Canadian immigrants are overqualified and underemployed — reforms must address this

Marshia Akbar (external link) , Anna Triandafyllidou (external link) , Toronto Metropolitan University (external link) 

Recent immigration reforms in Canada have cut international student and temporary resident numbers (external link) , restricted work permits for them and their spouses and aim to reduce permanent resident admissions (external link)  by 21 per cent in 2025, with further cuts ahead.

Such changes are aimed to avoid competition (external link)  with local unemployed Canadians at a time of rising unemployment. However, these changes may eventually intensify dysfunctions in the Canadian labour market.

With an overall unemployment rate of 6.6 per cent (external link)  and a youth unemployment rate of 13.6 per cent alongside a worsening housing crisis, these policies reflect growing pressures.

However, blaming newcomers — particularly international students and their spouses — for job shortages overlooks deeper structural issues in the labour market. Canada’s labour market struggles are not caused by the number of newcomers, but by systemic issues such as underemployment and skills-job mismatches.

Unemployment and underemployment

While rising unemployment is affecting everyone, newcomers have been hit especially hard. In 2024, the unemployment rate for immigrants hit 11 per cent (external link)  — more than double the 5.6 per cent rate for Canadian-born workers.

Underemployment is also a persistent issue for immigrants. In 2021 (external link) , only 44 per cent of immigrants who had arrived in Canada within the previous decade were employed in jobs matching their education level, compared to 64 per cent of Canadian-born workers aged 25 to 34.

The over-education rate — the proportion of university graduates working in jobs for which they are over-qualified despite holding a bachelor’s degree or higher — was 26.7 per cent for immigrants, more than double the 10.9 per cent rate for Canadian-born workers in 2021.

Immigrants, particularly those with foreign credentials, are significantly more likely to experience these job-education mismatches (external link)  compared to Canadian-born workers.

Approximately two thirds of recent immigrants held a degree from a foreign institution. The over-education rate for these immigrants was 24 per cent higher than that of younger Canadian-born workers.

Under-employment experienced by many newcomers is largely driven by employers favouring Canadian experience — despite such preferences being illegal in Ontario — and relying on referral networks, which often disadvantage newcomers.

Hiring managers frequently undervalue international credentials, even when assessed by organizations like World Education Services (external link) . Many employers struggle to assess foreign work experience. Some also perceive  (PDF file) a lack of familiarity with Canadian workplace norms (external link)  as a hiring risk.

Ultimately, hiring managers tend to choose  (PDF file) the less risky option (external link) , as a bad hire can reflect poorly on them. An exceptional hire, on the other hand, doesn’t necessarily bring them equivalent rewards.

International experience is undervalued

International graduates with Canadian degrees generally achieve better labour market outcomes than those educated entirely overseas, experiencing higher earnings (external link)  and improved job matches.

However, many still face significant barriers, primarily due to  (PDF file) employers’ preference for specific Canadian experience and biases in assessing their skills.

Although many international students (277,400 in 2018 (external link) ) gain Canadian work experience during their studies and develop soft skills — often in low-paying, customer-facing roles such as accommodation and food services, retail, hospitality or tourism (external link)  — this experience is often dismissed as irrelevant to professional roles.

This creates a paradox: employers require Canadian experience for entry-level positions in their field, yet without prior experience, graduates struggle to get hired in the first place.

In addition, employers often  (PDF file) lack clarity about international graduates’ visa statuses, work permit durations and future stays in Canada (external link) . Constantly changing policies exacerbate this confusion, deterring employers from hiring.

A path forward

Canada’s long-term competitiveness is hindered not by immigration, but by systemic labour market discrimination and inefficiencies that prevent skilled newcomers from fully contributing to the economy.

Eliminating biases related to Canadian work experience and soft skills is key to ensuring newcomers can find fair work. The lack of recognition of foreign talent has a detrimental effect on the Canadian economy (external link)  by under-utilizing valuable human capital.

To build a more inclusive labour market, a credential recognition system should  (PDF file) support employers in assessing transferable skills and experience (external link)  to mitigate perceived hiring risks related to immigrants.

For international students, enhanced career services at educational institutions are critical. Strengthening  (PDF file) partnerships between universities, colleges and employers can expand internships, co-op placements and mentorship programs, providing students with relevant Canadian work experience before graduation.

Such collaboration is also key to implementing employer education initiatives that address misconceptions about hiring international graduates and highlight their contributions to the workforce.

Artificial Intelligence (AI) can also play a role in reducing hiring biases and improving job matching for new immigrants and international graduates.  (PDF file) Our recent report, which gathered insight from civil society, the private sector and academia, highlights the following AI-driven solutions:

• Tools like Toronto Metropolitan University’s AI resume builder, Mogul AI (external link) , and Knockri (external link)  can help match skills to roles, neutralize hiring bias and promote equity.
• Wage subsidies and AI tools can encourage equitable hiring, while AI-powered programs can help human resources recognize and reduce biases.
• Tools like the Toronto Region Immigrant Employment Council Mentoring Partnership (external link) , can connect newcomers with mentors, track their skills and match them to employer needs.

Harnessing AI-driven solutions, alongside policy reforms and stronger employer engagement, can help break down hiring barriers so Canada can fully benefit from the skills and expertise of its immigrant workforce.

 (external link)  (external link) Marshia Akbar (external link) , Anna Triandafyllidou (external link) , Canada Excellence Research Chair (CERC) in Migration and Integration Program, Toronto Metropolitan University (external link) ,

This article is republished from The Conversation (external link)  under a Creative Commons license. Read the original article (external link) .