Immigrant Underemployment is Costly for Canada, CIBC Says

English: Tour CIBC in Montreal. (Photo credit: Wikipedia)

By Nirmala Menon


Bloomberg
A worker at an auto-parts plant in Ontario. A CIBC economist argues that changes to Canada’s immigration model could help productivity.
Immigrants in Canada are underemployed and paid less than Canadian-born workers, a phenomenon that’s costing the economy over 20 billion Canadian dollars in forgone earnings, and is probably  a significant factor in Canada’s productivity gap with the U.S., according to a report from CIBC World Markets.

Newcomers to Canada may be more educated now, but they only earn about 60 cents on the dollar relative to their Canadian-born counterparts. That compares with 80 cents on the dollar earned by those who arrived in the 1970s, the report says. The earnings gap is also narrowing at a much slower pace.

The crux of the issue is a mismatch between the skills that an immigrant brings and those the country needs, according to the report’s author, Benjamin Tal. Furthermore, immigrants are arriving with less proficiency in English or French, Canada’s official languages.

“This is not an efficient market,” Mr. Tal, who is deputy chief economist of CIBC World Markets, said in an interview.

He says Australia is doing a better job of narrowing the discrepancy between its native-born and immigrant populations, noting that the earnings gap is 50% smaller than in Canada. He says mandatory pre-immigration English language testing introduced in the 1990s is probably the key factor for the advantage that Australian immigrants enjoy. There’s also more coordination between government and the professional bodies responsible for licensing, so immigrants have a greater chance of success in their fields, he says.

Although many recent changes in Canadian immigration rules are modeled on Australia, Mr. Tal worries that Canada may be focusing too much on short-term needs.

“We should be taking a long term view,” he says.

The earnings disparity between immigrants and those born in Canada doesn’t bode well for the country’s lackluster productivity. Mr. Tal points to estimates that suggest some 20% of the increase in the productivity gap with the U.S. over the last decade can be attributed to immigration.

“Without a significant increase in immigration-based productivity, the aging profile of the Canadian population will work to reduce the standard of living all Canadians,” Mr. Tal writes.

http://blogs.wsj.com/canadarealtime/2012/08/13/immigrant-underemployment-is-costly-for-canada-cibc-says/

Government of Canada Helps Internationally Trained Professionals in Alberta Get Good Jobs

CALGARY, ALBERTA, Aug 01, 2012 (MARKETWIRE via COMTEX) -- More than 300 internationally trained professionals in Alberta will receive financial assistance to help them have their education and experience recognized, thanks to the Government of Canada's Foreign Credential Recognition Loans Pilot. The Honourable Diane Finley, Minister of Human Resources and Skills Development, made the announcement today.

"Our Government's top priorities are job creation and economic growth and we recognize that internationally trained workers help fill skills shortages in key occupations," said Minister Finley. "By partnering with organizations like the Immigrant Access Fund Society of Alberta to help internationally trained professionals find meaningful work, we are working together for Canada's long-term prosperity."

"We want skilled professionals who come to Canada to work and contribute to their full extent as soon as possible, instead of facing underemployment and being underutilized," said Jason Kenney, Minister of Citizenship, Immigration and Multiculturalism. "That is why we are committed to not only attracting bright, hard-working people from all over the world but also making sure that they get every opportunity to succeed in Canada."

Under the Foreign Credential Recognition (FCR) Loans Pilot, the Immigrant Access Fund Society of Alberta (IAF Alberta) is receiving over $3.3 million to provide loans to internationally trained professionals so they can become licensed to work in their fields. This funding will enable IAF Alberta to provide over 300 more loans over the next two years and to expand its employment counseling and credential assessment services to smaller and rural communities.

"The Immigrant Access Fund applauds the Government of Canada for its vision and commitment to investing in the potential of new Canadians," said Kerry Longpre, President of the IAF. "This aligns with the mission of the Immigrant Access Fund Micro Loan Program, which strives to ensure the equitable integration of internationally trained immigrants. It is critical for the economic and social success of our communities to maximize the expertise of new Canadians and celebrate their contributions."

For many internationally trained professionals, the cost of licensing exams, training and skills upgrading can present a significant barrier to credential recognition and getting work in their fields. The FCR Loans Pilot is implementing projects across Canada that provide financial assistance to internationally trained professionals to lessen some of these financial burdens. Delivered in partnership with community organizations, these micro-loans will make it easier for internationally trained professionals to find jobs that best suit their skills and experience.

IAF Alberta is the fourth organization to receive funding under the FCR Loans Pilot. Similar projects under the pilot have been announced with IAF Saskatchewan, WIL Employment Connections of Ontario, and S.U.C.C.E.S.S British Columbia. This innovative, community-based initiative is another example of how the federal government is working with partners to help internationally trained professionals put their knowledge and skills to work sooner.

The FCR Loans Pilot complements the significant investments that the Government of Canada has made in recent years to help new Canadians succeed.

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IF THERE IS A DISCREPANCY BETWEEN ANY PRINTED VERSION AND THE ELECTRONIC VERSION OF THIS NEWS RELEASE, THE ELECTRONIC VERSION WILL PREVAIL.

This news release is available online at: www.actionplan.gc.ca .

BACKGROUNDER

The Foreign Credential Recognition Loans Pilot

Following a commitment made in Budget 2011, the Honourable Diane Finley, Minister of Human Resources and Skills Development, and the Honourable Jason Kenney, Minister of Citizenship, Immigration and Multiculturalism, launched on February 22, 2012, the Foreign Credential Recognition Loans Pilot to test innovative and sustainable ways to help internationally trained professionals cover costs associated with the foreign credential recognition process. Until March 31, 2014, the Pilot will provide $18 million in funding to community-based partners-such as non-government and non-profit organizations-to increase their capacity to deliver financial assistance to eligible professionals.

The funding announced today will help internationally trained professionals in Alberta find meaningful work by enabling the Immigrant Access Fund Society of Alberta to provide over 300 more loans over the next two years, and to expand its employment counseling and credential assessment services to smaller and rural communities.

The Immigrant Access Fund (IAF) provides internationally trained professionals and tradespeople with loans of up to $10,000, repayable within four years, to help with tuition fees, books and course materials, qualification assessment, or other costs related to obtaining the Canadian accreditation to successfully integrate into the job market. Since 2005, IAF has approved 675 micro loans to internationally trained professionals in over 60 different occupations.

The Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications

Canada's Economic Action Plan invested $50 million to work with the provinces and territories and other stakeholders to improve foreign credential recognition. This partnership led to the development of the Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications, which was announced in November 2009.

Under the Framework, foreign credential and experience recognition is being streamlined for key occupations, including engineers and nurses. In 2010, service standards were established so that internationally trained professionals in the first eight priority occupations can have their qualifications assessed within one year, anywhere in Canada. We are currently improving foreign qualification recognition for six more target occupations, including physicians and dentists.

In Budget 2012, the Government of Canada announced support for further improvements to foreign credential recognition and will continue to work in partnership to identify the next set of target occupations under the Framework.

To learn more about Canada's Economic Action Plan, visit www.actionplan.gc.ca .

The Government of Canada's Foreign Credential Recognition Program and Services

The Foreign Credential Recognition Program aims to improve the integration of internationally trained workers into the workforce. The Program provides funding and works with the provinces and territories and other stakeholders-including regulatory bodies, post-secondary institutions, sector councils and employers-to implement projects that facilitate the assessment and recognition of qualifications acquired in other countries.

Established in May 2007, the Foreign Credentials Referral Office (FCRO) provides information and path-finding and referral services, both in Canada and overseas, to help internationally trained workers have their credentials assessed quickly so they can find work faster in the fields in which they have been trained.

The FCRO works with federal, provincial and territorial partners, as well as with credential assessment and recognition bodies, to strengthen foreign credential recognition processes across the country. Internet-based services for internationally trained workers can be found on the FCRO website at www.credentials.gc.ca .

Established in 2005, the Internationally Educated Health Professionals Initiative works with provinces, territories and stakeholders to help more internationally educated health professionals put their skills to work in Canada's health system.

        
        Contacts:
        Marian Ngo
        Office of Minister Finley
                    819-994-2482      
        
        Media Relations Office
        Human Resources and Skills Development Canada
                    819-994-5559      
        
        
        

SOURCE: Canada's Economic Action Plan

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