Canadian companies must invest in international students

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International students are among the most overlooked sources of Canadian economic prosperity.

In 2018, the penultimate of the pre-pandemic years, international students enrolled in Canadian colleges and universities contributed $22 billion to the economy. And their education has supported about 218,000 jobs, according to a recent RBC Economics report.

Today, immigrants in general and international students in particular are heavily relied upon to sustain Canada’s economic success at a time when skilled labor shortages are expected to last into the end of the decade.

But progress for international students is hampered by a maze of elaborate requirements for obtaining residency status, certification by professional credentialing bodies and internships to gain crucial early work experience.

International students are exhausted by this long process, which can take years. And potential employers are not equipped to manage this range on their behalf.

There is also a mismatch between the skills offered by Canadian schools and those sought by employers. This results from a lack of sufficient coordination between governments, education systems and employers.

And employers, both public and private, have only begun to offer international students short-term internships and long-term jobs that would entice them to stay in Canada.

Ultimately, we risk losing the world’s best and brightest students to other countries in today’s fierce global competition for talent.

This escalating competition is driven by labor shortages and shrinking working-age populations in major Western economies as well as China.

Britain, the United States, Australia and China, which Canada relies on as one of our top three source countries for immigrants, have all stepped up incentives to attract and retain international students.

The pool of international students is surprisingly small. There are less than five million international students in the world today, and this is expected to grow to only around seven million by 2030.

We even risk losing international students who have chosen Canada but who must fight to obtain permanent residence.

Many are also afflicted by a long-running phenomenon recently dubbed “brain waste” that sees college-educated workers from abroad relegated to unfulfilling, low-paying jobs below their level of ability.

Statistics Canada data from 2016, the most recent available, revealed that about 60% of Canadian immigrants worked in jobs that did not require a university degree. This compares to a rate of about 40% for their Canadian-born peers.

By Scotiabank calculation in a recent report on needed immigration reform, this reality explains a “wage penalty” for newly arrived college-educated immigrants that equates to an average salary $21,000 less than their Canadian-born counterparts.

“Difficulty navigating a complex system adds to stress for (international) students and could deter many students from pursuing their Canadian dream,” say RBC Report authors Ben Richardson and Yadullah Hussain.

“The perception of a complex and bureaucratic immigration system can influence their decision to stay in Canada.

“These are costly duds for a Canada that needs a steady pipeline of skilled citizens to ensure its continued prosperity.”

The good news is that Canada ranks third in attracting international students, behind only the United States and Australia, and having overtaken the United Kingdom.

“Canada is a powerhouse of international education,” say the RBC authors. This claim is based on the country’s immigrant-friendly reputation and top-notch schools.

And Canadian newcomers are rich in the skills required by the 21st century knowledge economy.

International students are twice as likely as their domestic peers to study engineering and 2.5 times more likely to enroll in math and computer science.

But due to the mismatch between skills and the labor market, international students are underrepresented in healthcare; many vocations of education, trades and services; and in “green jobs” to fight the climate crisis. RBC estimates that Canada will need about 400,000 green jobs by 2050.

Today’s most urgent calls for reform of the immigration system may come even more from corporations than from traditional immigrant advocacy groups.

In addition to the big five banks, calls for action have come from Conference Board of Canada and the Business Council of Canadathe association representing the largest companies in the country.

Among the G-7 economies, Canada has long lagged in productivity growth. Companies are particularly alert to the potential of highly skilled immigrants to help reverse the burden on Canadians’ standard of living.

Business can also relate to the risk-reward decision that international students must make in choosing Canada for their studies and then choosing to stay there. The company makes the same calculation in all its decision-making.

And Canadian companies, with a cash reserve which RBC estimates at around one-third of Canadian GDP – a legacy of pandemic corporate cash hoarding – can make the capital investments necessary to achieve the full utilization of highly skilled, domestic and international workers.

“There will be increasing competition for highly educated and mobile young talent as workplaces age globally,” Scotiabank warns in its recent call for immigration reform.

“They will go where their talent is best recognized and appropriately rewarded.”

Let that destination be Canada.

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