Skilled But Underused: New Reports Reveal Immigrants’ Skills Are Wasted in Canada’s Job Market

The findings come from recent studies by Signal49 (previously the Conference Board of Canada) in partnership with Future Skills Centre. Together, they examine how well immigrants’ skills are used across the labour market, with a focus on healthcare, construction, and hospitality. The reports show that many newcomers are employed, but not in jobs that match their education or experience. Outcomes also vary widely depending on the city.

Key Takeaways 

• Immigrants are significantly more likely to be overqualified, especially those with higher education. 

• Many immigrants face underemployment through involuntary part-time and temporary work, limiting income stability and long-term progression. 

• Vaughan was the only municipality with an A grade in immigrant skill utilization, while Regina and Moncton received D grades. 

• Sectors like construction and hospitality offer faster job access, while regulated fields like healthcare require longer, more complex entry pathways. 

Overeducation is The Most Common Problem 

The reports find that the most widespread issue is not unemployment, but overeducation. Across the country, immigrants are 1.8 times more likely than Canadian-born workers to be employed in roles below their education level. 

This gap is even larger for highly educated immigrants. Those with education above a bachelor’s degree are 2.3 times more likely to be overeducated than their Canadian-born counterparts.  

Part-Time Work is Another Major Barrier 

The second major issue identified in the reports is skill wastage. Skill wastage includes three main forms: unemployment, temporary employment, and involuntary part-time work.  

Among these, involuntary part-time work is the most significant challenge. Across Canada, immigrants are 1.7 times more likely than Canadian-born workers to be unable to find full-time work despite wanting it. 

This problem is especially pronounced in construction, where 46 percent of immigrants were working part-time involuntarily in 2024. This was roughly double the rate seen in healthcare. 

Immigrants are also more likely to work in term and contract roles, which can limit job stability and make it harder to access long-term career opportunities.  

Construction Offers Jobs, But Lags in Skill Utilization 

Canada is facing major labour shortages in construction, with a projected shortfall of 85,500 workers by 2033, according to BuildForce Canada. Despite this, immigrant workers are more likely to be underutilized. 

In construction, immigrants are 2.6 times more likely than Canadian-born workers to be overeducated for their jobs. They are also 1.8 times more likely to work part-time involuntarily.  

To some degree, this is due to the way the sector operates. Construction work is often project-based, which leads to more temporary and contract jobs. Immigrants were 1.3 times more likely to be in term and contract roles, which suggests that it is harder for them to secure stable, long-term employment.  

Trade certification is another barrier. Processes such as Red Seal certification take time and often require workers to start again at entry-level positions, even with years of experience abroad. However, the government recently announced a $6 billion investment for training and hiring skilled tradespersons, with the goal of expanding training capacity and accelerating time-to-certification. 

Employers also frequently expect Canadian experience, particularly knowledge of local construction methods, cold weather construction techniques, and safety practices. 

Licensing and Bridging Programs Barriers in Healthcare  

In healthcare, the issue is less about job availability and more about access. Immigrants make up 30 per cent of full-time workers in the healthcare sector, showing strong demand for their labour. Yet many internationally trained professionals are unable to enter their field at the right level.  

The level of skill wastage is significant. In 2021, only 67 per cent of immigrant physicians worked in the healthcare sector, compared to 95 per cent of their Canadian-born counterparts. Only 58 per cent of immigrant healthcare professionals were employed in any health-related occupation. 

Immigrants in healthcare are also more likely to face underutilization once employed. They are 2.2 times more likely to be overeducated than Canadian-born workers and 1.6 times more likely to experience involuntary part-time work.  

Licensing is the main barrier, partly due to fragmented provincial regulatory systems with distinct requirements. Professionals must go through assessments, exams, and supervised training before they can practise. These processes are expensive and can take years. 

There is also limited access to bridging programs for internationally educated health care workers. As a result, many skilled immigrants work in lower-level roles or outside the sector entirely, even as shortages continue. 

Read our article: Why Aren’t More Newcomers Filling Healthcare Roles? 

Hospitality Provides Quick Entry but Limited Alignment 

Hospitality is one of the easiest sectors for newcomers to enter, and immigrants make up 38 per cent of the full-time workforce. 

However, immigrants in hospitality are 1.4 times more likely to be overeducated than Canadian-born workers, as many roles do not require advanced education. 

According to Statistics Canada, 28 percent of hospitality businesses expected labour shortages in late 2024, the highest share across all sectors. These shortages are concentrated in lower-skilled roles such as cooks, kitchen helpers, housekeeping staff, and front desk clerks. 

International students have been the main source of foreign labour in hospitality since 2015. However, caps on study permits introduced in 2024 started reducing this labour supply. To make matters worse, lower international tuition revenue forced post-secondary institutions to scale back on hospitality programs, which will further reduce the domestic skill pool. 

Immigration pathways also create challenges for retention. Many hospitality jobs fall under TEER 4 and 5 categories, which makes it harder for workers in these roles to qualify for permanent residency, even when employers need them long term. 

These factors mean that hospitality plays an important role in helping newcomers enter the workforce, but it does not always provide stable or long-term career pathways that match their skills. 

Location Plays an Important Role

When it comes to immigrant skill utilization, most municipalities across Canada are performing only at a middle level and progress over time has been limited. From 2022 to 2024, mostmunicipalities saw no change in immigrant skill utilization, and almost equal numbers saw improvement and declines. 

In 2024, 36 percent of municipalities received a B grade, and 54 percent received a C grade on the immigrant skill utilization scorecard. Only one municipality, Vaughan, received an A, while Regina and Moncton received D grades. Notably, in 2022 and 2023, no municipalities received D grades. 

What This Means for Newcomers 

The reports show that as a newcomer in Canada, finding a job that matches your qualifications can take time and will depend on several factors, including where you live and which sector you enter. This makes it important to plan your career path in advance, especially if your profession is regulated in Canada.  

One key takeaway is that your location can influence how quickly you find work that matches your experience and how much you earn over time. 

If you’re a newcomer struggling to find your first job in Canada, some flexibility can help. According to Statistics Canada, 64.8% of newcomers find a job within six months of arrival, but many start below their skill level. Being open to different cities or a lower job level can help you get that first foothold faster. 

Sectors like hospitality and construction may offer faster access to jobs, but these roles are less likely to match your education or provide long-term stability. Being open to contract or part-time roles can help you gain initial experience, even if they are not your ideal job. 

Sectors like healthcare offer better alignment with qualifications. However, entering these fields requires more time, licensing, and investment. 

The reports also show that higher education does not always lead to better job matching. In many cases, more highly educated immigrants are more likely to be overqualified, which makes early planning and realistic expectations especially important.