Banks look to immigrant market for growth

English: The Montreal head office of the Royal...
English: The Montreal head office of the Royal Bank of Canada is the Place Ville-Marie's largest tenant (Photo credit: Wikipedia)

The Globe and Mail

Major banks are duking it out to attract Canadian immigrants, a key market in a retail banking sector that is grappling with an aging population and a tighter lending environment.

Some of Canada’s largest financial institutions are offering unsecured credit cards, multilingual banking services, periods of no-fee banking and help sending money to relatives overseas.

Banks are looking to the immigrant market in a bid to broaden their retail divisions; as the growth of the Canadian-born population slows, these newcomers represent a key category for banks and the economy as a whole.

“It’s really somewhat of a clear-cut business case,” said Paul Sy, director of multicultural markets at Royal Bank of Canada. “The forecasts are quite clear that Canada is an aging population. Moving forward, newcomers are really the key source of growth and will be fueling the … growth of the Canadian economy for years to come.”

The most recent census showed two-thirds of Canada’s population growth over the previous 10 years came from immigration. In 2010, about 280,600 immigrants became permanent residents in Canada, more than in any of the 50 preceding years. Some projections show immigration will account for 72 per cent of growth by 2036.

“These are great new customers to the bank,” said Winnie Leong, vice-president of multicultural banking at Bank of Nova Scotia, which, like many other banks, has started to market unsecured credit cards to recent immigrants.

Traditionally, a lack of credit history barred recent immigrants from taking out loans or applying for a mortgage until they built a credit history; that often meant starting from the ground up with a secured credit card for $1,000 or less.

When Kamal Jain came to Canada 40 years ago with a master’s degree in engineering. In his first 18 months here, he found work as an engineer, saved enough money to buy a car without taking on debt and had started to save money. Still, he was denied a credit card because he had no credit history.

“I remember telling [the bank] that there could be no better credit record than not having to have taken a loan at all and still managing to accumulate the necessities of life, paraticularly having come here with less than $400 in my pocket 18 months prior,” Mr. Jain said.

Decades later, Canadian banks are trying to woo customers like Mr. Jain.

Similar to Scotiabank and Canadian Imperial Bank of Commerce, RBC’s unsecured credit card for newcomers has a base limit of $1000, an interest rate of 19.99 per cent and a monthly fee, which is waived for the first six months. The limit may be increased on a “case-by-case” basis, Mr. Sy said.

Ronald Miranda, originally from the Philippines, said that although he had a job lined up in Canada, he arrived in the country with less than $1,000 in cash. In the beginning, money was tight and having access to a credit card at Scotiabank made things much easier, he said. Mr. Miranda and his wife now have a joint $10,000-limit credit card.

While these products can be helpful, offering unsecured credit cards to immigrants introduces them to risks too, said Adam Fair, a program manager for the Canadian Centre for Financial Literacy.

“Some people come from countries where they didn’t even have credit or credit cards … there needs to be a good understanding of what credit is useful for, how it can be helpful, but how it can also be harmful,” he said.

The immigrant unemployment rate is close to double the figure for the population as a whole. In 2011, 14.2 per cent of immigrants who had been in Canada five years or less were jobless, compared with 7.4 per cent for all Canadians, according to Statistics Canada. Nearly two thirds of immigrants experience periods of low-income during their first 10 years in Canada.

Still, it’s clear why the banks are targeting this group, Mr. Fair said.

“A lot of newcomers come highly educated and if they are able to adapt and establish themselves in Canada, they and their family could be lifelong customers of that institution,” he said.

Luis Meza, for example, first met an RBC representative while still living in his native Venezuela. After having lived in Canada full-time for about a year now, Mr. Meza has a mortgage, car loan and $20,000-limit credit card with the bank.

He launched a cafe in Ancaster, Ont., when he settled in Canada and does his business banking with RBC too.

Mr. Meza provided statements from his bank in Venezuela and that was enough for RBC to assess his credit-worthiness.

“It’s about the potential of the market,” Mr. Sy said. “From what we’ve seen, there’s a strong determination by newcomers to succeed.”

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Tax in Canada and the US: the differences that really matter

taxes (Photo credit: 401(K) 2012)

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Canada has lesson to learn from Australia in foreign student policy

Graph showing international students at Melbou...
Graph showing international students at Melbourne University by region of origin as well as the top five countries (Photo credit: Wikipedia)
By Diane Francis, National Post

Friday, Aug. 24, 2012

Canada is finally moving toward a smart, two-step immigration policy, like Australia and others have, that will recruit talent through a targeting policy of foreign student education.

Australia’s success has been widely disseminated and last week a blue-ribbon federal task force in Canada released a report that would emulate its policy. The number of foreign students allowed entry into Canadian institutions should nearly double in a decade and those who graduate from Canadian institutions should be eligible to remain, rather than having to return home and wait years to get in.

Most foreign students in Canada get their degrees and never come back. Most Australians apply to remain and the majority stay.

The next step will be consultations across the country and the new policy will likely become part of the reforms being developed by Immigration Minister Jason Kenney.

Most foreign students in Canada get their degrees and never come back. Most Australians apply to remain and the majority stay

Australia currently has 256,087 international students, mostly post-secondary, slightly ahead of Canada’s 239,130. The Canadian task force recommends that this be increased to 450,000 in a decade without taking places from Canadians.

Canadian universities and other educational institutions have catered to this market but Australia has outclassed Canada’s efforts by pooling their marketing efforts.

Ottawa should emulate the [external] website, where anyone can research educational opportunities, by courses, majors, institutions, regions, cities. Its “wizard” feature allows users to deep-dive into concrete information about housing, scholarships, fees, tuition and living expenses. In Canada, the [external] website offers incomplete information. A cursory review of university websites found that fees and other information were unavailable.

Australia charges more than Canadian institutions because along with graduation comes immigration eligibility, providing criteria are met. Another benefit of the Australian method is that outcomes for immigrants are far superior than immigrant outcomes in Canada, where unemployment among so-called university-educated immigrants is four times’ higher than for Canadians with university degrees.

Canada needs this tool to attract skilled and educated workers who will immediately be successful in the country because they have assimilated and have bona fide credentials.

And Canada can charge more too:

– The University of Melbourne charges bachelor of commerce international students $32,700 annually compared with $26,900 at the University of Toronto, $25,400 University of Alberta and $25,300 for UBC.

– Melbourne charges international students studying engineering $33,000 a year compared with $30,400 at U of T and $23,300 at U of Alberta.

Medical school for international students in Australia is more than $55,000 a year and $36,500 at University of Toronto, according to its website.

Worse yet, there are inadequate places for Canadians at Canadian medical schools and the result is that hundreds of Canadians go to Australian medical schools, and virtually all stay, according to University of Melbourne Professor and immigration specialist Lesleyanne Hawthorne.

(This points out another needed immigration reform. As Canadians go abroad to become doctors because foreigners have taken their places, foreigners who study here cannot stay to practice medicine because they must go home and re-apply. No foreign credentials, Australian or even American, are recognized by Canada’s protectionist medical profession.)

“Canadians who graduate from Australian medical schools are immediately licensed and get residencies. We are keeping 92% of our Canadian medical students. Now dental students from Canada are coming to Australia in large numbers for the same reasons,” said Ms. Hawthorne at a recent conference into immigration at the University of Calgary.

By offering eligibility with an education, universities here can up their fees substantially, and provide more spaces for Canadians.

The Australian system also picks and chooses among international students, selecting those with credentials that are in demand and rejecting those who have not adjusted to the culture or who have not behaved properly. Since 1999, some 630,000 foreign students have been allowed to immigrate in Australia and have achieved superior outcomes compared with immigrants who have never lived or studied there first.

“By 2006, at a time of sustained economic boom, labor market participation rates were strong in Australia for former international students. Ninety-five percent were employed, compared with 93 percent of those recruited offshore — a far more positive level of engagement than 1999-2000 arrivals (62 percent),” said an article about the Australian immigration experience published a few years ago in Canada’s Policy Options.

However, one caution is that if Canada hurtles headlong into doubling foreign student populations governments must be wary of the proliferation of private-school rackets offering diplomas as a means of gaining entry for unacceptable, unqualified persons.

“Serious abuses in Australia were uncovered, at a time when vocational private-sector quality assurance mechanisms were poorly developed,” said the Canadian report. “By May 2009, international student enrolments in vocational education and training were growing by 50 percent per year, compared with just 1 percent in the tertiary sector. There was a growing concern that ‘widespread rackets among private trade colleges were…undermin[ing] Australia’s education, immigration and employment systems.’”

Such hazards can be averted by putting safeguards in place to monitor providers of “education” to foreigners. If not, a proliferation of schools will result, handing out worthless diplomas and credentials as backdoor entries into Canada.

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Immigrants, young buyers to buoy home sales, CIBC says

English: Kings Grove, Longniddry This resident...
English: Kings Grove, Longniddry This residential area was built during the early 1970s. At that time, the post-war "Baby Boomers" had entered the housing market, creating a big demand for accommodation within easy commuting distance of Edinburgh. (Photo credit: Wikipedia)

CBC News Posted: Aug 23, 2012 12:55 PM ET
A large bubble of people in their prime home-buying years, coupled with an influx of immigrants, is poised to support Canada's housing market for the next decade, a major bank economist said Thursday.

Benjamin Tal of CIBC put out a report on Thursday in which he argued that Canada's population demographics are working in favour of the country's housing market.

Canada is facing a well-documented demographic pinch over the coming years, as Baby Boomers retire and seek to cash out their homes to finance their retirement. Experts have gotten increasingly concerned on the impact this boomer bulge will have on the job market and the housing market.

But beneath the numbers, Tal sees some reasons for optimism. Although the 55- to 74-year-old age group will see the largest population increase in the next decade, the second-largest will come in the 25-44 group. That's the prime home-buying demographic, with recent research suggesting 18 per cent of that group buys a home in any given year.

"In other words, the group that is most likely to buy a house will grow faster in the coming decade," Tal said.

Canada is forecast to see a decrease in the 45-54 demographic, but historically, that group represents a very small percentage of home buyers as people are typically late career with established families, making them less likely to move.

Down the line, there's a concerning 170,000 decrease expected in the number of Canadians under 25. But the "low propensity to buy among this age group will limit the damage" at least until 2022 and beyond, Tal said.

 REAL ESTATEMapping average home prices across Canada
Secondly, immigration will act as a key supporter for real estate demand. Most of the growth in population is now due to immigration, Tal writes, and that bodes well for the housing market over the next decade.

While immigrants often face many hurdles integrating into society while finding a home and employment upon first arriving in Canada, the numbers show a significant uptick in home ownership after three years.

Indeed, "after ten years in Canada the propensity among immigrants to own a house is higher than among native-born Canadians," Tal writes.

In the short term, Tal agrees with the consensus of economists who expect some sort of modest contraction in the housing market, after years of outsized gains fueled largely by low borrowing rates. But longer term, the particulars of Canada's population should help keep the real estate market sustainable.

"While housing market activity is projected to soften in the near-term, the good news is that any adjustment will not be aggravated by negative demographic forces," Tal says.

"At least for the next decade, demographic forces will be strong enough to mitigate the damage and probably shorten the duration of the upcoming market adjustment."

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Canada’s new immigration rules put premium on young people

Happy Canada Day
Happy Canada Day (Photo credit: Anirudh Koul)

OTTAWA — The Globe and Mail

New immigration rules will target workers aged 18 to 35 as the Conservative government provides the clearest sense yet of how Canada will rely on young immigrants to soften the fiscal pain of a demographic crunch.

The federal regulations reveal a sweeping overhaul of the points system used by Canada for approving foreign worker applications.

The new points grid provides details that are in line with previous government pledges to gear the immigration system toward younger workers with strong language skills in English or French who already have a job lined up in Canada.

Under new rules that will take effect next year, workers aged 47 and over will receive no points for age, compared with 12 for those between 18 and 35, the most coveted age group under the Federal Skilled Worker Class of immigrants.

The available points for applicants decreases by one for each year above 35.

The government says the change, announced over the weekend, is based on clear evidence that older immigrants are much less likely to succeed in the work force, although that position is not without its critics who say that the government points system should be more flexible.

Driving the change is the concern that the ratio of working-age Canadians to retirees is shifting dramatically.

“An aging population … represents a significant policy challenge for Canada,” a federal analysis of the changes says. “The immigration of young people able to work at relatively high wages for a number of years can help lessen the consequences of this phenomenon.”

Independent research supports the government’s claims that younger immigrants perform better financially, but some say there shouldn’t be hard and fast rules.

“The next Frank Stronach could be 38 years old, and then what do we do?” said Ratna Omidvar, president of the immigration-focused Maytree Foundation and board chair of the Toronto Region Immigrant and Employment Council. “I think a little less rigidity would be preferable.”

On language, the new rules will give significantly more points to applicants who have strong language skills in either English or French, but points for speaking both official languages will be cut in half from eight to four.

Some immigration experts say this could, at least temporarily, have the effect of curbing immigration from regions with relatively poor average English or French skills like China and South Asia.‬ A spokesperson for Immigration Minister Jason Kenney rejected such theories as “innapropriate.”

In addition to changing the Federal Skilled Worker Class, the new regulations also create a new Federal Skilled Trades Class and updates the Canadian Experience Class, which was created by the Conservative government in 2008.

Over all, the changes aim to help employers bring in the workers they need and make it easier for temporary workers to apply for citizenship while in Canada. The rules also decrease the points for work experience outside of Canada.

Citizenship and Immigration has posted an extensive rationale for the changes in the Canada Gazette, citing numerous academic studies to support specific measures.

One of the cited researchers, McMaster University economics professor Arthur Sweetman, who co-authored a paper called “Immigrant Earnings: Age At Immigration Matters,” says the federal age rules are clearly supported by data.

“It makes a lot of sense,” he said. “Immigrants who arrive later in life – on average – have a lot more difficulties in the labour market.”

However, on the broader objectives of the federal rules, Dr. Sweetman noted that the government discusses how they will benefit employers and new immigrants, but is silent on their potential impact on existing Canadian workers.

“If you were going to design an immigration system that was going to help employers keep wages low, this is pretty close to what you’d want,” he said, noting that it will be important to ensure employers are really making an effort to find Canadian workers before turning to the immigration system.

NDP immigration critic Jinny Sims said the government’s approach to changing demographics seems poorly thought out. She said that listing workers over 35 as “too old” to come to Canada seems at odds with the government’s plans to have Canadians work until 67 before qualifying for Old Age Security.

“It just doesn’t make any sense,” she said.

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Chinese continue to seek residency overseas

English: The Great Wall of China, near Beijing...
English: The Great Wall of China, near Beijing in July 2006. This is a section of Mutianyu. (Photo credit: Wikipedia)

By Cheng Guangjin in Beijing and Li Xiang in Paris (China Daily)

 PrintMailLarge Medium  Small
Despite tightening immigration rules in many destinations popular with Chinese immigrants, the number of applicants — who have growing wealth and a desire to live elsewhere — continues to rise.
This year it has become even more difficult for many Chinese citizens to realize their immigration dreams, as most of their favorite destinations are adjusting immigration rules with higher qualification requirements and fewer openings.
Canada announced in late June that it would temporarily suspend new applications to the Federal Skilled Worker Program and Federal Immigrant Investor Program, effective on July 1. The government is expected to accept applications again in January.
Meanwhile, Quebec, a province of eastern Canada, has limited the maximum number of investor applications between March 21, 2012, and March 31, 2013, to 2,700.
"This has been a heavy blow to new applicants, applicants being processed and the immigration intermediaries in China like ours," said Ding Wei, director of the Canadian immigration department at JJL Overseas Education, a Beijing-based education and immigration intermediary.
According to Ding, many ongoing application cases in his company have stalled.
"Applicants being processed have to wait longer, with a higher chance of being turned down," Ding told China Daily.
Canada is not alone in having new immigration rules.
Australia, for which China is the biggest source of immigrants, on July 1 introduced a new Skilled Migrant Selection Model, one of the biggest changes to the Australian immigration system in years.
The new system will be less convenient for prospective immigrants to Australia. They will have to wait probably about six months to find out if they are allowed to make an application.
According to Ma Jing, who is in charge of the Australian immigration department at JJL, the new model has higher requirements, including education, language ability and business experience.
Because more detailed rules have yet to come out, "now is a transition period with fewer new applicants to Australia", Ma said.
However, Ma is optimistic about a continued increase in the number of new applicants in the future.
"Generally speaking, it has become more and more difficult to move to other countries with higher requirements, including investments, but Chinese people's wealth is also on the rise," Ma said.
Ding said that people may turn to other countries such as the United States and some European countries instead of Canada, since not all news is bad news.
The US on Aug 14 directed young illegal immigrants to fill out new forms and pay $465 if they wanted to apply under a new program that will let them avoid deportation and obtain a US work permit.
Earlier this month, the US Congress agreed in principle to a three-year reauthorization of the EB-5 Regional Center Program, which grants residency permits to foreign investors, a program that is due to expire in September.
Ding is not surprised: "The US knows well the benefits to the development of its regional economy and employment as a result of Chinese investors."
In Europe, at the French Senate's Judicial Committee hearing on July 24, French Interior Minister Manuel Valls signaled that the new Socialist government of President Francois Hollande intended to make changes to French immigration law.
Valls' plans would make it easier for foreign students to work in France after their graduation, said Daniel Kahn, founding partner of French law firm Kahn & Associes in Paris.
Furthermore, if other measures are made regarding the residence and work permit authorization, the lives of foreign employees in France will be more stable, and they will be encouraged to settle in France for good, Kahn said.
Kahn noted that the French government recognizes that non-EU students who have graduated from French universities are an asset to the French economy.
"All companies established in France will benefit from this change in French immigration law," he said.
Many Chinese students are studying in France. Some of them graduated from the most famous French business, commercial and engineering schools and institutes of political science.
"They speak two or three languages and have a Sino-French cultural background," said Kahn.
"The new immigration policy should enable many of them to find suitable and interesting positions in French companies and obtain the appropriate work permit."
No matter how the rules are changed, people's wish to live elsewhere simply won't fade.
Ma said that many of her clients have children who study abroad.
"They feel it's a pity if their children spend years studying in a foreign country without obtaining citizenship there. So they apply for immigration, which can also help their children," Ma said.
"People also want to have a life with less pressure and to enjoy a better pension when they grow old after emigrating to countries like Australia," Ma said.
As for businessmen who travel around the world from time to time, a foreign passport can mean less time waiting for a visa, compared with a Chinese passport, Ma said.
Yao Lei, 29, a senior system administrator on global infrastructure in the IT industry at a US company in Beijing, will soon join the middle-class force with a good salary.
But he has found new momentum for life after making a decision to emigrate to the US.
He plans to acquire permanent residence under the EB-1A category, which is for immigrants who can demonstrate extraordinary ability, with the help of his US-based company. He has found that his specialty is increasingly in demand, even in the US.
"I think I can get a higher salary, a life with less pressure and easier access to educational opportunities for my children in the future," Yao said.
Contact the writers at and

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