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Canada is wasting the talents of its skilled immigrants

Posted on: January 31, 2025

Parisa Mahboubi is a senior policy analyst at the C.D. Howe Institute, where Tingting Zhang is a junior policy analyst.

Canada is squandering a vital resource: its skilled immigrants. Newcomers drive population and work-force growth, which makes their full integration into the labour market more critical than ever. Yet many are trapped in roles far below their qualifications.

Over a quarter of recent immigrants (26.7 per cent) with a bachelor’s degree or higher work in positions requiring only a high school diploma or less in Canada. This is three times higher than the rate of Canadian-born workers, according to Statistics Canada. While recent immigrants struggle with integration, even established immigrants face persistent overqualification. This means the issue isn’t just a temporary challenge – it’s a systemic failure with broad economic consequences.

Our recent C.D. Howe report highlights the economic toll of this failure: Overqualified immigrants earn, on average, 46 per cent less than non-immigrants working in the fields they trained for. This wage gap leads to reduced consumer spending, lower tax revenues and strains on social programs and public finances. Overqualification also limits career progression, reduces life satisfaction and increases the likelihood of immigrants leaving Canada. In fact, the country has seen a significant rise in departures in recent years, reaching its highest level in two decades.

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