Study: PNP and CEC immigrants fare better in labour market

Immigrants who gain permanent residence through the Provincial Nominee Program (PNP) and the Canadian Experience Class (CEC) fare better in the labour market than those who immigrate through the Foreign Skilled Worker Program (FSWP) and the Quebec Skilled Worker Program (QSWP).

This is according to a study conducted by Statistics Canada in collaboration with Immigration, Refugees and Citizenship Canada (IRCC).

On August 18, Statistics Canada published two new studies, the second exploring how much Canadian work experience and pre-arranged employment can predict the labour market outcomes of economic immigrants.

Find out if you are eligible for any Canadian immigration programs

Why PNP and CEC immigrants fare better in the labour market?

PNP and CEC immigrants tend to fare better in the labour market because they are likely to have been temporary foreign workers in Canada prior to becoming permanent residents.

Temporary foreign workers gain invaluable insight into what is expected of them in the Canadian labour market. In addition, many temporary foreign workers were international students in Canada who obtained a Post-Graduate Work Permit (PGWP). In this case, they would likely have lived in Canada for several years before gaining permanent resident status. This means that not only would they have developed the ability to demonstrate the knowledge that employers are looking for, but they would also have improved their language proficiency.

This suggests that pursuing an education pathway in Canada can be beneficial for a number of reasons, including obtaining a high-quality degree, gaining Canadian work experience as well as having stronger outcomes after becoming permanent residents, than those who did not study in Canada.

The study also shows that two-thirds of permanent residents selected through the PNP were temporary foreign workers, as were practically all of those selected through the CEC.

In comparison, temporary foreign workers accounted for only a quarter of those selected through the FSWP or the QSWP.

Canadian experience is becoming increasingly important for immigration. Previous research has shown that this experience is a strong indicator that an immigration candidate will integrate quickly into the Canadian labour market.

The vast majority of PNP immigrants (93 per cent) and CEC immigrants (95 per cent) found employment in the first full year after becoming permanent residents.

For FSWP immigrants, it is only slightly lower at 80 per cent.

Since many more PNP and CEC immigrants had work experience in Canada prior to applying for immigration, this may also explain why these groups earn more than FSWP immigrants, especially in their first few years as permanent residents.

In fact, CEC immigrants earned 56 per cent more than their FSWP counterparts in the first full year after becoming permanent residents. By the fifth year, CEC immigrants still earned 30 per cent more than FSWP immigrants.

PNP immigrants also had higher earnings in the first year. However, they also had significantly lower earnings than FSWP immigrants by the fifth year after immigration.

One reason for this may be because PNP immigrants are more likely to be selected for low-skilled or medium-skilled jobs. These jobs, when compared to high-skilled jobs, tend to have slow earnings growth.

It is important to mention that FSWP immigrants still do well in the labour market. In fact, previous research shows that they integrate into the Canadian labour market quickly.

This is because FSWP immigrants possess vital characteristics that would help them succeed in Canada, such as high language proficiency and education levels. In addition, they tend to fare better than the Canadian population after a number of years.

Another highlight is that this study accounts for economic class immigrants between 2009 and 2016.

Given Express Entry was introduced in 2015, and labour market outcomes data is not as comprehensive as previous immigrant cohorts, we may see that FSWP immigrants have stronger economic outcomes in the future than previous cohorts, given the competitive nature of Express Entry.

Find out if you are eligible for any Canadian immigration programs

Labour market outcomes of Canadian work experience vs. pre-arranged jobs

The second study found that those with Canadian work experience seem to be a better predictor of labour market outcomes than pre-arranged employment. In fact, economic immigrants who had Canadian experience prior to becoming permanent residents fared better by 8 per cent in the labour market than those who did not have Canadian work experience.

Immigrants with pre-arranged jobs earned 15 per cent more than those without, during their first two years after becoming permanent residents.

This may explain why immigration applicants who have a pre-arranged job offer are given between 50 and 200 additional Comprehensive Ranking System (CRS) points, depending on the seniority of the position offered. CRS is the point system used by the Express Entry system to assess candidates who apply for one of Canada’s economic immigration programs (FSWP, PNP and CEC, among others).

In addition, immigrants who had a high income in Canada before becoming permanent residents earned almost double those who had no Canadian work experience.

This is true even after controlling for other factors, such as education.

The study also suggests that having a pre-arranged job prior to immigration was associated with a higher wage.

Generally speaking, both Canadian work experience, as well as pre-arranged employment, are important indicators for labour market outcomes.

Having Canadian work experience prior to immigration was a good predictor of immigrant earnings after becoming permanent residents. However, having a pre-arranged job was not.

Find out if you are eligible for any Canadian immigration programs

More about Canada’s economic immigration programs

Express Entry, the system the federal government uses to manage permanent residence applications through three economic immigration programs: the CEC, the FSWP and the Federal Skilled Trades Program (FSTP).

PNP candidates must still be eligible for one of the above programs should they wish to receive an invitation to apply for permanent residence through the Express Entry system.

Eligible candidates for one of the three economic immigration programs enter the Express Entry pool and are then assessed and given a CRS score. The score is based on multiple factors including age, work experience, education and language proficiency. IRCC regularly holds Express Entry draws where the highest-ranking candidates are invited to apply for permanent residence.

Find out if you are eligible for any Canadian immigration programs