Productivity |  Quebec continues to catch up

Our economic immigrants earn more than Quebecers

When I saw the figures, I had a big doubt. What, our economic immigrants really earn better than the population of Quebec? And do they really earn more than their peers in Ontario?

Posted yesterday at 6:30 am

I have always been convinced of the opposite, hence my surprise. Initially, I wanted to check where the gaps were, in the context of the election campaign debate over immigration thresholds.

Because let’s face it: from a strictly economic point of view, immigrants are more welcome if they raise our collective standard of living, in particular by earning better than average wages and therefore paying more taxes to finance our services.

I checked the Statistics Canada data to be sure, and the conclusions stand. Of course, with important nuances.

First observation, therefore: the so-called economic immigrants, whom we welcome because of their particular abilities, have a better average income than the population in general, once they have overcome adaptation. The data is from the year 2019 -the most recent available- and is extracted from federal tax returns, among others.

Thus, 10 years after arrival, top economic immigration applicants had a median income of $51,400 in Quebec in 2019, or 38% more than the general population ($37,130), made up essentially of Quebec natives.

Not only do they earn more than Quebecers, but they also earn more than the same economic immigrants from Ontario ($49,800) and British Columbia ($48,500), according to data from Statistics Canada.1. wow!

Isn’t it surprising that we often see the typical immigrant in Quebec as a math major who drives a cab, compared to the high-tech entrepreneur in Ontario?

In fact, immigrants chosen for their skills end up making more than the population of Quebec, since they have studied more (46% have a university degree, twice as many as natives here).

The smarter ones will tell me the comparison is skewed, since newcomers are younger than the general population, which includes retirees, who are often paid less. Very good.

But here we are, by targeting only 25-54 year olds to erase this composition effect, the advantage favoring the top economic immigration seekers remains, although the gap narrows. Their median income in this age bracket amounts to $52,500, a difference of almost 10% with the Quebec population of the same age.

Their counterparts in British Columbia have the same median income ($52,500) and those in Ontario slightly more ($54,300), even 10 years after they arrived in the country. Alberta is in a class of its own ($65,700).

Quebec has a disadvantage: our economic immigrants take longer to reach and exceed the median income of the population than in other parts of the country. Catch-up here is typically five or six years after arrival, while elsewhere, economic immigrants earn almost as much as others upon arrival, the data shows.

Is it a language problem? Recognition of diplomas? Receptivity of the host society? Or is it perhaps the lower economic strength of Quebec 10 years ago, when they arrived, a disadvantage that has been reversed in recent years?

That said, the picture changes when we include other immigrants, including spouses and dependents of economic immigrants, as well as family-sponsored immigrants and refugees.

All inclusive, and still 10 years after arrival, the median income of all immigrants aged 25 to 54 was $42,300 in Quebec in 2019, compared to $47,830 for the population of the same age , that is, a negative gap of almost 12%.

The consolation: The gap hurting immigrants is larger in Ontario and British Columbia than in Quebec.

The difference in favor of Quebec comes from our immigration policy. Two-thirds of admitted immigrants here are economic immigrants, according to the Statistics Canada database, compared to about 50% in Ontario, which is more accepting of family reunification.

In short, our so-called main economic immigrants earn more than the population of the same age, but the other type of immigrants still work in lower paying jobs.

Added to this is the fact that the unemployment rate of immigrants continues to be somewhat higher than that of natives, as well as their rate of overqualification for occupied positions (39% compared to 26% of natives), even 10 years after admission. How is this possible with such a labor shortage?

Another element must be taken into account in our assessment of the contribution of immigrants: the future of their children. These children, who often arrive here at a young age, study in the local education system and their career prospects improve considerably.

Furthermore, according to data from Statistics Canada, immigrant children, at age 30, earn much more than Canadians at the same age. The gap in their favor reaches 13% in Ontario and 17% in British Columbia. The reason ? Again, their greater propensity to study than Canadians born here.

In other words, economists are fooling themselves when they look only at the immediate contribution of newcomers without taking into account the future of their children 15 or 30 years later.

Unfortunately, Quebec stands out unfavorably from the rest of Canada in this regard. Here, immigrants who arrived as children earn almost 6% less income, at the age of 30, than all Quebecers of the same age, even if they have studied more…

Hard to understand why. In a previous analysis I reached two conclusions, essentially, to explain the difference with the other provinces. One: there is a clear gap between the stresses of immigration on the propensity to study.

Two: Quebec offers a significantly lower salary than in other parts of Canada to immigrants who have studied here. For example, a Haitian of origin has a much lower salary in Quebec than in Ontario, even though he has a similar propensity to study2. Here there would be more discrimination, in short, although the analysis would have to be deepened taking into account, in particular, the field of study.

We hear a lot about the number of immigrants that are taken in each year and their contribution to reducing or not reducing the labor shortage. Immigrants fill jobs, but they also require health and education services, as well as housing. It is not easy to settle this debate.

The angle of analysis that I propose, with income, differs from that of the contribution of immigrants to scarcity. The fact is that it allows us to capture the contours of it, since more numerous vacancies generally push up wages, particularly those of immigrants, especially in certain positions in great scarcity.

Of course, better selection of immigrants would help, as well as better francization and integration, but according to my analysis, we also need more openness in the workplace and a longer-term view of immigration.

1- Income includes everything, salaries, wages, own income, investment income and government transfers. Only immigrants with land are counted, not temporary immigrants. Data was taken from the Immigrant Taxpayer Income Database (43-10-0027-01), updated December 2021. Data for the general population was produced by Statistics Canada at the request of Press. For the sake of brevity, the term “economic immigrant” at the beginning of the text refers to principal applicants and not their dependents.

2- The data is from 2017 and not 2019 (like the ones in this column).

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