A Thoughtful Approach to Global Talent Will Help Build Canada’s Economic Future

Openness to immigration has traditionally been a core Canadian value and a crucial driver of economic growth; and Canada has been widely perceived on the global stage as a successful role model for managed migration. 

But recently, in the context of housing, healthcare and cost of living crises, the increase in permanent and temporary residents has resulted in dramatic shifts in policy and public opinion. In the last couple of years, Canada has gone from setting ambitious immigration levels (500,000 immigrants a year) to implementing reactive caps aimed at curtailing the number of temporary residents. At the same time, cracks have emerged in public approval of Canada’s open approach to immigration; and it’s unlikely that the long-held acceptance of immigration will be restored without a forward-looking strategy that can demonstrably increase productivity, economic growth and collective prosperity.

Canada needs immigration—it would be almost impossible to find a sector of the economy that has not benefited from the significant contributions of immigrant workers—but it’s becoming obvious that our current approach is no longer working. We need to reshape our strategy and immigration policy to focus on the needs of the future economy and to foster an environment that will attract and retain the best international talent. Remaining open to the movement of people is the first step, but any successful approach will need to address our three most pressing challenges. 

Misalignment Between Immigration and the Labour Market

Earlier this year, RBC published a report that highlighted the misalignment between the occupations and skills prioritized in the immigration selection process and the realities of the labour market. The findings reveal that the skills immigrants bring with them and the fields of study international students choose are not the ones that address the “anticipated longer-term structural needs of the economy.” Consequently, immigration hasn’t managed to completely counteract the impact of Canada’s aging population or the shortages in the job market, even though it’s been responsible for all labour force growth in the past decade.

Supporting this conclusion, data from Immigration, Refugees and Citizenship Canada, shows that between 2018 and 2023, nearly 800,000 study permits were issued to international students enrolled in business-related programs (a low-demand industry), compared to the less than 32,000 issued to healthcare-related programs and the 36,000 to the trades, two high-demand industries. 

While the federal government has made efforts to respond to this significant misalignment issue, reactive measures to address talent gaps will only take us so far. To future-proof our economy, we need to truly understand the changes happening and the effect they will have on the jobs of tomorrow. For this, we should look to Canadian businesses. They know first-hand where the skills gaps are and in what direction their sectors are heading. If given the opportunity, they would be invaluable in helping identify and address labour market demands.

Lack of Dialogue and Collaboration Among Stakeholders

Currently, there is no unified, national approach to attracting, developing and retaining international talent that considers Canada’s specific sectoral needs as well as specific regional needs. This necessitates more collaboration among all levels of government, particularly in relation to the federal and provincial/territorial selection of immigrants. 

Regional programs characterized by the active involvement of local communities and employers, such as the Atlantic Immigration Program and the Rural and Northern Immigration Pilot, have proven to be an effective way to address local labour gaps and regional mismatches.

There is also a lack of dialogue and collaboration between educational institutions and businesses to contend with. For a long time, the international student program has been an important source of highly skilled global talent for Canada, but it seems to have lost its edge.

As mentioned previously, 27% of study permits approved or extended were in the low-demand field of business. Issuing more study and longer post-graduate work permits for international students enrolled in high-demand programs and fields would be a significant way to better align skills with labour market needs. Employers are open to hiring international students, and greater collaboration between educational institutions and businesses will ensure colleges and universities are prioritizing the skills that are in demand, helping to create meaningful opportunities for international students to fully contribute to the economy upon graduation. 

Developing greater dialogue and collaboration among stakeholders will help bring about a unified approach that is informed by regional and sectoral needs.

Mismatched Expectations and Realities  

Canada is a preferred destination for labour migration, but we’ll lose that reputation if we don’t work to maintain it. Already, since the first Global Talent Competitiveness Index published in 2013, we’ve dropped two places, putting us behind fellow G7 members, the United States and the United Kingdom, as well as six European Union members. 

Part of ensuring that we continue to attract and retain immigrants with a high potential to contribute to our economy is by creating an environment that recognizes their skills, education and credentials, allowing them to contribute meaningfully to the economy right away. After all, it doesn’t make sense to continue choosing individuals based on the skills they possess and what our economy needs if we are only going to place multiple barriers in their paths, preventing them from working in their fields upon arrival.

Around 20% of jobs in Canada are regulated, which means we have hundreds of professional and territorial regulatory authorities that create further barriers to entry and labour mobility. Expedited foreign qualification recognition will help address the urgent labour needs of priority sectors like agriculture, childcare, construction, healthcare and transportation, and allow qualified newcomers to fully participate in our economy. 

A recent intelligence memo published by the C.D. Howe Institute states that “federal officials do not collect complete skills data for about half of permanent and temporary visa arrivals.” In the absence of this data, it’s nearly impossible to determine the likelihood of these individuals being able to access employment opportunities to help address our skills gap. The loss is not just for our economy but for hundreds of thousands of immigrants who have invested their time and resources and do not see their expectations fulfilled upon arrival.

Having the right talent is fundamental to increasing the competitiveness of our economy and securing Canada’s future prosperity, making it critical that we maintain Canada’s international brand and our ability to attract and retain the best talent. Continuing with this ineffective approach will ensure that we miss out on the economic potential of immigration.

The Opportunities of Tomorrow

The pace of change is relentless. Adopting a forward-looking approach to immigration requires us to recognize the challenges of today, but also be proactive and strategic in addressing the opportunities of tomorrow.

As Canada continues to build the workforce of tomorrow, there are significant opportunities for us to be competitive in attracting and retaining international talent, but we need to develop solid policy frameworks to support targeted labour migration and mobility in the context of the skills these transitions require.

Earlier this year, the Canadian Chamber of Commerce released a report on building Canada’s net-zero workforce, that outlines the case for a federal net-zero workforce plan. Adopting such a plan would see us build a critical mass of skilled workers who will not only thrive in a net-zero economy but also help us realize it. Amidst demographic challenges and structural labour shortages in key sectors of the net-zero economy, we cannot emphasize enough the need to leverage immigration to address our skills needs. However, as it stands now, the Sustainable Jobs Plan 2023-2025 doesn’t mention immigration once.

Going Forward

Canada is in a global competition for talent. It’s critical we act with a sense of urgency to become a champion in attracting, developing and retaining international talent. Otherwise, this talent will go elsewhere and help grow the economies of our competitors instead. 

Remaining open to the movement of people will always be a key Canadian value and crucial driver of growth but holding our place in the future economy requires a new approach to immigration — one that is forward-looking and strategic, that aligns new arrivals with labour market needs, establishes collaboration and dialogue among government, education institutions and business, and ensures that the skills immigrants bring to Canada are recognized immediately. Only then will we stop missing the opportunities immigration presents and realize Canada’s full economic potential.