For many immigrants to Canada, financial wisdom is as good as gold.
That’s why Credit Canada has made it a priority this year to focus on the financial literacy of newcomers to our country. In fact, we are pleased to announce we are working with Capital One and a number of other partners in the financial sector – as well as federal and provincial governments - to theme this fall’s Credit Education Week (November 15 – 19, 2010) around immigrants.
This fourth annual event promises to be both engaging and edifying, bringing knowledge and practical wisdom to many thousands of new Canadians.
How many thousands of newcomers are we talking about? Well, according to Citizenship and Immigration Canada’s 2009 Annual Report, Canada plans to welcome between 240,000 and 265,000 new permanent residents in 2010.
We’ve got work to do.
In terms of immigration, Canada is indeed a cultural mosaic. It is no accident that our country is at once known for having a comparatively high immigration rate and one of the most stable economies on the planet. Sound immigration policies, combined with a welcoming national spirit, have contributed to our stellar record as the best country in the world in which to live. Or, at least, that is what the United Nations Human Development Index has determined no less than six times in recent years.
Still, we face immigration problems, and they are of a decidedly economic nature.
For many newcomers to Canada, it’s not wealth acquisition in itself that is the big issue, but simple, down-to-earth financial literacy. It is understanding how to get the most out of less than ideal and often modest incomes in financially challenging times.
Contrary to certain circles of thought, immigrants are not arriving in Canada by the boatload to make off with high paying jobs that might otherwise go to long established citizens. The truth is, the lives of many newcomers to Canada are fraught with financial difficulty and worry as they struggle to employ themselves in the fields for which they were trained. The qualified physiologist from a major hospital in Bombay, for example, is today slinging burgers at a fast food restaurant in downtown Toronto.
Historically, immigrants have always played a vital role in helping to bolster Canada’s labour market. Up to a generation ago, newcomers could get ahead in this country at pretty good wage levels in fields in which they were skilled. But times have changed. A tough economy over the past two years has made that point loud and clear. Higher rates of unemployment and lower wages have combined to give newcomers less income than the Canadian average.
A look at census data from the turn of the century reveals that immigrant incomes were at 80 per cent of the national average after 10 years of residency. In previous decades, income levels for newcomers did rise to the national average after 10 years, but in recent years the situation has deteriorated. A 2003 study published by Statistics Canada noted that, in 1980 recent immigrants had low-income rates 1.4 times that of Canadian born, by 2000 they were 2.5 times higher, at 35.8 per cent. The study explained that the deterioration was widespread and affected most types of immigrants.
Meanwhile, a January 2007 study by Statistics Canada revealed that the deterioration continued into the next decade, with the low-income rate of recent immigrants reaching rates 3.5 times that of Canadian born in 2002 and 2003, before edging back to 3.2 times in 2004. The 2007 study noted the deterioration occurred even though Canada implemented changes in the early 1990s to encourage more highly educated immigrants, with 45 per cent of new immigrants having university degrees as of 2004.
The long and short of it is, for a generation now the economic status of newcomers to Canada relative to the native population has steadily declined.
So it’s clear that to live a decent life in this country, immigrants need to put into play all the financial smarts they can muster. And that’s on top of becoming accustomed to our culture. A number of newcomers to this country face significant challenges in relation to credit and debt. Our job at Credit Canada – in league with industry and government partners – is to address those hurdles.
Imagine immigrating to Canada from countries such as China, Pakistan, Columbia or Iran, which just so happen to be among the top 10 nations that supply Canada with newcomers. The financial mindset in many regions of these countries is unlike what we have here. Among many newcomers – and aside from technical matters - big questions of security and safety surround banking in general since many immigrants stem from places where autocratic, state-run banks and less than reliable financial institutions are the order of the day.
Especially in these economic times, newcomers to Canada need their comfort levels raised in relation to banking, credit and the personal investments they undertake. Just as importantly, they need to know that aside from Canada’s vast natural resources, this country boasts terrific resources in the form of expertise providing much needed information and programs in relation to financial literacy.
As the nation’s number one credit counselling and education service, Credit Canada – along with its private and public sector partners – has an important role to play in welcoming these and other recent newcomers to our nation, and assisting immigrants to acclimatize to our country’s financial realities.
Credit Education Week Canada 2010 will play a part in helping to get that job done.