Analysis of the Canadian immigrant labour market, 2008 to 2011

Overview

Overall, 2008 was a peak year for the Canadian labour market. Both the rates of employment and labour force participation reached record highs (63.5% and 67.7%, respectively), and the unemployment rate hit an historic low of 6.1%. For core-aged immigrants, the employment rate was 77.4%, and the unemployment rate, 6.8%. The corresponding figures for their Canadian-born counterparts were 84.1% and 4.6%, respectively.

Among immigrants of core working-age, employment fell by 1.8% between 2008 and 2009, compared with a decline of 2.0% for their Canadian-born counterparts. As a result of the labour market situation in 2009, immigrants' unemployment rate increased to 9.6%, up 2.8 percentage points from 2008. Those who had been in the country for 10 years or less had the biggest increase in their unemployment rate—up 3.5 points to 11.0% for recent immigrants and up 3.2 points to 14.2% for their very recent counterparts (see box Time since landing).

For established immigrants—a population whose labour market outcomes tend to converge with those of the Canadian born—the unemployment rate rose 2.6 percentage points to 7.9% in 2009, compared with an increase of 1.8 points to 6.4% for the Canadian born.

Another measure of how immigrants (or any other group) fared during the downturn is the rate of employment—that is the number of people employed as a share of their population (Chart 1). While the share of employed among the Canadian born aged 25 to 54 was 82.2% in 2009, the corresponding figure for immigrants was 74.9%—hence a gap of 7.3 percentage points between the two groups, which was unchanged in 2011. This gap was lower in 2008, at 6.7 points.

Among very recent immigrants, however, the employment rate was 63.6%, the lowest of all three immigrant groups, leading to the largest gap with the Canadian born—18.6 percentage points in 2009, compared with a gap of 17.5 points in 2008. This gap widened to 19.4 percentage points in 2011.

From 2010 to 2011, employment among core-aged immigrants rose by 4.3%, pushing their unemployment rate down 1.1 percentage points to 8.4%, while their employment rate edged up by 0.4 points to 75.6%. The bulk of the employment increase in 2011 was accounted for by established immigrants (in the country for more than 10 years). Those who were landed immigrants for five years or less remained the group with the lowest employment rate (63.5%) and the highest unemployment rate (13.6%) in 2011 (Chart 2).

As a result of the gains in 2011, employment among core-aged immigrants was well above the level of 2008 (+4.6%), with nearly two-thirds of the growth (63%) in the Prairies and British Columbia. Despite the 4.6% increase in the four-year period, immigrants' employment rate in 2011 was 1.8 percentage points lower than in 2008, mostly due to their employment growth not keeping pace with their population growth. Also, their unemployment rate, at 8.4%, was 1.6 percentage points higher than in 2008, as the number of jobseekers increased.

In contrast, employment among the Canadian born of core working-age was virtually unchanged in 2011, and well below its pre-downturn level (-1.8%). From 2008 to 2011, nearly half of the national employment decline for the Canadian born was among those living in Quebec and Ontario. Over this period, the employment rate for the Canadian born was down 1.2 percentage points to 82.9%, and their unemployment rate up 0.9 points to 5.5%.

Time since landing

Social and economic integration of immigrants is a process that takes some time. But how long does it take for immigrants' labour market outcomes to converge with those of the Canadian born? A number of factors influence the process and likelihood of convergence, including knowledge of English or French, level and country of education, recognition of foreign credentials, and presence of social networks in Canada among others. Hence, time since landing is a key determinant of immigrants' labour market outcomes, and the labour force data show this clearly. The gap between immigrants and the Canadian born narrows based on time since landing, although it does not disappear (Table 1).

Immigrant labour market outcomes by province

Highest employment rates in the Prairies

In 2011, more than half the employment growth for Canada's landed immigrants was accounted for by immigrants living in the Prairies and British Columbia. While these immigrants made up 31% of Canada's immigrant workforce, they accounted for 53% of the immigrant employment growth between 2010 and 2011.

In Saskatchewan, where the labour market was relatively stable in the downturn, immigrant employment grew at a sustained pace. Employment for very recent immigrants, in particular, doubled between 2008 and 2011, bringing their employment rate to 77.0%—the second highest after their counterparts in Manitoba.

Likewise, one of the narrower gaps between immigrants and the Canadian born was also found in Alberta, where the immigrant unemployment rate was the lowest among immigrants of all provinces. Established immigrants in the province, in particular, had a higher rate of employment than the Canadian born (85.6% versus 84.4%), and the two groups had similar unemployment rates—4.1% and 4.3%, respectively.

As for Manitoba immigrants, their rate of employment in 2011 remained the highest (82.5%) among immigrants of all provinces, and their unemployment rate (6.0%) was the second lowest. The corresponding figures for the Canadian born living in the province were 85.1% and 3.9%, respectively. This makes Manitoba one of the provinces with smaller gaps in labour market outcomes between immigrants and the Canadian born. Similar to their counterparts in Alberta, established immigrants in Manitoba also had a higher employment rate than the Canadian born.

In British Columbia, immigrants experienced a slight increase in their employment, and their unemployment rate fell from 8.8% in 2010 to 7.4% in 2011, narrowing the gap between them and the Canadian born. Established immigrants, in particular, saw a notable increase in their employment, and an equally notable decline in their unemployment rate to 5.8%. At the same time, the province's immigrant employment rate edged up to 75.4%, and the gap with the Canadian born was little changed.

During the downturn, well over half the employment losses (55%) among the 25-to-54 year-olds occurred in Ontario, where two-fifths of the national workforce in manufacturing and construction is found. While both the Canadian born and immigrants were affected by employment losses, immigrants experienced a faster decline in their rate of employment and a bigger increase in their unemployment rate. This led to wider gaps between the two groups in 2009.

For Ontario immigrants of core working-age, the employment rate (75.4%) was essentially unchanged in 2011 from 2010, while the unemployment rate fell from 9.9% to 8.7%, following a decline in the number of unemployed. The corresponding figures for their Canadian-born counterparts were 83.3% and 5.4%, respectively. With little change in employment for both immigrants and Canadian born since 2010, the gaps between the two groups remained relatively unchanged.

As immigrants in Quebec saw little change in their labour market outcomes in 2011, the gaps between them and the Canadian born persisted and remained wider compared to other provinces. This was most evident among very recent immigrants (see Box Time since landing seen from a provincial angle). In 2011, the employment rate for Quebec immigrants, at 70.3%, was lower than for immigrants in any other province (Chart 3). Likewise, their unemployment rate, at 11.9%—the highest of all provinces—was double the rate of 5.6% for Canadian-born Quebeckers.

The employment rate for immigrants in the Atlantic provinces was lower than the rate for the Canadian born (77.4% versus 78.2%, respectively). Core-age immigrants in these provinces make up 4% of the total population in the region, the smallest share in the country.

Time since landing seen from a provincial angle

Overall rates of employment and unemployment for immigrants in any given province are associated with the distribution of these immigrants by time since landing. Because immigrants who landed within the previous five years tend to face more challenges in the labour market, a higher proportion of them in a given province will influence the rates for the overall immigrant population. On the other hand, since immigrants who have been in the country for more than 10 years tend to have better outcomes, a higher proportion of them in a given province will tip the balance closer to the Canadian-born labour market outcomes.

Among the four biggest immigrant-receiving provinces of Ontario, Alberta, British Columbia and Quebec, the former three have a higher proportion of core working-age people who have been landed immigrants for more than 10 years and a lower proportion of those who have been landed immigrants for 5 years or less than Quebec. At the same time, the overall rate of employment for immigrants in Ontario, Alberta and British Columbia is higher and the unemployment rate, lower, while the opposite is true in Quebec (Table 2).

Immigrant employment changes by industry

Manufacturing stabilizes, while health care advances

The bulk of the employment decline among immigrants during the downturn occurred in the goods sector. Immigrant employment in manufacturing fell by 8.2%, mainly affecting very recent immigrants. This came on top of an 11.7% decline in 2008. Very recent immigrants, in particular, were disproportionately affected, as 42% of the decline in manufacturing employment among immigrants in 2008-2009 occurred among those who had been in the country five years or less. These very recent immigrants made up 18% of the total immigrant workforce in manufacturing in 2008. Following job losses in the industry, their share fell to 15.1% in 2009.

While the rate of decline in manufacturing employment slowed from 2009 to 2011, the number of employed in the sector was notably below the pre-downturn level, both among landed immigrants (-8.2%), especially very recent immigrants (-23.6%) and the Canadian born (-13.5%).

In contrast, immigrant employment was significantly above its 2008 level in a number of other sectors, including health care and social assistance; professional, scientific and technical services; public administration; as well as business, building and other support services. As for the Canadian born, employment gains were in health care and social assistance as wells as in construction.

Over the past few years, immigrant employment has shifted from manufacturing to service sector industries, where approximately three-quarters of all immigrants are employed. Indeed, one major service industry where immigrant employment increased during the downturn was health care and social assistance—a sector that is largely acyclical and that has seen a steady increase in its share of total employment among the overall population.

In 2011, employment among people of core working-age increased by 1.0% from 2010. The bulk of the gains were among landed immigrants, especially those who had been in the country for more than 10 years. Most of these gains were in health care and social assistance, Canada's second largest sector, and in information, culture and recreation services. For the Canadian born, only construction employment increased significantly during the year (Chart 4).

Immigrant labour market outcomes by educational attainment

Following the 2008-2009 downturn, the gap in the labour market outcomes widened between university-educated immigrants and their Canadian-born counterparts—with the largest differential for immigrants who had been in the country 5 years or less. These immigrants tend to be younger and more likely to hold foreign degrees. They may need more time to go through the process of foreign credentials recognition 1  and adjust to the Canadian labour market, especially since they are more likely to be affected by unfavourable circumstances stemming from an economic downturn.

Between 2010 and 2011, employment among university-educated immigrants rose by 6.0%, nearly all in full time and among those who were established immigrants. As a result of this employment growth, the unemployment rate for university-educated immigrants fell by a full percentage point to 7.6%, while their rate of employment edged up to 78.7%.

For university-educated Canadian born, employment in 2011 was virtually unchanged from 2010, as were their rates of employment and unemployment, which stood at 90.2% and 3.3%, respectively.

Education and labour market outcomes

Overall, populations with lower educational attainment tend to have higher unemployment rates and lower employment rates than those with higher educational attainment, with the gap potentially widening during and following an economic downturn.

However, among university-educated immigrants in 2008—a peak year for the labour market—only those who had been in Canada more than 10 years had a lower unemployment rate than the Canadian born with high school graduation.

The combined effect of higher education, which country they received their highest education and longer time since landing in Canada plays a role in the labour market experiences of university-educated immigrants, as established immigrants (in the country for more than 10 years) with university education were more likely to see a narrowing of the gap between their outcomes and those of the Canadian born. In 2008, although still significantly different from the Canadian born, the employment rate gap was narrowest for established immigrants with university education. This was also the case in 2011 (Chart 5).

Average weekly wages of university-educated immigrants

Another key indicator of labour market outcomes is employment earnings, particularly for those with university education—given the higher proportion of university-degree holders among immigrants relative to the Canadian born and Canada's greater emphasis on selecting skilled and well-educated immigrants.

While the earnings gap between the Canadian born and immigrants overall was little changed over the period from 2008 to 2011, the recent downturn appears to have somewhat affected wages of university-educated immigrants who had been in the country for 10 years or less, as the gap between them and the Canadian born widened.

In 2008, very recent immigrants aged 25 to 54 and with a university degree earned 70% of their Canadian-born counterparts' weekly wages. By 2011, this figure was 67%. Similarly, weekly wages of recent immigrants with a university degree represented 84% of what was earned by their Canadian-born counterparts in 2008. By 2011, this figure fell to 79%. In contrast, the gap for core-aged established immigrants with university education was narrower and stable, as these immigrants earned 95% of their Canadian-born counterparts' wages both in 2008 and 2011 (Chart 6).

Average weekly wages for core working-age immigrants with university education were $995.87 in 2011, up 3.8% from 2008. During the same period, nominal weekly wages for their Canadian-born counterparts rose 4.9% to $1,153.28. Established immigrants had the same growth rate in their wages as the Canadian born.

Immigrant labour market outcomes by socio-demographic characteristics

Both men and women sharing in employment gains in 2011

While men bore the brunt of declines in the rate of employment during the downturn, these declines were even greater among very recent immigrant men. The employment rate gap grew wider between core-aged Canadian born and immigrant men, especially those who had been in the country for 5 years or less. The employment rate for this immigrant group was 75.7% in 2011, 9.8 percentage points below the rate for Canadian-born men. This gap was smaller in 2008, at 6.8 points, illustrating how the effect of "time since landing" was exacerbated by the downturn.

In 2011, employment for immigrant men and women of core-working age increased by 4.3% from the previous year, pushing their unemployment rate down 1.1 percentage points to 8.4%. However, due to a large increase in the population of immigrants, which outpaced their employment growth, the percentage of immigrants who were employed only edged up 0.4 percentage points to 75.6%. The employment gains in 2011 came essentially from established immigrants, mostly women.

With an employment increase of 4.5%, core-aged immigrant women saw their unemployment rate edge down 0.8 percentage points to 9.3% in 2011. At the same time, their employment rate was virtually unchanged at 68.8%—which was 11.5 points lower than the rate for their Canadian-born counterparts, a gap similar to what it was in previous years. Likewise, their unemployment rate in 2011 was nearly double that of Canadian-born women (9.3% versus 5.0%)—a gap similar to what it was in 2010 and wider than in 2008.

As for men, the gaps between immigrants and the Canadian born have traditionally been lower than the gaps between female immigrants and their Canadian-born counterparts. At 83.0% in 2011, the employment rate for male immigrants was 2.5 percentage points lower than the rate for the Canadian born. As well, their unemployment rate, at 7.7% in 2011, was 1.7 points higher. However, while these gaps narrowed compared with 2009, they remained larger than what they were in 2008.

Little change in immigrant youth employment

Youth are often disproportionately affected by economic downturns, with rapidly declining employment and rising unemployment—and the most recent downturn was no exception. The rate of employment for immigrant youth fell from 49.7% in 2008 to 45.6% in 2009. At the same time, their unemployment rate jumped from 14.0% to 20.2%.

Among Canadian-born youth, the employment rate fell from 61.6% to 57.4%, and the unemployment rate rose from 11.3% to 14.6%. Thus, while the gap in employment rates between immigrant and Canadian-born youth was little changed from 2008 to 2009, their unemployment rate gap increased from 2.7 to 5.6 percentage points.

In 2011, employment for immigrant youth was little changed from the previous year. However, their unemployment rate fell by 3.1 percentage points to 16.3%, the result of a decline in the number of young immigrants seeking work.

Consequently, the gap between young immigrants and their Canadian-born counterparts narrowed; at 19.4% in 2010, their unemployment rate was 5.2 points higher than the rate for those born in Canada. By 2011, the gap had narrowed to 2 percentage points. On the other hand, as the employment rate 2  for immigrant youth was little changed, at 44% in 2011, the gap between them and the Canadian born (14 percentage points) remained wide.

Labour market outcomes for older immigrants essentially unchanged

Following an increase of 8.0% between 2009 and 2010, employment among immigrants aged 55 and over was unchanged in 2011. Their rates of employment and unemployment were roughly at the same level as a year earlier, at 32.7% and 7.2%, respectively.

At the same time, employment among their Canadian-born counterparts grew by 5.9% in 2011, following an increase of 5.6% in 2010—further adding to the increase in their employment rate from 33.8% to 34.6%, while their unemployment rate stood at 6.0%.

Those aged 55 and over, both immigrants and Canadian born, were the only segment of the labour force that did not experience employment declines in the downturn, with employment gains over 2010 and 2011 bringing them above their levels of 2008 (+9.3% for immigrants and +17.4% for the Canadian born). See Box Older workers increasing in number.

Older workers increasing in number

Among all employed Canadians in 2011, 18% were aged 55 or over, up from 10% in 2000. The share of employed in this age group fell from 12% in 1976 to 10% during the 1990s before steadily increasing to new highs in the early 2000s.

The increase in employment and labour force participation of people aged 55 and over reflects a steady trend in population aging; in 2011, nearly one-third (32%) of Canada's population aged 15 and over was at least 55 years old, up from 22% three decades ago (Chart 7). This demographic trend is reflected in the long-term increase in the employment rate of people aged 55 and over.

Among immigrants, only those aged 55 and over had a rate of employment similar to their Canadian-born counterparts.

Immigrant labour market outcomes by region or country ofbirth

Labour market outcomes mostly unchanged for immigrants born in Asia and Latin America

Among all immigrant groups, Asian-born immigrants experienced the fastest decline in their employment rate during the downturn. In 2011, while their employment level was little changed from the previous year, their unemployment rate fell by 2 percentage points to 8.7%, as the number of those seeking work declined. At the same time, the employment rate of Asian-born immigrants was essentially unchanged, at 73.1%.

For immigrants born in Latin America, labour market outcomes were not much different in 2011 compared with 2009. Their employment rate, at 75.1%, was slightly higher than in 2010 but the same as in 2009. Also, their unemployment rate, at 10.3% in 2011, was roughly unchanged. Among all immigrant groups, those born in Latin-America had the largest increase in their unemployment rate as a result of the downturn.

Filipino-born 3  immigrants have higher employment rate than Canadian born

In each year from 2006 (when immigrant labour force data became available) to 2011, immigrants born in the Philippines have had the highest employment rate of all groups, including those born in Canada, who ranked second, while immigrants born in Europe had the third-highest rate (Chart 8). Nonetheless, Filipino-born immigrants were not immune to the downturn, as their employment rate dropped 3 percentage points to 85.0%, and unemployment rate rose 2 points to 6.1% in 2009. However, this was the slowest increase compared with immigrants born in other regions of the world—only the Canadian born had a similar increase in their unemployment rate (+1.8 points to 6.4%).

At 85.6% in 2011, the employment rate for Filipino-born immigrants was higher than the rate of 82.9% for the Canadian born, and their unemployment rate of 5.4% was similar to the rate of 5.5% for the Canadian born. These labour-market outcomes may be at least partly explained by certain education characteristics. For example, the vast majority of those born in the Philippines (79%) have postsecondary education (including university), compared with 64% for the Canadian born and 71% for the European born.

Another explanation for the difference between immigrants born in the Philippines and other immigrants may be attributable to language and the education system in this country—which is closely related to the North-American system, while "other Asian countries' educational systems are influenced by the English, French or Dutch system". Also, the Philippines uses "a bilingual medium of instruction. Certain subjects are taught in English, and the rest in the national language, which is Filipino." 4 

In addition, a higher proportion of immigrants born in the Philippines are women (60%), the majority of whom come to Canada under the Live-in Caregiver program 5  and already have pre-arranged employment.

European-born immigrants have second lowest unemployment rate after immigrants born in the Philippines

From 2010 to 2011, the employment rate for European-born immigrants edged up 0.5 percentage points to 82.6%, while their unemployment rate stood at 5.9%. In each of 2006 through 2009, European-born immigrants had the second lowest unemployment rate after their counterparts born in the Philippines.

Lowest employment rate among immigrants born in Africa

African-born immigrants—who make up nearly 10% of the immigrant labour force aged 25 to 54—were the only group that did not experience notable changes during the downturn or thereafter. In 2011, these immigrants had the lowest employment rate and highest unemployment rate compared with immigrants born in other regions, at 70.1% and 12.6%, respectively.

Since 2006, when the immigrant labour force data series started, African-born immigrants have had the lowest employment rate and highest unemployment rate of all immigrants. Those who had been in the country for 5 years or less, in particular, faced more difficulties in the labour market, as their employment rate reached a low of 55.7% 6  in 2011 and unemployment rate, 21.3%. The corresponding figures for their counterparts who had been in the country more than 10 years, however, were 77.3% and 9.1%, respectively.

According to a recent Citizenship and Immigration Canada publication, 7  nearly 19% of all very recent immigrants who come from, but were not necessarily born in, Africa, 8  the Middle East as well as South and Central America came to Canada as refugees from 2007 to 2011. This compares with 6% of Asia–Pacific immigrants and 4% of those from Europe and the United Kingdom.

As documented in the Longitudinal Survey of Immigrants to Canada, 9  refugees face a number of difficulties in the labour market compared with immigrants from other immigration categories, such as lower employment rates and more language difficulties. None have gone through the selection criteria process that economic-class applicants go through, though this does not necessarily mean that their level of qualifications is any different. Also, they do not often have strong family ties in Canada that family-class applicants have. As well, they are less likely to have been prepared for the move to Canada as skilled immigrants are—e.g., they may not have all their belongings, including credentials. Larger proportions of refugees may explain some differences in labour market outcomes, particularly for very recent immigrants from Africa and South America.