How Lack of Affordability Could Scare Off Immigrants Canada Wants to Retain
When Nicaraguan-born Franco Rayo moved to New Brunswick in 2017 as an international student, he was open to the idea of settling in Canada.
Rayo earned his MBA from the University of New Brunswick in 2018 and landed an auditing job that paid $45,000 a year. With dual degrees from the United States and Canada, Rayo says finding work was difficult and the pay he was offered was disappointing.
“My problem was that they offered me entry-level jobs,” he said. “I don’t know if it’s because I’m from another country.”
With a wife and a young son, Rayo says he dipped into his savings to maintain the lifestyle he wanted for his family.
Their situation ultimately led Franco, 33, and his wife Natalie Rayo, 29, to drastically change their lives. About a year into the pandemic, the family of three packed up and headed to Nicaragua.
Although the rising cost of living — with inflation soaring to 6.7% — affects all Canadians, the reality is that new immigrants still earn less than the general population.
Now, a recent survey conducted by Leger in partnership with the Institute for Canadian Citizenship suggests that the cut could hurt the retention of new immigrants.
“Canada tells a story about being this haven for newcomers, and we wanted to see how true that was,” said Daniel Bernhard, CEO of the Institute for Canadian Citizenship (ICC). .
planning to leave
The federal government does not track migrant retention, but according to Statistics Canada, 50% of international students had no tax records a year after graduation, suggesting they left the country.
In the ICC survey, 23% of new Canadians with a university education said they planned to leave the country in the next two years.
For new Canadians under 35, that figure was 30%. However, it is unclear how this compares to previous years’ intentions.
The survey was conducted between February 24 and 28 with 2013 respondents using an online panel. Although a precise margin of error cannot be calculated, for comparison, a probability sample of 2000 respondents would have a margin of error of ±2.5%, 19 times out of 20.
Rayo is now settled in Managua with his family and runs his own business, although he has retained his permanent resident status in Canada. His wife Natalie, who grew up in New Brunswick, says they enjoy a better quality of life than in Moncton, feeling less financially unprepared.
“I didn’t expect to move to Nicaragua, but as far as our future, my husband, me and my son, it was the best option for us,” she said.
At the national level, there are consequences if immigrants choose not to stay. The country is facing a labor shortage and policymakers hope immigration can help fill labor gaps – with plans to transition more than 400,000 new immigrants to permanent residents This year.
Between 2016 and 2021, the number of people aged 65 and over grew six times faster than that of children aged 0 to 14, a finding that has serious implications for the economy.
Cost of living will push immigrants to leave, survey finds
However, immigrants have consistently reported employment-related difficulties, with many being forced into low-skilled jobs despite their foreign credentials.
According to Statistics Canada, the median income of immigrants admitted to Canada in 2018 was $31,900 a year later. Although this is the highest level since 1981, it is still 18% lower than the median income of the general population.
Today, newcomers also face a crisis in housing affordability and record inflation, which begs the question: how attractive is Canada to immigrants?
Berhard said the survey results should give Canadians “pause”.
“We have to ask ourselves what advantages Canada offers to immigrants because we are competing with the rest of the world,” he said.
“People are not able to earn their real potential,” he said. “The standard of living they could reasonably expect or even have in their home country is becoming less and less attainable.”
In the survey, 64% of new Canadians agreed with the statement “the rising cost of living in Canada means that immigrants are less likely to stay in Canada”.
According to Statistics Canada, 31% of recent immigrants spent more than 30% of their income on housing costs, compared to only 18% of the general population.
Not enough data on immigrant retention
Economist Mikal Skuterud of the University of Waterloo says it’s difficult to draw conclusions from the survey due to the lack of data from previous years.
This underscores the need for the federal government to track how many people are leaving the country and why they are choosing to leave, he said.
“A big part of the challenge for Canada and policymakers is not just attracting immigrants with high levels of human capital, but also retaining them,” Skuterud said.
The economist says there is a risk of losing the most skilled immigrants to the United States where wages may be more lucrative.
However, Skuterud doesn’t believe the cost of living is likely to drive immigrants away en masse.
“When people are choosing where to move or if they are moving, what they are doing is assessing their economic well-being in one place versus another,” he said, adding that many countries of the world are also struggling with high inflation right now.
“Migration is very expensive and inflation is a temporary phenomenon,” he said. “The idea that people will suddenly uproot themselves and go somewhere else, I don’t think is believable.”
Highlighting the immigrant experience
When Manpreet Kaur and Harmeet Singh immigrated to Canada in 2018, the couple struggled to find information on how to navigate the country as new immigrants.
This led them to create their own YouTube channel.
“We thought about making videos and [sharing] our trip,” Singh said.
The couple’s YouTube channel “Canadian Couple Vlogs” has over half a million subscribers and features videos on everything from how to move to Canada to life after immigration. They even have a video on why immigrants choose to leave Canada.
“No one shares their failures and no one shares the challenges they face in Canada,” Singh said.
From cold winters to the cost of living, Singh said there are many challenges immigrants face in Canada that they should be aware of before moving.
Singh and Kaur had mentally prepared for some of these challenges, expecting to take a financial hit early on.
Although the couple managed to find work within months of arriving, Singh says his lack of work experience in Canada has been a barrier when applying for jobs. Fortunately, however, his experience working for Walmart in India helped him land a job with Walmart Canada, he said.
If it hadn’t been for the couple’s IT jobs and the YouTube channel serving as a side hustle, Singh says “it would have been very difficult.”
Bernhard, of the Institute of Canadian Citizenship, says there is a failure to fully “assess” the skills and value that newcomers have to offer. And with many employers reporting difficulty finding workers, he says they need to better recognize the skills immigrants have to offer.
“It’s not just a moral or ethical imperative. It’s also your competitive advantage in the marketplace,” he said.