Executive summary

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Economic and social outcomes of immigrants and their children is a major policy concern in Canada. Immigration to Canada is currently at high levels by historical standards, and it is likely to remain there. Many policy analysts and business people believe that pending labour shortages should result in more, not less, immigration.

These high immigration levels have introduced significant change in Canada's social and economic landscape; and outcomes for immigrants have changed significantly over the past two decades. This paper outlines the significant response by Statistics Canada to the demand for both more empirical research on immigration issues, and the development of new data sources to support such research.

Research as early as the late 1980s suggested that the traditional patterns of economic outcomes had been changing, and not for the better. Research conducted by Statistics Canada researchers and others demonstrated that the earnings gap during the first few years in Canada between immigrants and the Canadian born has been increasing, in spite of rising educational attainment of immigrants. Furthermore, low income among successive groups of entering immigrants has been rising, both in absolute terms and relative to the Canadian born.

Research points to a number of potential reasons for this deterioration, but the three most often highlighted are (1) the change over time in the regions from which immigrants have come, and associated issues such as language skills, school quality, etc.; (2) declining economic returns to foreign work experience, to the point where by the late 1990s most entering immigrants received virtually no economic benefit for work experience acquired prior to entering Canada; and, (3) the deterioration in labour market outcomes for new labour market entrants as a whole, of which immigrants are a subset. However, recent research has argued that these determinants do not apply after 2000. The more recent deterioration is seen to be related to the dramatic rise in the number ofinformation technology (IT) workers and engineers entering Canada, and the difficulty in their locating employment, to some extent associated with the IT downturn from 2001 to 2004. Research reviewed in the paper also asks to what extent changes in immigrant characteristics since 1993 have contributed to an improvement in economic outcomes. It finds that changing immigrant characteristics improved economic outcomes for immigrants at the middle and top of the income distribution, but had little positive effect at the bottom of the income distribution. As a result, the changes in selection patterns, and resulting change to immigrant characteristics— mainly rising education levels—had only a very small positive effect on low-income rates among entering immigrants.

The economic deterioration among first-generation immigrants is not the only concern. The outcomes of their children are equally important, if not more so. Here, the research paints a more positive picture. Most second-generation Canadians attain very high levels of education, and as a result, do very well in the labour market. Their educational and economic outcomes are seen, on average, to be equal to or better than those of their Canadian-born counterparts.

Regarding the perception of immigrants of their life in Canada, in spite of difficult economic outcomes experienced by many in recent years, by and large they remain positive regarding their decision to come to Canada. When asked about their views of Canada, after four years immigrants entering Canada in 2000 indicated that they most appreciated the freedom, rights, safety and security, and prospects for the future that Canada had to offer. Among the challenges they faced, many pointed to economic issues such as locating employment. After being in Canada for four years, about three quarters of the 2000 immigrants said that they would make the decision to come to Canada again.

Although virtually no research has been conducted on the topic at Statistics Canada, the paper includes some speculation regarding why immigration has had relatively little negative effect on social cohesion in Canada, particularly as compared with some European countries. A number of potential reasons are discussed, including the fact that unlike many nations, Canada has never pursued a single national identity. Starting with confederation in 1867, Canada has had to accommodate two groups with very different religious, cultural and language characteristics, the French and the English. A tradition of such 'accommodation' has developed as a result. Furthermore, Canada thinks of itself as a land of immigrants, and most Canadians take pride in the country's ability to welcome newcomers. Other factors that could contribute to the lack of serious negative effects regarding social cohesion may include (1) the very high levels of education among entering immigrants, much higher than among the Canadian born; (2) the fact that all political parties at the federal, provincial and municipal levels argue that more immigration is necessary due to upcoming labour shortages, and this message is largely accepted by the Canadian population; (3) the relatively high level of civic engagement by immigrants in Canada; (4) the very racially diverse nature of immigration to Canada; and, (5) the lack of any significant issue regarding illegal immigration.

Faced with tremendous interest in immigration issues, Statistics Canada responded both by using existing data sources, such as the census, to shed light on important issues and, along with policy department partners, creating a number of new datasets, mainly longitudinal. While the census remains the most important data source for addressing many immigration issues, in part because of its large sample size, there are a number of more recent dataset creations. The first was the Immigrant Longitudinal Database (IMDB), a data source based primarily on administrative data, and created in partnership with Citizenship and Immigration Canada. This was followed by linking the IMDB to an existing administrative data source developed by Statistics Canada and referred to as the LAD (Longitudinal Administrative Databank). The advantage of the latter administrative file is that it contains longitudinal income information on other Canadian as well as immigrants, allowing for comparisons among groups. The IMBD is restricted to data on immigrants only. However, the administrative data sources contain a restricted set of variables. To overcome this issue the Longitudinal Survey of Immigrants to Canada (LSIC) was created, again for Citizenship and Immigration Canada. It tracked a sample of immigrants who entered in 2000 for four years to address issues such as education, housing, employment, health, attitudes, social networks and economic outcomes. In addition to these new data sources, the Ethnic Diversity Survey of 2002, created in partnership with Heritage Canada, and the addition of immigration identifiers to the Labour Force Survey in 2007, provide addition information for researchers and policy analysts concerned with immigration issues.

The significant response by Statistics Canada to the demand for both research and new data related to immigration issues demonstrates some of the priorities in place at the Agency. These include (1) the importance placed on substantive research by Statistics Canada, often for data quality and data development reasons; (2) the importance of meaningful co-operation with its policy department partners in developing data and research; and, (3) the need to maintain strong links with the academic community so as to be aware of their data needs, the most recent research issues and methodologies, and to promote recruitment.