Canada’s decision to land over 400,000 immigrants in 2021 has come at a cost

The Canadian government entered 2021 with an ambitious immigration goal.

Despite all the challenges being caused by the pandemic, it wanted to land 401,000 new immigrants, the highest total since Canada became a country in 1867.

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In a recent press release outlining the steps it is taking to improve application processing, the government noted Canada had in fact surpassed its target and landed some 405,000 immigrants last year.

Congratulations are in order to Immigration, Refugees and Citizenship Canada (IRCC). Achieving this target during an extremely difficult operating environment is commendable. The pandemic continues to pose challenges for applicants and the immigration department alike, yet IRCC managed to defy all odds and land a record number of new permanent residents. Congratulations are also in order to the many new permanent residents who can now go on to pursue their hopes and aspirations in Canada. These include permanent residents who have benefitted from special measures and policies during the pandemic such as IRCC reducing its Express Entry score requirements and introducing an immigration program for essential workers and international graduates in 2021.

IRCC is clearly proud of the achievement, as it issued a press release celebrating it right before Christmas.

Consequences of the 401,000 newcomer target

On the flip side, IRCC has recognized the decision to pursue 401,000 landings in 2021 has resulted in negative consequences. Regrettably, these consequences could have been avoided had the Canadian government chosen to pursue a more sustainable immigration policy last year.

The purpose of increasing the immigration target was primarily to promote population, labour force, and economic growth, while also continuing to reunite families and help refugees. Given that some 60 per cent of new immigrants fall under the economic class, it is safe to say Canada's main immigration objective is economic in nature.

And yet ironically, the Canadian government's goal last year undermined its own objective of supporting the economy via immigration. It decided to focus on transitioning more people from within Canada to permanent residence. Prior to the pandemic, about 30 per cent of new economic class permanent residents transitioned from within Canada, while 70 per cent arrived from abroad. Last year, this was reversed, as 70 per cent of new economic class landings came from within Canada, while 30 per cent came from abroad.

A first consequence of this decision is the reduced flow of new immigrants from abroad is contributing to weaker population, labour force, and economic growth. Canada's population growth is the weakest since 1915/16. Prior to the pandemic, Canada's population was growing by over one per cent per year which was the highest rate among highly developed countries. Some 80 per cent of annual population growth was thanks to immigrants moving to Canada.

Reducing the share of new economic class immigrants coming from abroad last year has also hurt the labour market. Immigrants were comprising 80 per cent or more of Canada's new workers each year. The limited foreign arrivals is contributing to the highest job vacancy rate in Canadian history, with nearly 1 million jobs currently unfilled.

Pursuing the target has also led to IRCC reducing its selection standards. When it launched Express Entry in 2015, IRCC said the new Comprehensive Ranking System (CRS) was a scientific way of selecting candidates best positioned to succeed in the labour market.

Prior to the pandemic, a candidate needed a CRS score of around 470 to be invited to apply for permanent residence. Last year, however, IRCC brought the score down to as low as 75, so it could get more in-Canada candidates to count towards its 401,000 admissions target. In other words, the Canadian government felt it was more important to achieve this target than to use the evidence-based criteria it has set to evaluate an Express Entry candidate's suitability to succeed in our economy.

This is not to say that those with lower CRS scores are unable to contribute to Canada. History shows that immigrants of all socio-economic backgrounds do make overwhelmingly positive contributions. But rather, this observation is meant to point out the disconnect in the Canadian government's immigration policy.

It remains to be seen how well those who gained permanent residence via Express Entry with a lower CRS score will do in the labour market. Chances are they will do just fine, but IRCC and Statistics Canada research strongly suggests candidates with higher human capital end up with higher earnings and better overall labour market outcomes. If this holds true, IRCC will have given up the opportunity to select higher-potential immigration candidates in exchange for breaking Canada's annual admissions record.

IRCC concedes that the focus on the target has made backlogs even worse. The department now sits on a backlog featuring 1.8 million people, up from 1.5 million in July 2021. This is because IRCC focused on processing in-Canada applications while existing and new applications were given less priority since they would not count towards the 401,000 admissions goal. Unfortunately, this is creating a vicious cycle.

The backlog will continue to slow the arrival of economic class immigrants from abroad, further stalling labour force and economic growth. In addition, family reunification and refugee resettlement processing will remain slower.

As noted, IRCC and Immigration Minister Sean Fraser came out on January 31 to do some damage control by acknowledging the scale of the backlog problem and outlining the steps being taken to get processing times back to IRCC's service standards.

This is a positive step but there are other things the government can do in the meantime to get the immigration system back on track.

Suggestions to get the immigration system back on track

It would be beneficial for IRCC to communicate to the public its strategy to tackle the backlogs. Applicants have a right to know where they stand and when they can expect decisions to be made on their files. It would be better for IRCC to be transparent and honest about the actual length of time it is taking to process a given application stream as opposed to the current approach of applicants being left in the dark for much of the process.

IRCC also needs to sustain its processing capacity at a high level throughout the year. Its processing capacity understandably fell immediately following the pandemic. However it was not until June 2021 that it began to finalize permanent residence applications at a much higher rate and they eventually managed to finalize over 500,000 in total last year.

According to IRCC, sustaining this level will see it get through its entire permanent residence inventory by the end of this year. IRCC should keep up this pace beyond 2022 so that all applicants see their files processed in a timely manner.

IRCC should also resume Express Entry invitations to Federal Skilled Worker Program (FSWP) and Canadian Experience Class (CEC) candidates immediately for a variety of reasons.

First, Express Entry is crucial to Canada's economic recovery and alleviating current labour shortages.

Second, given its current Express Entry inventory, IRCC should be able to reduce processing times for new Express Entry applications by the second half of the year, and hence issuing Invitations to Apply (ITA) now would not create significant additional pressure for the department since they will be in better position to process such applications in a timely manner once they are submitted (applicants have up to 60 days from when they receive an ITA to submit a completed permanent residence application).

Third, the rationale for pausing FSWP invitations (travel restrictions) has not existed since Canada lifted travel restrictions on all Confirmation of Permanent Residence (COPR) holders in June 2021. It is also worth noting IRCC has been processing work permit, study permit, and temporary resident visa applications of those abroad over the past year, so there is little justification for the slow pace of FSWP application processing.

Fourth, resuming draws would help to restore Canada's global competitive standing. The pause in FSWP draws over the past year has caused global talent to consider their immigration options elsewhere.

Fifth, a sustained pause in draws will see thousands of CEC candidates lose their status in Canada and the absence of a solution by IRCC will force such individuals to leave Canada.

This leads to a final suggestion: IRCC should introduce another temporary public policy to allow those in Canada seeking to remain as a permanent resident to extend their temporary status in an easier way. For example, it can offer a one-time work permit extension to all CEC candidates residing in Canada that have been affected by the pause in Express Entry invitations to them since September 2021.

IRCC did something similar last year when it offered a one-time 18 month work permit extension to Post-Graduation Work Permit (PGWP) holders so they would have more time to obtain permanent residence. Among the benefits of this approach is it would give Canadian employers sustained access to such work permit holders and would mitigate the labour market risks of seeing tens of thousands of workers having to leave Canada due to the expiry of their work permit status.

The Canadian government can not undo the past, but what they can do is think creatively to come up with solutions to the negative consequences that have occurred due to their pursuit of over 400,000 immigrant landings in 2021. Coming up with effective solutions will be to everyone's benefit and would be another major reason to commend IRCC.

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