Alicia Planincic: We know the one thing Canada could be doing to select better economic immigrants. So why aren’t we doing it? 

Some useful ideas but all ranking systems are imperfect predictors of success. And wages only work for two-step immigration as numbers from other countries are not easy to compare. And there are risks in changing criteria and priorities too quickly without sound evidence and data:

…Candidates receive CRS points for things like language abilities, number of years of schooling, and whether they have a sibling in Canada. But factors like what their degree was in, or where they got it from, are not reflected. Meanwhile, the biggest limitation of the points system is that it ignores labour market information. It therefore tells us little about how valuable someone’s skills are to the Canadian economy.

To go back to hockey analogies, this way of assigning CRS points is like ranking players based on the number of games they have played in the NHL, whether they have a brother in the league, and whether they speak French—while neglecting things like how many points they tend to get every year. The evaluation would not be meaningless, but it’s easy to see how some of the best players wouldn’t be ranked at the top.

To improve the CRS, Canada needs to better capture the value of the skills a candidate brings. As it turns out, the best-known way to do so is pretty simple: have the points system reflect their current earnings.

Why is that? Wages reflect both the needs of the economy (demand) and the relative availability of labour (supply). Generally speaking, if demand for a certain occupation or skillset is strong, or few are willing or able to do this work, wages will be high.

There are other ways to improve the CRS, too.

One is to remove the variables that don’t influence an individual’s economic potential. These factors not only muddy the ranking of candidates but also can unfairly bias certain people or groups. For instance, individuals can earn points for having a sibling in Canada even though the math shows this has no direct impact on economic success. Family in Canada may be a legitimate reason to consider someone for immigration, but is not an economic one, and it is being used in the economic stream. At the same time, favouring people who already have family in Canada puts individuals from smaller countries, or those with less immigration to Canada, at a disadvantage.

Another way to improve the CRS is to regularly refine it as new and better information—including the type and quality of skill (e.g., field of study, program of education) most highly valued—becomes available and can be incorporated. The CRS cannot reflect the economy of 50 years ago. It has to be the latest and greatest of today.

The recruitment of skilled talent globally is big, exciting, and holds much potential. But Canada should not lose sight of the power of the points system, nor the talent that is in plain sight. Before marketing the country to individuals around the world, Canada should do more to select the best among those who have already put their name in the hat—to support greater prosperity for all.

Alicia Planincic is the Economist & Manager of Policy 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.

Source: Alicia Planincic: We know the one thing Canada could be doing to select better economic immigrants. So why aren’t we doing it?