why didn’t they remove the upper cap for open work permit holders.

According to experts, addressing the problem will need considerably more effort. Vacancies reached a record high of roughly one million this summer, a sign of things to come as more Canadian baby boomers retire.

Immigration can be beneficial, but only if Canada remains a desirable destination since many other aging Western countries will also be looking for workers. Dodig noted that high housing costs and an abundance of occupations that do not pay enough for individuals to get ahead” were obstacles to Canadian recruiting efforts. 

The CEO of CIBC suggested expanding rental housing as a route to homeownership and using the public property “strategically” to alleviate the housing shortage.

Dodig says that CIBC has committed to increasing its minimum pay from $20 per hour to $25 per hour by 2025 and urged other employers to take similar steps. Further, he explains that they increased wages, realizing the necessity of recruiting talent, but also the need to offer pay that can substantially contribute to household finances.

According to Scotiabank’s Young, housing affordability is a concern right now, not only for immigrants but for all Canadians. However, given current pricing trends, she noted, newcomers face even higher costs when buying a new house or finding rental housing.

Young predicted that newcomers could start to choose cities or regions where their money goes further. She added that this situation should put additional pressure on governments to implement the required changes to unleash more supply.

Recognizing foreign credentials In Canada

In a statement released last month, Immigration, Refugees and Citizenship Canada (IRCC) acknowledged that recognizing credentials in regulated professions might pose a considerable obstacle for new immigrants and postpone the benefits of immigration on the Canadian economy.

The government department stated that foreign credential recognition is challenging. Since provinces and territories are in charge of most regulated professions and trades and often further assign that responsibility to regulatory organizations. 

The IRCC stated that it was collaborating with Employment and Social Development Canada, the federal agency in charge of the Foreign Credential Recognition Program, and the provinces and territories to “make collective advancements” to address this issue.

Source: Financial Post