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Scotiabank Urges Canada to Close Immigrant Job-Education Gap

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Immigrant-friendly Canada needs to focus on maximizing the potential of its highly-educated newcomers at prime working age, according to the Bank of Nova Scotia.

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(Bloomberg) — Immigrant-friendly Canada needs to focus on maximizing the potential of its highly-educated newcomers at prime working age, according to the Bank of Nova Scotia.

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Recent immigrants are far less likely to work in positions that leverage their training despite being a group that’s more likely to having university degrees than Canadian-born peers, Rebekah Young, the bank’s head of inclusion and resilience economics, said in a report published Thursday. 

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Canada has set an ambitious goal to welcome 1.3 million newcomers over the next three years. With an aging workforce and a record number of job vacancies, immigrants are helping prop up economic growth, but many find it difficult to get a job that matches their qualifications.

The drivers behind this mismatch may include a lack of relevant Canadian working experience and credentials recognition for regulated sectors, as well as the economy not generating enough demand for an increased supply of university graduates — both foreign- and Canadian-born, according to the report.

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Newcomers working in jobs below their credentials face “substantial wage penalties,” Young said. Newly-arrived university-educated immigrants earned on average C$21,000 ($16,230) less annually than Canadian-born peers whose income averaged C$69,000 in 2017. That’s a wage penalty of more than 40%.

Narrowing the education-occupation mismatch would not only reduce the pay gap and improve welfare for newcomers and their families, but also support higher productivity gains and provide a small boost to national wealth, Young said. All sectors need to make collective efforts to help newcomers find employment that reflects their education and experience, she added. 

“The journey should not end when newcomers arrive in Canada and enter the labor force, rather this should just be the beginning,” she said. “There will increasingly be competition for young, highly-educated, and mobile talent as workforces age globally. They will go where their talent is best-recognized and appropriately rewarded.”



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