Canada’s hardest-hit economies need immigration to thrive again

Our current system—in which we educate young people and then deport them—makes no sense and harms growth companies

Protester holding a sign reading “Good Enough To Work, Good Enough To Stay”

Immigration reform protesters in Toronto in 2015. (Roberto Machado Noa/LightRocket/Getty)

A recent CBC discussion between Prime Minister Trudeau and “Neil from London, Ontario” have left pundits from Aaron Wherry to Adam Radwanski wondering what, if anything, can the federal government do for London and the rest of the southwestern Ontario rust belt.

Neil, a former 58-year old former manufacturing worker, worried about his future and the future of his city, asked the Prime Minister how prosperity could be brought back to the region. The conversation was rather awkward, and as Wherry described left more questions than answers:

Neil came away unsatisfied with the answers and Trudeau later pleaded that there was only so much a prime minister could do, but all that seems worth discussing. How did Neil from London get to this point and what can be done for him now? Those are worthy questions, perhaps given greater resonance than if an MP or member of the press had merely invoked the idea of someone like Neil.

Radwanski was even more blunt, concluding that:

But there are too many Neils from London for Mr. Trudeau to have had no answer at all. A prime minister who came to office on a wave of optimism needs to find a way to provide a bit of it even to the sorts of hard-hit people who only rarely and fleetingly turn up on Ottawa’s radar.

There is no shortage of these “sorts of hard-hit people,” as manufacturing jobs like Neil’s were killed off in the hundreds of thousands, thanks to a combination of automation, globalization and a petro-fueled escalation of the Canadian dollar’s value, as I describe in Reforging Ontario.

So how do you help out Neil and the rest of London, Ontario? It is a tough problem, because the twin forces of automation and globalization are only escalating and the industrial capacity killed off by the petroloonie is not coming back, even with the recent fall in oil prices. The short answer must lie, in part, in the growth of local companies—particularly startups—to create economic growth and jobs at all skill-levels.

This is where we run into another problem plaguing the Southwestern Ontario rust belt. A necessary condition for a healthy ecosystem of startups and growth companies is a large and growing pool of young talent. But demographic change is working in the other direction. From 2001 to 2014, the population of people 40 or older increased by 47,276. And those under 40? It decreased by 2,454. While this is an issue across Canada, it is less so in large centres. For example, while the Toronto CMA’s over-40 population increased by 858,000, the under-40 crowd also saw an increase of 314,000 persons.

So how can London, Windsor, St. Catharines et. al. increase their population of talented twentysomethings? The region does an excellent job of importing talent as our institutes of higher education are worldwide magnets for young achievers. In London, Western and Fanshawe bring in some of the most gifted students in the world, teach them skills highly in demand in the region while they become familiar with Canadian culture. We then allow these graduates to stay in the country for a period of up to three years via Canada’s Post-Graduation Work Permit Program (PGWPP); tech companies Darren Meister, Kadie Ward and I interviewed in London told me how incredibly valuable these workers are.

They also told us that, despite these workers having graduated in Canada and being in the country around seven years, the Federal government makes it difficult (and some cases impossible) to keep them in the country. They are sent back home, and London has fewer talented young workers.

The issue stems, in part, from year-old changes to Canada’s express entry system which makes it impossible for someone in the PGWPP program to gain express entry without a Labour Market Impact Assessment, as chronicled by Nicholas Keung:

The problem, which the federal government denies, lies in the significance given to a certificate called the Labour Market Impact Assessment (LMIA). It is issued by Ottawa to ensure a candidate’s skills are sufficiently in demand to warrant hiring an immigrant.

Ottawa says applicants for Express Entry, such as international graduates, do not need an LMIA to qualify. But Express Entry acceptance is based on a point system and it’s not possible to earn enough points without an LMIA, immigration experts say.

“The new system is flawed,” said Toronto immigration lawyer Shoshana Green. “We want people who went to school and have work experience in Canada. These people are already fully integrated. And now we are ignoring them. It is just bizarre.”

The process to obtain a LMIA is arduous for smaller growth companies, and navigating it can be difficult, as immigration lawyer Ronalee Carey describes:

Last month I sent a young woman back to Japan. She’d come to Canada as an international student first to finish high school, then to attend Sheridan College in their Animation Program. Her employer consulted me after their Labour Market Impact Assessment (LMIA), because her position was denied. They had been paying her the median wage for Ontario, as opposed to Ottawa, which was slightly higher. Meanwhile, they had no idea there were median wages specific to Ottawa. They offered her a raise and resubmitted the LMIA application.

But it was too late.

The young woman had been working on a post-graduate work permit. It had expired, and she’d applied for an extension. However, a positive LMIA was required for the extension. Ultimately, her work permit application was denied, because the new LMIA application had not yet been processed.

And so on the plane she went.

These stories are all too common according to the tech firms I have spoken to. In order to obtain an LMIA, one must prove to the federal government that “there is a need for the foreign worker to fill the job you are offering and that there is no Canadian worker available to do the job.” Not only does this place a large burden on growth companies to convince a bureaucrat about the lack of Canadians for the position, it is also completely counterproductive for communities where there is a desperate need for young talent. Furthermore, it may be impossible for these companies to prove this point to the government’s satisfaction. As immigration lawyer Evan Green asked the Globe and Mail, “…how do you prove for someone with [little] work experience that there is no Canadian to do the job?”

Southwestern Ontario is desperate for economic growth from startups. Startups are desperate for these talented workers. These workers are desperate to stay in Canada. Yet we are kicking them out. It makes absolutely no sense. If the federal government truly wants to help London and the rest of southwestern Ontario, the place to start is to recognize the region needs talented young people and to reform the Express Entry system to allow us to keep more of our graduates.


6 comments on “Canada’s hardest-hit economies need immigration to thrive again

  1. I agree that we should be trying to recruit the most talented people who are capable of producing innovative, creative products. This is a key factor in the success of companies such as Google. However, attainment of a university degree, even if it is at the masters or PHD level is not proof that the individual is genuinely capable of doing highly innovative, creative work. We have greatly expanded our university system and a much higher percentage of Canadian born students now receive a university education. We are at the point where allowing every international student to stay in Canada after graduation and recruiting large numbers of university educated immigrants will simply result in an excess of university educated people looking for work. We need to be more selective but the hard part is determining which jobs truly require exceptional people, versus situations where a corporation is trying to recruit international students or immigrants as a way to drive down wages and acquire a more compliant work force. To use an IT example, the majority of IT workers would not be capable of developing a complex software application though they may do a fine job of pc desktop support, system administration, network administration,etc. Thus companies that are trying to develop complex, leading edge applications really do need to be able to recruit internationally whereas it should be possible to fill most IT positions with Canadian born graduates.

    • A university degree is not the only point in determining whether the person is talented or not, however, in order to gain the degree, university students should act somehow better performances than high school and even college students.
      Now, the key point isn’t about if they are talented, in fact, university students don’t even have a platform to perform their skills. LIMA certificate totally blocks those students, who have already spent over 7 years to study, to have the chance to stay.
      Me, as a international student, I have been stayed in Canada for 8 years, I have been working for 1 year and half. Now? what? as a programmer, my immigration score still much behind the required score.
      The LIMA is flawed, and it is only prepared for immigration agencies, who are able to “create” chances for those people that are willing to pay commissions. However, for people like us, no matter how big contributions we made to Canada, Canadian’s government looks like never care about.

    • It feels like that Canadian government is brutal, and ignorance of the humanity. They’d like to spend thousands of millions dollars to bring in refugees, rather than international graduates, who have feelings about Canada. They spent their best time of their life to study in Canada, to make contribution to Canada. What about now? they don’t even have the chance to extend their stay. So disappointed.

    • How about getting our own trained? Canada does not look after its own, but it will look after foreigners! There are 35-40 thousand people out of work who would gladly go for retraining and get a new job…. I am one of them… Tradespeople is becoming a hot topic in Ontario as well since the introduction of the OCOT. People are letting their certifications lapse because of the overinflated renewal fees, and they do absolutely nothing for the tradespeople of the province. I let my automotive ticket lapse, I refuse to pay such a huge increase while I have to update my tools every year that I pay taxes on, earn them tax dollars, and at the end of the year pay taxes if I had a good year! Something wrong with this picture here. All I have to show for my hard work is a piece of crap house, vehicle, but I have 75 grand worth of tools in order to make a living!!! I also suffer lots of aches every day to get up and earn a damn living. Just think, in 20 years I can retire if I’m not in a wheel chair by then with multiple health issues.

  2. Fact 1. People only have so much money to spend. Fact 2. If people want to purchase something instead of waiting to pay cash they borrow. Fact 3. People can only borrow so much before it becomes burdensome. Fact. 4 The banks under the watchful eye of the government have allowed consumers to go into far to great of debt in order to try to “stimulate the economy”. Fact 5. The government is ok with consumer debt because it stimulates the economy and brings in more tax money. Fact 6. The banks have no problem giving out loans because they make more money. Fact 7. Neither the banks nor government want to see any reduction in their “profits” so they have allowed the banks to borrow more so the can tax more.

    Eventually though the ponzi scheme runs into a wall because people can only afford to get into so much debt and the banks can only afford to give out so many loans, and the government can only tax so much without revolt.

    Nobody wants to see a down year or down years in the economy, its hard on corporate profits, its hard on government taxation, its hard on jobs…

    But eventually the banks, the government and the consumers hit the limits of what can be done.

    You can’t expect people to take on more debt just to stimulate the economy, But in this article the Author makes it sound like the problem is that people are hoarding money in bank accounts and not spending it in order to stimulate the economy? Has the author done any research to see how little people in Canada have saved? The notion is preposterous. We cant all ways have growth it just doesn’t work like that.

    The Government has over promised and over borrowed.
    The Banks have over leant.
    The consumers have over spent.

    We have moved to a debt based economy and now it has run its coarse. We all just need to be fiscally responsible and get used to having, promising and borrowing less. We should pay off our debts and become an asset and resource based economy instead, which involves responsible saving and responsible spending on all three levels.

  3. Great. More people for the banks to lend money to and for the Government to tax…