CIBC CEO Victor Dodig calls for overhaul of immigration policy

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The leader of one of Canada’s most influential companies called for an overhaul of the country’s approach to immigration, arguing that professions too often undervalue skills acquired abroad, that housing has become so expensive that prices risk deterring talented foreigners, and that employers tend to pay lower wages.

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“Being welcoming in this case doesn’t just mean accepting newcomers,” Victor Dodig, chief executive of Canadian Imperial Bank of Commerce, said in a commentary published in the Financial Post on Oct. 24. “It means ensuring that when immigrants arrive, they can thrive and participate fully in society and the economy. On this score, Canada has work to do.”

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The chief executives of Canada’s biggest companies generally let their lobbyists and trade associations talk for them, at least in public, so Dodig’s decision to take such a public stand on immigration suggests the issue has become top of mind for the country’s corporate elite.

Dodig’s intervention comes with the federal government on the verge of submitting its next Immigration Levels Plan. The policy update will outline the number of immigrants the country will accept annually through various programs. As per the current plan, Canada aims to welcome 431,645 new permanent residents in 2022, 447,055 in 2023 and 451,000 in 2024. Dodig, the son of immigrants, urged the government to consider increasing those levels to counter the effects of an aging workforce.

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“We need to think bigger about immigration,” Dodig said, so that Canada has “the population density, human capital and capacity to be a leader in the new economy.”

Immigration plays a key role in Canada’s labour supply, accounting for 84 per cent of the growth in the total labour force during the 2010s, according to Statistics Canada. At the same time, data show the skills of newcomers are regularly underutilized. The number of university-educated immigrants working in jobs requiring a university degree fell to 38 per cent in 2016, from 46 per cent in 2001, compared to 60 per cent for Canadian-born workers, according to Statistics Canada.

We need to think bigger about immigration

Victor Dodig, CIBC CEO

Correcting that gap was on Dodig’s list of policy suggestions. He called on provinces to accelerate the accreditation of skilled workers who learned their trades and professions abroad. “Immigrants end up working in roles far below their skill level, unable to contribute as much as they want and as much as Canada needs,” he wrote, adding that this, and an elevated cost of living, risk hurting Canada’s brand as a nation of opportunity.

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Rebekah Young, vice-president and head of inclusion and resilience economics at Bank of Nova Scotia, said it was “premature to suggest that there is a material waning of demand to come to Canada just yet.” Still, she added that governments of all levels needed to address services that are under pressure, such as, quality education and access to health care, aspects that have traditionally been attractive features of Canadian life. 

“Decisions and actions taken today will determine if Canada remains a destination of choice down the road,” said Young.

Dodig’s call for a rethinking of immigration policy also comes amid a severe labour shortage.

Prime Minister Justin Trudeau’s government took a small step towards addressing the issue this month, saying it will temporarily remove a cap on work hours for international students, which will allow some 500,000 temporary residents to work for more than 20 hours per week starting in November.

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Experts say it will take much more to address the issue. Vacancies surged to a record of about one million this summer, a sign of things to come, as more and more Canadian boomers age out of the workforce.

Immigration can help, but only if Canada remains an attractive destination, as many other aging Western countries also will be seeking workers abroad. Dodig identified elevated housing prices and too many jobs that “simply do not pay enough for people to get ahead” as working against Canadian recruitment efforts. The CIBC chief recommended building more rental housing as a pathway to homeownership and using government land “strategically” to ease the housing supply crunch.

Dodig also said that CIBC had committed to raising its minimum wage to $25 per hour by 2025 from $20 per hour currently, and called on other employers to take similar steps. “We did this recognizing the importance of attracting talent, but also the importance of providing a wage that can contribute meaningfully to household finances,” he said.

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Scotiabank’s Young said that in the current environment, housing affordability was a problem, not just for newcomers but for Canadians across the country. However, newcomers face even higher costs, given recent trends in prices, whether it is to purchase a new home or obtain rented accommodations, she said.

“We may see newcomers increasingly voting with their feet for cities or regions where their dollar stretches further,” Young said. “This in turn should put more pressure on governments to undertake the necessary reforms to unlock more supply,” she added.

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Immigration, Refugees and Citizenship Canada (IRCC) admitted in a statement last month that the process of recognizing qualifications in regulated professions can “represent a significant barrier” for newcomers and delayed the benefits of immigration to Canada’s economy.

“Foreign credential recognition … is complex as provinces and territories are responsible for most regulated professions and trades, and in most cases, they further delegate that authority in legislation to regulatory bodies,” the government department said.

To tackle this issue, the IRCC said it was working with Employment and Social Development Canada, federal lead of the Foreign Credential Recognition Program, and with provinces and territories to “make collective advancements.”

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