Canada pays highly educated immigrants less money than the U.S., study finds
Canada is “relatively successful” at attracting highly educated immigrants, but their counterparts in the United States earn more and have access to better opportunities, a new study says.
The neighbouring countries that have been largely at odds since the Trump administration took over are not only competing when it comes to industries , like the steel and auto sectors. They are also competing for skilled and educated people, especially those in the science, technology, engineering and math (STEM) fields.
Researchers noted that now is the time for Canada to push for the “best and the brightest” to come to the country, as the U.S. adopts “a far less welcoming immigration policy .”
The study from the Fraser Institute published on Thursday is shedding light on how certain Canadian immigrants are not reaping as many benefits as their U.S. counterparts who “perform better in terms of both employment status and earnings.” Those two factors are compared to native-born Canadians and Americans, respectively, as benchmarks.
In Canada, highly educated immigrants earned 16 per cent less than native Canadians. In the U.S., immigrants had a higher employment rate (1.2 per cent) and higher compensation (8 per cent) than Americans born in the country.
In 2020, visible minority immigrants in Canada with a bachelor’s degree or higher earned a median of $57,200, whereas native Canadians with a bachelor’s degree earned $68,300 on average.
“The differences were even greater when focusing on cohorts with advanced degrees,” said researchers. “Specifically, the median income of visible minority immigrants with a master’s degree was $65,500. For those with an earned doctorate, it was $84,000.” Canadians born in the country with a master’s earned an average of $84,400, while those with a doctorate earned $100,000.
The wage gap was likely due to “difficulties around the recognition of foreign credentials (and perhaps non-Canadian work experience) for newcomers seeking opportunities in the Canadian labour market,” researchers noted.
In the United States, data from 2022 showed that highly educated American immigrants earned US$122,000, while those born in the U.S. in with the same qualifications earned US$113,000. Researchers said that immigrants out-earning their American counterparts could be due to their “superior performance.”
Canada has a higher percentage of immigrants with at least a bachelor’s degree as part of its workforce, compared to the U.S. And Canadian immigrants are “substantially more educated than recent immigrants to the U.S.” compared to each respective native population, researchers said. More immigrant STEM workers in Canada account for a larger share of the workforce than in the U.S.
Yet despite all of those factors, the U.S. “offers greater economic opportunities and rewards than does Canada, which attracts immigrants at the higher end of the global skill distribution,” according to the study.
For Canada to more successfully compete for global talent, there must be “policies to improve immigrant selection and to create a more dynamic and productive Canadian economy,” said Steve Globerman. He’s a senior fellow at the Fraser Institute who co-authored the study.
Educated immigrants contribute to the Canadian economy through including innovation and entrepreneurship. One way to attract them, the study concluded, is to fast-track applications for immigrants and relying on input from employers to select people expected to earn above average wages once in Canada.
“We also believe the federal government should not grant visas to international students intending to enroll in private ‘degree mills’ that generally offer low-quality academic training,” the study said. In 2025, the federal government said it plans to issue a total of 437,000 study permits, a 10 per cent decrease from the 2024 cap. (Of that total number, 73,282 spots will be issued to graduate degree students.)
The study highlighted that Canada can benefit from the Trump administration’s “antagonistic policy stance towards immigration, particularly as it relates to American universities.”
Researchers used data from Statistics Canada, the American Immigration Council, the Migration Policy Institute, as well as other academic sources and journals.
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