Canadians have long supported immigration because they believed it was good for the economy.
But now support is waning. That’s mostly because of housing affordability; Canada is failing to build new homes at the pace needed to support population growth.
There’s another factor that could erode support even further: fewer immigrants are being selected for the value of their economic contribution to Canada. Over time, this will lead to worse outcomes for newcomers and weaker growth for the Canadian economy. And it will fray the connection in Canadians’ minds between immigration and a strong economy.
To regain lost support, and ensure its resilience for decades to come, it’s time to refocus immigration policy on selecting those with the best chance of contributing to a stronger economy.
As we wrote in the first piece in this series, this starts with improving Canada’s points-based system for selecting economic immigrants—what is called the Comprehensive Ranking System or CRS. But a second, and possibly bigger, issue is that Canada is moving away from the points system altogether, selecting immigrants based on factors other than their scores. That’s the focus of this commentary.
The change has been considerable. In 2019, around 46 percent of economic immigrants were selected through the federal skilled workers program specifically because they had the highest number of points. Our estimates suggest that by 2026, only 8 percent of all immigrants will be selected on the basis of having the highest points score.
This is cause for concern. The brilliance of the CRS is that it objectively ranks candidates based on who is most likely to bring the greatest value to the Canadian economy. Sure the CRS could be improved, but moving away from it altogether will not only dilute the prosperity gained from immigration but also open the door to political influence of the selection process.
What’s caused this shift?
One factor is the addition and growth of other streams of immigration. These streams are within the economic class but reflect priorities beyond pure economic prosperity. These include population growth, French proficiency, industry needs, or granting permanent residency to temporary residents.
Just in the last five years, several new streams have been added and more are coming. In 2019, the Rural and Northern Immigration Pilot (now a permanent program) was introduced and in 2022 it was expanded to promote immigration to rural areas. In 2020, an Agri-Food Pilot was launched to prioritize agricultural workers. More recently, a new stream was added to support immigration to Atlantic provinces while another is set to pilot this fall to encourage immigration to Francophone communities.
Meanwhile, other streams and policies have been introduced to prioritize those already in Canada as temporary foreign workers or students. While this might seem like a reasonable approach, selecting individuals for economic immigration based on temporary status creates a workaround to the points system, making the CRS almost irrelevant.
Immigration Minister Marc Miller speaks at a citizenship ceremony for new Canadian citizens in Surrey, B.C., May 13, 2024. Ethan Cairns/The Canadian Press.
Also, though it is not new, the biggest factor driving immigration away from the primary skilled worker program has been growth in the Provincial Nominee Program—a program designed to give provinces more say in immigration. Though some candidates are still assessed via the points system, they get so many bonus points from a provincial nomination they are all but certain to be selected for permanent residency.
At the same time, an even bigger change has come from within the skilled worker program itself. Introduced in 2023, a new method called category-based selection chooses the highest-ranking individuals within a subset of the applicant pool based on a “designated category.” Most categories are based on a particular occupation group (e.g., health, trades, and transport occupations) but could be defined by any criteria and can change over time based on labour market information or stakeholder feedback.
Basically, how it works is this: suppose IRCC wanted to select more health-care workers to come to Canada. Under category-based selection, it would cross off the list everyone who lacked the appropriate qualifications and/or experience, and then choose the best candidates from whoever’s left.
The problem is that with such a reduced applicant pool, many individuals chosen under category-based selection will have far lower CRS scores than other general applicants. This means those overlooked individuals are expected to be more successful than the ones chosen. Further, because this process is expected to select 78.5 percent of economic immigrants from the primary skilled worker program, highly skilled individuals who do not fit within one of these defined groups will be left greatly disadvantaged and overlooked.
To be fair, category-based selection is an attempt to correct for a key shortcoming within the existing points system: that it overlooks the value of a given skill set.
But there are better ways to do this: by directly incorporating labour market information into the CRS. Doing so would improve the effectiveness of the points system in predicting economic potential while ensuring individuals within a given occupational group are not unduly prioritized over others with valuable skills.
Overall, this shift away from the points system brings greater subjectivity and risk of politicization to a previously objective and merit-based process. New selection streams or criteria invite the question: why this category/program and not another?
It’s easy to imagine how various groups might want to make the case for why the specific skillset or individual they need should be top of the list. The challenge is that what’s in the best interest of an individual group may not be what’s in the best interest of Canadians at large. This is not what immigration to Canada is or should be about.
Economic immigration should be about economic growth. By veering away from the points system, Canada is limiting immigration’s economic potential for the country. Regaining lost support for immigration will therefore not only require that the country build more homes but that it prioritizes for economic immigration those who will build the greatest prosperity for Canada.
Alicia Planincic is the Director of Policy & Economics at the Business Council of Alberta. She regularly provides insight and analysis on the Canadian economy, public finances, labour markets, equity and social mobility, and public policy.
