Global Economics Ltd

This paper examines the performance of recent immigrants to Canada in the labour market as revealed in the Longitudinal Immigration Database (IMDB). This is an administrative database constructed by Statistics Canada by combining an administrative landing file from Citizenship and Immigration with the T1 Family File (T1FF) of income tax returns from the Canada Revenue Agency. As this database now extends to 2012, it provides the most current evidence on the impact on the labour market performance of recent immigrants of the relatively ambitious immigration reforms introduced by the Conservative Government. These reforms involved tighter criteria for skilled workers, an expansion of the Provincial Nominee Program, and a tightening up on refugee claims. The conclusion of the paper is that the overall performance of recent immigrants has improved enough to modestly reduce the wide earnings gap that has opened up between average recent immigrant and overall earnings. However, the reduction in the earnings gap has not been very large given the ambitiousness of the immigration policy reforms. There are many reasons for this, but the most important is that the Conservative Government has continued to pursue a policy of high mass immigration admitting around 250,000 new immigrants per year right through the 2008-09 recession. Ironically, while the Government has cut back on the number of relatively high performing skilled workers admitted, it has actually increased the number of live-in caregivers, and their families who predominantly are low earning. On the other hand, it is clear that if the Conservative Government had not tightened up immigration policy as aggressively as it did, particularly by eliminating the backlog of workers admitted under the old less stringent criteria, the labour market performance of immigrants would have probably deteriorated, instead of improving modestly as it did.