Federal government must help Ontario close widening “skills gap” through immigration reforms

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The Ontario Chamber of Commerce (OCC) wants the federal government to do more to help Ontario close the “skills gap” that it says is costing the province’s economy $24.3 billion in foregone GDP and another $3.7 billion in tax revenues. The current immigration system is hampered by a lack of understanding among businesses, poor labour market outcomes for many immigrants, and certain structural weaknesses that prevent better results.

In a new report, Passport to Prosperity, the OCC claims that the skills gap is widening, though it has been a “key priority” of the business group over the past five years. A “golden opportunity” exists now for employers and governments to work together, the OCC says, and it is up to the Government of Canada to fix the immigration system and remove “barriers to opportunity” that now exist.

Evidence of the skills gap can be seen in the fact that almost four in ten businesses reported difficulty in filling job openings because they could not find qualified workers. At the same time, the number of economic immigrants to Ontario—defined as people who are selected for their skills and ability to contribute to the economy—has declined by 46 per cent in recent years. The category includes skilled workers, business people, entrepreneurs and even live-in caregivers.

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Source: Ontario Chamber of Commerce

One reason for the decline in numbers of highly-valued economic immigrants, according to the OCC, is the difficulty businesses face in recruiting them. The federal government set up an Express Entry system in 2015 to make it easier for businesses to recruit foreign workers, but the system has actually made things worse.

Under the Express Entry system, an employer must prove that no Canadian-born worker is available to do the job. Only then can the employer hire a foreign worker. If the employer is found to have been non-compliant with the rules, he could be fined up to $100,000. For these reasons, few employers use the Express Entry system, says the OCC, viewing it too time-consuming, with the risk of costing them a lot of money.

However, the Express Entry system does offer a significant opportunity for employers to recruit international talent, the OCC says. The main reason it has been less than successful is poor understanding of how it works among the business community. The federal government should do more to communicate the benefits, even the existence of the Express Entry system.

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Source: Ontario Chamber of Commerce

Canada’s inability to attract more international students, another potential source of highly skilled workers, is another issue that must be addressed. While Canada ranks eighth in the world as a destination for international students, its share of the total international student universe was just 3 per cent (2012) compared to 19 per cent for the United States. The economic impact of international students in Canada is significant: $7.7 billion spent on tuition, accommodation and discretionary spending, and more than 81,000 jobs supported.

One step the government could take would be to give foreign students who graduate from Canadian colleges and universities preference over those who did not graduate in Canada, when applying for permanent residency. This, the OCC claims, would make Canadian universities more attractive to foreign students.

Even more troubling is the waste of talent that often results in the current immigration system. Too many recent immigrants with post-secondary credentials are employed in low-skilled occupations. One of the reasons for this is that immigrants don’t always choose to settle where their skills are in demand. However, more needs to be done to help settle immigrants and find appropriate work. Leveraging the “skills and global connections” of international talent in Ontario is critical to ensuring the province’s competitiveness, says the OCC report.

However, once again, the OCC found that few employers were aware of programs already in place, such as the Ontario Bridge Training Program, which provides language training in the workplace.

It recommends that the government should open more immigration offices to provide services to refugees and immigrants. Ontario should also renew the Canada Ontario Immigration Agreement (COIA) which expired in 2011. Ontario now has no formal agreement with the federal government on immigration.

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