Recent Canadian immigrants endured disproportionate economic strain due to COVID-19: Statistics Canada

The economic contributions of Canadian immigrants cannot be understated.

They are integral in helping lessen the impact of Canada’s shrinking natural labour force. At the same time, however, Canadian immigrants were disproportionately disadvantaged by the COVID-19 pandemic compared to this country’s Canadian-born population.

Job loss due to pandemic lockdowns

According to the new report from Statistics Canada, at the beginning of the pandemic, recent immigrants were more likely to “transition out of employment” than Canadian-born workers due to pandemic lockdowns. This is because Canadian immigrants held more short-tenure and low-wage jobs, such as those in the food and accommodation services industry.

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In a 2020 study referenced by Statistics Canada’s latest release, 31% of employed recent immigrants in February 2020 had worked in their positions for less than a year. Additionally, 22% of recent immigrants worked in low-wage occupations where hourly wages equalled less than two-thirds of the 2019 annual median wage ($24.04/hour). Conversely, those numbers were reported at 15% and 12%, respectively, among Canadian-born workers. The result of this employment structure became evident in April 2020, when “the rate of transition to non-employment” peaked at 13.5% for Canadian-born workers and 17.3% for recent immigrants.

Turning to the Canadian Emergency Response Benefit

Due to heightened job loss from the pandemic, recent immigrants were also more likely to apply for the Canadian Emergency Response Benefit (CERB) in 2020, indicating further struggles with economic integration during COVID-19. Both low-wage workers and workers most significantly impacted by economic lockdowns, two groups that are disproportionately represented by Canadian immigrants, were more likely to seek and receive CERB payments.

In fact, more than half (55.3%) of all workers who “earned at least $5,000 in 2019 and … were in the bottom 10% of the [2019] employment income distribution” received CERB in 2020. Likewise, almost two-thirds of all employees (66.6%) who worked in the accommodation and food services industry and earned at least $5,000 in 2019 received CERB the following year.

Drop in median entry wages for new Canadians

During the 2020 tax year, the reported median entry wage of immigrants that entered Canada in 2019 ($30,000) was 6.5% lower than what 2018 Canadian immigrants reported in the 2019 tax year ($32,100). Meanwhile, the overall Canadian population experienced a much more positive outcome, as Canadians saw their median wage rise by 0.8% between 2019 and 2020.

Note: This dip in median entry wages was most significant for immigrant women (11.1% from 2019 to 2020), while immigrant men experienced a 5.2% decline and Canadian women saw a decline of $10 year-over-year (YOY)

Economic principal applicants had better outcomes than other immigrants

Although immigrants were generally more impacted by economic disruption from the pandemic, certain categories of immigrants had less of a struggle than others.

For instance, consider economic principal applicants. These are immigrants who are admitted into Canada “based on their skills, professional experience, and ability to contribute to [the] economy”. According to Statistics Canada, this group had the lowest dip in median entry wage among all immigrant application categories between 2019 and 2020 (3%). Meanwhile, family-sponsored immigrants and refugees both experienced a decline exceeding 10 percent (13.4% and 11.9%, respectively).

Economic principal applicants also saw a growth in their median wages between 2019 and 2020, from $52,8000 to $54,800 (+3.8%). Unfortunately, immigrants in other admission categories saw their median wages decline.

Refugees: Down 7.9%
Spouses and dependents of economic immigrants: Down 4.3%
Family-sponsored immigrants: Down 3%

Immigrants with official language knowledge and pre-admission work experience were also less affected by the pandemic

The median entry wages of immigrants with knowledge of both of Canada’s official languages (English and French) rose by 0.3% between 2019 and 2020. Conversely, those with no knowledge of Canada’s official languages experienced a median entry wage decline of $2,900 YOY (18.6%). Immigrants with knowledge of one official language saw a 6.5% decline.

A similar benefit was felt among Canadian immigrants with pre-admission work experience, as it was reported that those without any such experience “saw a larger decline in their median entry wage relative to the previous admission cohort.”

Employment and total income among immigrants improving as the economy starts to recover

Fortunately, as Canada’s economy has begun to recover from the pandemic, so too are the incomes and employment realities of recent Canadian immigrants.

The median total income increased by 9.3% among immigrants between 2019 and 2020. In other words, despite experiencing a decline in median entry wages over that time, the combination of their wages and the government’s emergency supports such as CERB led to an overall $2,800 increase in median total income between 2019 and 2020. This YOY increase bested the growth in median total income experienced by all Canadians over that period (6.9%).

Furthermore, Statistics Canada reports that “employment had returned to the pre-pandemic level by the end of 2021”. In fact, between 2020 and 2021, the employment rate of Canadian-born workers increased by 2.2% while the rate of employment went up by 4.8% for immigrants of 10 years or less. Evidently, the employment rates for recent immigrants have rebounded faster than for Canadian-born workers as Canada’s economy has recovered from COVID-19.