Canadian Government released a new statistic report on 1 February 2021. The report published shows a comparison between the wages of immigrants and local Canadian workers before the COVID crisis. According to the reports, the wages of immigrants have remarkably increased over the last few years. However, they’re still lesser than salaries of Canadian locals, working in Canada.
As per the statistics, the average entry wage for immigrants who arrived in Canada in 2017 was $30,100 after a year of their arrival. However, the wage of immigrants who arrived in 2016, was $26,500 in the tax year 2017, which shows a great increase in the average pay rates of immigrants in Canada. If we compare this stats with the pay rate of Canadian born workers then we'll notice that Canadian born workers, with a median wage of $37,400 in 2018 earned about 24.2 per cent higher than overall immigrants that year.
Factors driving up median immigrant wages
Even though immigrants have lower median wages than Canadian born workers, we can still see their pay rates rising over these years. Let's take a look at the factors which might be responsible for this gradual increase.
The greatest factor impacting the wages of immigrants in Canada's Express Entry system. It is a highly competitive system which was designed by the Government to fill in the labour gaps through economic immigration programs.
According to statistics, out of the total number of immigrants who moved to Canada in 2016, only 52.6 per cent entered through the federal Express Entry economic immigration programs. In 2018 this number increased to 58 per cent which greatly affected the median wages of immigrants.
The eligibility criteria of the Express Entry system makes it the key factor for increasing the average pay rate of immigrants. One of the key requirements for an employer to get a contract with the Express Entry system is a Labour Market Impact Assessment (LMIA) approval. The LIMA approval is usually only issued once the employer ensures that the immigrants will be paid an amount which meets or exceeds the median wage for Canadians in the same working positions.
Besides the eligibility criteria from Employers, another requirement of the Express Entry system, affecting the median wages of immigrants is the amount of working experience required for applicants. Candidates with a minimum of one year of experience are held eligible to apply for Express Entry system. It is noticed that immigrants with a decent amount of work experience are often awarded salaries higher than Canadian-born workers with little or no experience. This increases the median wage of overall immigrants, present in Canada.
“Pre-admission experience, which can provide immigrants with language skills and knowledge of the job market, can help immigrants settle more quickly than those with no pre-admission experience”. –Canada Statistic Report
Besides the Express Entry system, there are certain other factors which might be responsible for these statistics. For instance, immigrants who study in Canada or continue their education in a Canadian university may have a chance for earning high wages. Canada has two official languages, French and English. Having a good knowledge of these languages in speaking, reading and writing may have a remarkable impact on the wages of immigrants. For this, the immigrants need to get their foreign credentials recognized by employers in Canada.
Median entry wages for immigrants admitted in 2017, by pre-admission experience
It is to be noted that immigrants with a study permit and a work permit, who moved to Canada in 2017, earned a median entry wage of $44,000 in the tax year 2018. Similarly, immigrants who only had a work permit earned $39,100 in the same year. Statistically, both of these numbers exceed the median wages of Canadian workers during that year.