Untapped Potential: Canada Needs to Close Its Immigrant Wage Gap

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In their recent Economic report, RBC Economics takes a closer look at findings as it relates to the widening Immigrant wage gap in Canada and the impact to Canada’s broader economy.

When it comes to attracting immigrants, Canada is a success story. In August, the OECD called our labour migration system comprehensive and responsive—a global model for immigration management.

While Canada is drawing in some of the best and brightest, especially due to an increased focus on highly skilled, educated immigrants, our success in integrating those newcomers into the labour force falls short, at least on one key measure: earnings.

In 2019, immigrants in Canada earn around 10% less on average than Canadian-born peers. The immigrant wage gap is broad-based. And it’s persistent: it has widened over three decades.

8 Key Findings of the report


1. Immigrants earn about 10% less than those born in Canada; 30 years ago the gap was less than 4%


2. The immigrant earnings gap spans occupation, age, gender and region


3. The immigrant earnings gap has worsened even as immigrants have become significantly more educated than the Canadian-born population


4. The immigrant earnings gap for those with a university education aged 45-54 is about 18%


5. Only 38% of university-educated immigrants aged 25-54 work in an occupation requiring a university degree, compared with 52% of those born in Canada


6. Immigrants’ tendency to work in lower-paid occupations relative to their education only accounts for about 40% of the earnings gap


7. The Canadian labour market appears to discount foreign labour market experience


8. Bringing immigrants up to the wage and employment levels of those born in Canada has the potential to add $50 billion to GDP


Read the full report