The Underappreciated Immigration Success Story

From: Henry Lotin
To: Immigration Observers
Date: October 10, 2025
Re: The Underappreciated Immigration Success Story

Canada’s renewed immigration debate is ignoring a remarkable success story: The rapid improvement in the economic performance of new permanent residents, especially those with both pre-landing Canadian education and work experience.

To ensure these gains continue, Canada must sustain its focus on outcomes-based selection, and guard against recent policy shifts that risk reversing this progress, as the country tries to correct course from the surge in non-permanent residents –  international students and temporary foreign workers – and the strain they place on housing, public services, and infrastructure.

Between 2012 and 2021, evidence-based reforms that emphasized economic selection and rewarded Canadian experience, including the introduction of Express Entry, have resulted in the admission of immigrants who integrate faster, earn more, and contribute strongly to the economy. Statistics Canada data on employment wages, salary and commission earnings of the 2.16 million tax filers who obtained permanent status between 2012 and 2021 tells a striking story of progress.

The share of new permanent residents with prior Canadian experience, either through work or study, nearly doubled, rising from 28.1 percent in 2012 to 54.5 percent in 2020, before soaring to 75.1 percent (in the wake of COVID backlog) in 2021. Within the economic class, the proportion with Canadian experience increased from 44 percent to 71 percent by 2020.

This shift has paid off.

Those who had both a work and a study permit before obtaining permanent status earned, on average, almost $29,000 more by 2022 than those without Canadian experience. The 2018 cohort of economic class immigrants earned $2,100 more by 2022 than the 2012 cohort, even though the latter had been in the country longer. Spouses and dependents also narrowed their earnings gap with principal applicants, further lifting household incomes.

The rising share of permanent residents that reside or resided in Canada reflects the multi-step immigration system developed and expanded in recent years.

Crucially, Canadian resident permanent residents (most of the tax filers with Canadian experience) do not add to the strain on housing, health and social services, and infrastructure as do new arrivals.

How do these earning results compare to the rest of the population?

A recent Statistics Canada study found that those with completed post-secondary education in Canada prior to gaining permanents residency earned 1.8 times as much as their  Canadian-born counterparts, and those with a work permit were 1.5 times more likely, to be employed full time in class A occupations  – professional jobs that usually require a university degree.

Statistics Canada data also shows that many categories of 2018 permanent residents had earnings exceeding the Canadian annualized weekly average in 2022 ($60,597). This includes economic class entrants obtaining permanent residency as recently as 2020 ($62,300).

The 2018 permanent resident cohort of the Canadian Experience Class (CEC) subset of the economic class had an average income in 2022 ($83,000), greater than the national average for “management of companies and enterprises,” “finance and insurance,” “information and cultural industries,” “construction, and “manufacturing” among others.

Meanwhile, the wage gap between permanent residents and Canadian-born workers narrowed substantially from -22.5 percent (2006-2014) to -13.1 percent in (2023-24), according to the Bank of Canada.

Immigration department data suggest this success may continue, with more than half of all permanent residency approvals in 2024 – and 54 percent in early 2025 – going to those already living in Canada. Whether this progress holds, however, will depend on future policy design to address recent shifts in both temporary and permanent streams, including the management and economic performance of non permanent residents, the weighting of human capital factors, and the maintenance of standards in economic selection. Will lower Comprehensive Ranking System (CRS) scores for applicants in “boutique” programs for less skilled occupations erode these outcomes? Have other changes in composition, criteria and categorization of economic immigration also negatively affected outcomes? Future tax data releases will tell the tale.

Immigration officials need to heed the call of the C.D. Howe Institute Immigration Targets Council that all economic applicants meet the CRS threshold, and entry qualifications place greater weight on predictors of long-term success; including verified Canadian earnings for those with prior Canadian experience.

Henry Lotin is an Economist and Principal of Integrative Trade and Economics and retired Senior Policy Advisor at Global Affairs Canada and Industry Canada, where he served as acting Ontario Regional Economist.

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