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Shortchanging immigrants costs Canada


From Saturday's Globe and Mail

In her home city of São Paulo, Brazil, Yane Brogiollo was a manager at Hewlett-Packard Co., where she oversaw a team of 15 database professionals. She also designed and taught courses for a local university’s MBA program.
They were “wonderful” jobs, and she earned a good salary. São Paolo was crowded, though, and too big. Crime was escalating. So a year and a half ago, she moved to Vancouver, hoping to find a better quality of life.
That hasn’t happened. Despite 15 years of IT experience and a master of science degree in computer engineering, 70 job applications have yielded only five interviews and no offers.
“The first thing they look is for Canadian experience,” she says. “If you don’t have that, they don’t call you for an interview. And if you don’t get an interview, it’s hard to show your skills.”
She’s not alone. Canada has a well-documented history of attracting the best and brightest immigrants from developing countries. But many of these people wind up jobless, or in minimum-wage survival jobs. And there’s a wider economic cost to the country of under-utilizing these skilled workers.
New research by the Royal Bank of Canada, to be published Monday and released exclusively to The Globe and Mail, puts a price tag on that lost opportunity. The study finds that if immigrants’ skills were rewarded in a similar way to that of Canadian-born workers, the increase in their incomes would amount to $30.7-billion – or the equivalent of 2.1 per cent of the country’s gross domestic product.
Closing the gap with Canadian-born workers would also translate into about 42,000 additional jobs.
“If we are going to continue to flourish and grow as a country, we’ve got to be very receptive to foreign capital, to foreign thinking and to foreign skills to maximize our potential,” Gordon Nixon, the bank’s chief executive officer, said in an interview. “I think it is very important that we have that macro discussion, particularly against a backdrop of high unemployment and financial global economic turmoil.”
Beyond Canada’s moral obligation to dismantle employment barriers, Mr. Nixon argues that underemployment and the persistent wage gap have a huge impact on the economy.
The problem is not just individuals suffering “social injustice or underemployment,” he said. Rather, it is about Canada squandering its own growth potential because it delays the ability of newcomers to put down roots by buying homes, saving for their children’s education or investing for retirement.
“If you look at what drives the real-estate market, what drives consumer spending – unemployment and wealth and incomes [are] key drivers in terms of that, so it filters right across the economy,” said Mr. Nixon.
The study uses details from the last census to calculate the earnings gap between immigrants and Canadian-born workers. It also explores reasons for that gap, which widened between the 1970s and 2000s – even though newcomers’ education levels increased.
This year’s report is a follow-up to one the bank produced in 2005, called The Diversity Advantage: A Case for Canada’s 21st Century Economy, which pegged the cost at $13-billion. The new study puts the figure much higher, as its methodology changed to factor in the different educational, demographic and geographic profile of immigrants to Canada.
THE PROBLEM
The recession was hard on recent immigrants. Employment tumbled 12.9 per cent among new immigrants in the downturn, led by a slump in factory jobs, compared with a 2.2-per-cent drop for Canadian-born workers, Statistics Canada figures show.
As of November, the jobless rate among Canadian-born workers was 6.3 per cent, compared with 8.4 per cent for all landed immigrants and 13.4 per cent for recent immigrants, according to Statistics Canada.
Businesses, academics and community leaders are sounding the alarm on this issue – warning that broader Canadian society will pay a steep price if new immigrants continue to struggle with underemployment and a yawning wage gap.
“We need immigrants,” said John Tory, the former Rogers Communications executive and past leader of the Ontario Progressive Conservative Party, in a recent speech. “We need them in our work force, we need them to sustain and expand not only the labour market, but our consumer market as well. And they want to be here. But there are still significant hurdles to overcome, and we need to come together to find a solution quickly.”
Consumer spending accounts for 60 to 70 per cent of the Canadian economy. There is little doubt that underemployment and the sizable income gap facing newcomers have far-reaching consequences for both consumer spending and overall economic growth.
Jamil Rehman’s story illustrates the cost of underemployment. The electrical engineer speaks seven languages and held a well-paying job in Peshawar, Pakistan, near the border of Afghanistan. Growing tensions in the region – and word that Canada needed skilled workers – landed him in Markham, Ont. in 2004.
Since then, he’s held a series of low-paying jobs, including sales at Wal-Mart and cleaning fish at Sobey’s. He has never earned more than $32,000 a year. Mr. Rehman (who asked his name be changed) was laid off from his last job a few months ago and hasn’t found work since.
He’s trying to get his professional designation as an engineer in Canada, but that requires one year of experience in the country – and so far, no employer has given him a shot.
“I knew, coming here, I would have to work all these odd jobs, which I don’t mind for a period of time,” he says. “But now, there’s a six-year gap, and no one wants to hire me.”
The father of two estimates his living standards have fallen by half in Canada – his family has had to rent a basement apartment, buy low-cost food, and acquire used furniture. It has put stresses on his marriage. And he wonders if part of the problem is his foreign-sounding name and accent.
Research shows he’s right. Résumés with English-sounding names receive, on average, 35 per cent more callbacks from employers than those with foreign-sounding names, a study this fall by University of Toronto researchers found.
Frustration is a common theme. “I came here to give, not only to get,” said Endrit Mullisi, a chemist from Albania who immigrated to Canada in 2009. Despite his science background, his main work experience has been in the non-profit sector.
The federal government says it’s concerned about the gaps. “I am very worried,” said Immigration Minister Jason Kenney in an interview. “My No. 1 preoccupation has been to reduce and eliminate that gap and we are making great strides in that direction.”
THE SOLUTIONS
Canada is not the only country that struggles to integrate its immigrants. It fares better than Europe and the U.S., according to a Migrant Integration Policy Index released earlier this year.
But everyone from Mr. Kenney to economists and researchers know there’s room for improvement. Mr. Kenney says his department’s own evaluation is showing a “turnaround” for some immigrant streams.
Last month, Mr. Kenney announced the number of immigrants admitted under the Canadian Experience Class program was projected rise to 7,000 in 2012 from 2,545 in 2009 – making it Canada’s fastest-growing immigration program. It is designed to fast track permanent residency applications for skilled foreign workers who are already in Canada and international students who have graduated from Canadian colleges and universities. Since those applicants have already spent time in Canada, either on temporary permits or student visas, they are considered to be better positioned for labour market integration.
The immigrant wage gap may stem from both real skill differences between them and Canadian-born workers, and labour market inefficiencies that prevent immigrants from making full use of their skills, the RBC study concludes.
Still, assistant chief economist Dawn Desjardins, one of the authors, says evidence on what’s driving the gap is “scant.”
There are plenty of successes – particularly with programs that help newcomers network and forge connections to the labour market. In Toronto, a half-year mentoring program that matches newcomers with established professionals has resulted in 70 per cent of them finding work in their fields. A new training program at York University aimed at integrating skilled workers into the labour market has already seen 82 people find meaningful work of the 250 enrolled.
Perhaps most of encouraging of all, more employers are seeing the benefits of hiring people with global experience. It breeds innovation, they say, and helps bolster their plans to expand internationally.
Waterloo-based Maplesoft Technologies, a unit of Cybernet Systems Co. in Japan, is hiring newcomers to help them compete globally. “Having people that have local knowledge of those markets, for us we felt it’s critical,” said Jim Dell, vice-president of marketing.
Back in Vancouver, Ms. Brogiollo is waiting for her chance. She hasn’t given up on the Canadian dream yet, and has no plans to return to Brazil. But she hopes her luck will turn, and soon.
“I was in a good job in my country – I was recognized. I knew it would be a challenge coming to Canada, and that I would have to be prepared to spend time looking, and adapting. But actually, it has been much harder than I thought.”


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