The Impact of Immigrants on Ontario’s Labour Growth

The Financial Accountability Office of Ontario (FAO) report underscores that the growth in Ontario’s labour force is increasingly attributed to international immigrants. Drawing from Statistics Canada’s 2021 data, the analysis specifically focuses on immigrants holding permanent residence status in Canada. In 2022, Ontario witnessed a substantial influx of immigrants, totaling 227,424 individuals, significantly influencing the province’s economic expansion. Despite a decline in immigration figures in 2020 and 2021 amid the COVID-19 pandemic, the report notes that the heightened border restrictions and elevated immigration targets in 2022 contributed to the notable increase in newcomers. Ontario’s proportion of immigrants to Canada has risen to 42.5% this year.


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Key Highlights from FAO’s Report

The “Labour Market Outcomes of Immigrants in Ontario and its Major Cities” report from the Financial Accountability Office of Ontario provides an in-depth analysis of the trends and outcomes for international immigrants in Ontario’s labor market. Key highlights from the report include:

Labour Force Growth Driven by Immigration

Ontario saw a record 227,424 immigrants in 2022, contributing significantly to labor force growth. Since the mid-2010s, immigrants have accounted for 63% of the increase in Ontario’s labor force.

Demographic and Educational Composition

There has been an increase in the share of immigrants within the core working age group (25-54 years), with 62.3% of immigrants who arrived in 2016-2022 falling into this category. This group has a higher proportion of individuals with postsecondary education credentials (80%) and Canadian work and/or study experience (38.5%) compared to long-established immigrants.

Labor Market Participation and Unemployment

The labor participation rate gap between recent immigrants and non-immigrants has narrowed, with only a 3.5 percentage point difference in 2022. However, challenges remain, such as a higher proportion of immigrants with university degrees being employed in jobs requiring only high school education.

The wage gap between new immigrants and the total population has decreased over time, reflecting policy changes. Core working age immigrants with a bachelor’s degree or higher earned the highest median wage among all immigrants in 2020.

Settlement and Wages in Major Cities

The majority of Ontario’s immigrants settle in Toronto, which attracted 67% of recent immigrants in 2021. However, immigrants in all major cities in Ontario earned lower median wages than non-immigrants, with the gap varying across different cities.

Notwithstanding fluctuations, immigrants consistently constitute a growing segment of the province’s labor force expansion, accounting for 39% from 2007 to 2014 and surging to 63% from 2015 to 2022. The report highlights significant progress in the integration of immigrants into Ontario’s labor market, marked by increased participation, narrowing wage gaps, and a shift towards professional occupations. Despite these advances, challenges persist, including higher unemployment rates and overqualification among recent immigrants.