This paper reviews how Canada values immigration for its bolstering of the labour market and economic growth, as well as Canada’s plans for a substantial increase in immigrant intake in the 2023–25 Immigration Levels Plan.

The authors point out that, historically, immigrants have faced earnings disadvantages compared to Canadian-born individuals (particularly during the 1970s-1990s), even when accounting for similar educational and work experiences. Modern studies highlight major contributors to this earnings gap: the valuation of foreign-based human capital in Canada, the importance of location-specific human capital, the critical role of language proficiency, and various integration challenges. Notably, wage-setting discrimination was not identified as a leading factor.

Informed policy changes will be necessary to address these challenges and capitalize on the potential benefits of immigration. The authors’ proposed initiatives include placing a greater emphasis on prior experience working in Canada (as a student or on a work permit), refining the selection process to prioritize language proficiency, and considering factors such as age upon arrival.