How Canada's Immigration Programs Are Boosting Newcomer Earnings

A recent report by Statistics Canada, published on December 9, 2024, highlights an intriguing trend in wage growth across Canada. The analysis focused on real median entry wages for newcomers one year after admission between 2021 and 2022. While the real wages of Canadians experienced a decline, newcomers enjoyed a significant wage growth of 6.7%. During this period, the median entry wage for newcomers increased from $40,200 in 2021 to $42,900 in 2022, even as Canadian real wages declined by 1.6%.

Real wages, adjusted for inflation, ensure that these figures reflect actual purchasing power and not inflation-driven increases.

Variation in Median Wages Across Immigration Pathways

The overall increase in newcomer wages masked variations across different immigration pathways:

• Decreases in Specific Pathways: Median wages for newcomers through the Canadian Experience Class and business programs dropped.
• Increases in Other Pathways: Caregivers, Federal Skilled Workers/Trades, and provincial nominees saw either slight or significant increases.

The decline in CEC wages correlates with a substantial rise in admissions from 25,000 in 2020 to 130,000 in 2021. This surge reduced the competitiveness of Express Entry draws, resulting in lower-scoring candidates with less work experience and education being admitted.

Why Median Wages Matter
Median entry wages serve as a critical indicator of long-term economic outcomes for immigrants. Higher initial wages often translate into better earnings growth over time, aligning with the goals of Canada’s economic immigration programs, which aim to:

• Supply skilled labor to Canadian industries.
• Drive consumer demand for goods and services.
• Contribute to government revenue through taxes.

Increased wages among newcomers reflect not only individual prosperity but also broader economic benefits for Canada.

Earnings Growth Over Time
Data from Immigration, Refugees and Citizenship Canada (IRCC) shows a consistent upward trend in earnings for immigrants. For instance, immigrants admitted in 2016 saw their median wages grow from $58,400 in 2017 to $76,800 in 2021.

Additionally, the wage gap between men and women has narrowed over time. The gap decreased from 36.7% in 2012 to 24.4% in 2022, showcasing strides toward greater equity.

Key Factors Influencing Newcomer Earnings
Certain factors significantly impact the earning potential of newcomers:

1. Canadian Work Experience Prior to Landing – The strongest predictor of higher earnings.
2. Official Language Proficiency – Excellent command of English or French enhances opportunities.
3. Education Level – Higher qualifications correlate with better wages.
4. Age at Landing – Younger immigrants tend to experience greater earning growth over time.

Pathways to Gain Canadian Work Experience
Foreign nationals can obtain valuable Canadian work experience before immigrating through:

• Study Permits: Opportunities for work during and after studies.
• International Mobility Program (IMP): Work permits that facilitate temporary employment.
• Temporary Foreign Worker Program (TFWP): Work opportunities for skilled roles.
• Provincial Nominee Programs (PNPs): Work permits supported by specific provinces.
• Atlantic Immigration Program (AIP): Two-year work permits for nominees.

This experience plays a pivotal role in fostering stronger economic integration and higher earnings upon immigration.

By analyzing trends and addressing key factors, this report underscores the significant role of immigration in Canada’s economic landscape, offering valuable insights for policymakers and stakeholders alike.