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Jobs in Canada: Navigating changing local labour markets

December 2, 2022

Recent immigrants have lower unemployment rates than earlier cohorts

While immigration represents an important source of labour supply, especially in the context of population aging, workers arriving in Canada often face a period of adjustment, and employers may face challenges in fully using the talents and skills that immigrants offer. Due in part to these challenges, recent immigrants—those who landed in the five years before the census—typically have higher unemployment rates than those who have been in Canada longer or people who were born in Canada.

While new immigrants continue to face these challenges, the gap between the unemployment rate of recent immigrants and other workers was smaller in 2021 than in 2016. For example, among those aged 25 to 54, recent immigrants had an unemployment rate of 10.9% in May 2021, while the rate for non-immigrants was 7.7%, a gap of 3.2 percentage points. In comparison, the equivalent gap in 2016 was 5.0 percentage points (unemployment rate of 11.0% for recent immigrants and 6.0% for non-immigrants).

Besides experiencing unemployment rates that were more like those of non-immigrants in 2021 than of non-immigrants in 2016, core-age immigrants who landed from 2016 to 2021 were more likely than the previous five-year cohort to be employed in industries with above-average hourly wages. These industries included professional, scientific and technical services (15.3% of 2016-to-2021 immigrants, compared with 10.3% of 2011-to-2016 immigrants); finance and insurance (7.4%, compared with 5.1%); and transportation and warehousing (7.3% vs. 5.0%).

Many factors can contribute to changes in the labour market integration of immigrants. For example, as noted in the census release on education, those who gained permanent residency from 2016 to 2021 were more highly educated than any previous cohort, with nearly 6 in 10 holding a bachelor’s degree or higher. In addition, analysis from the census release on immigration shows that more than one-third of recent immigrants first came to Canada temporarily before seeking permanent residence, compared with 17.9% among longer-term immigrants. The vast majority (77.3%) of recent immigrants with this pre-admission experience had a temporary work permit. Working in Canada before becoming a permanent resident has been shown to be a factor in improving labour market outcomes.

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