New findings: newcomer entry wage growth outstripped Canadian wage growth

Newcomer entry wages grew significantly, while Canadian real wages declined, according to an article released by Statistics Canada on December 9, 2024.

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The article looked at real median entry wages (“median wages”) for new immigrants to Canada one year following their admission, over the period of 2021–2022.

The authors found that over this period, median wages for newcomers grew by 6.7%, even as the overall real median wages of Canadians dropped by 1.6%. The real median entry wage among newcomers increased from $40,200 in 2021, to $42,900 in 2022.

Real wages are adjusted for inflation, meaning that inflation over this period has been taken into account such that any inflationary increases do not count toward real wage increases.

How did the median wage vary among immigration pathways?

The overall median wage one year following admission increased from 2021 to 2022 when grouping together newcomers admitted through all economic immigration pathways.

But when broken down based on economic pathway, some differences appeared:

• The median wage among newcomers admitted through the Canadian Experience Class (CEC) and business programs actually decreased;
• The median wage for caregivers and provincial/territorial nominees increased slightly; and
• The median wage for newcomers admitted through Federal Skilled Worker Program (FSWP) and the Federal Skilled Trades Program (FSTP) increased significantly.

The decrease in the median wage for CEC immigrants can be attributed to the large increase in CEC admissions—from 25,000 in 2020, to 130,000 in 2021.

CEC Express Entry draws became less competitive, meaning that candidates could receive invitations to apply (ITAs) with lower Comprehensive Ranking System (CRS) scores. Because education and work experience factor heavily into CRS scores, lower scoring candidates are likely to earn less than higher scoring candidates.

Why do median wages matter?

The authors of the article note that newcomers’ median wages “can be a good predictor of their future economic outcomes.”

For many workers, their annual earnings will tend to increase over time, so a higher median entry wage can lead to significantly greater earnings over the course of a worker’s career.

Canada’s economic immigration programs have been designed with the aim of admitting skilled workers who are likely to find gainful employment and contribute significantly to the Canadian economy through

• The labour they supply to Canadian businesses;
• The demand they have for good and services as consumers; and
• The taxes they pay to federal, provincial, and municipal governments.

Higher median wages for newcomers are indicative of greater economic prosperity, both now and in the future, so these wage increases can be seen as a success measure for Canada’s economic immigration programs.

How do newcomers’ earnings change over time?

Immigrants tend to earn more in Canada over time.

For those admitted in 2016, for example, their median employment earnings increased from $58,400 in 2017, to $76,800 in 2021, according to IRCC’s most recent annual Express Entry report.

As is also apparent in the report, while the median employment earnings varies significantly for each admission year, the upward trend line, with median wages increasing each year after admission, remains consistent across cohorts.

The wage gap—the difference in median wage between women and men—has been decreasing over time, according to the article by Statistics Canada.

In 2022, the median wage gap between women and men was significantly lower than in prior years. In 2012, the wage gap was 36.7%, and in 2022, it was 24.4%.

What factors correlate with higher earnings among newcomers?

According to a different study by Statistics Canada published in 2020, the following factors are predictive of higher employment earnings among newcomers:

• Higher amount of Canadian work experience prior to landing;
• Excellent official language proficiency;
• Higher level of education; and
• Lower age at landing.

Pre-landing Canadian work experience was the strongest predictor of higher earnings among newcomers.

A lower age at landing had a significant impact on earnings both 5–6 years after landing and 10–11 years after landing.

How do foreign nationals gain Canadian work experience prior to landing?

Foreign nationals can legally work in Canada prior to landing through a variety of programs, including

• Study permits;
• International Mobility Program (IMP) work permits; and
• Temporary Foreign Worker Program (TFWP) work permits.

Several Provincial Nominee Programs (PNPs) will support nominees in obtaining work permits. The Atlantic Immigration Program (AIP) can provide nominees with a two-year work permit.

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