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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


 
Canada's Immigration Minister John McCallum speaks during a news conference in Ottawa, Canada November 24, 2015. (Chris Wattie/Reuters)

Canada’s Immigration Minister John McCallum speaks during a news conference in Ottawa on Nov. 24, 2015. (Chris Wattie/Reuters)

This post was first published by Canadian Business.

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-fuelled escalation of the Canadian dollar’s value, as I describe in Reforging Ontario.

Related from Mike Moffatt: What’s wrong with Canada’s immigration system in two Tweets

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’sPost-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.


 
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