Immigrants and Small Business

By Gilda Spitz

You may think that your best chance to find a job is to target a large company. After all, the big companies are the ones with all the jobs, right? Not necessarily.

According to the Canadian Federation of Independent Business (CFIB), there were 97,000 long-term job vacancies in small and medium-sized businesses in Ontario in 2007.

CFIB says 97 percent of all businesses in Ontario are considered small – 50 employers or fewer. A total of 1.5 million (29 percent) employed people in Ontario work for small firms.

In the last two years, CFIB published two major reports on the impact that immigrants can have on the economy of Canada through small and medium-sized businesses. Both reports make it clear that you can find many job opportunities by focusing on small and medium-sized business, rather than large firms.

What types of shortages are there?

According to Garth Whyte, Executive Vice President of the CFIB, the shortage of qualified workers for owners of small businesses in Canada is a "tidal wave" and is growing larger every year.

Many small business owners in Canada are concerned about the current shortage of qualified labour, and expect the situation to get worse. Many shortages are in occupations that usually require college or apprenticeship training; for example, carpenters, plumbers, mechanics, and electricians.

CFIB suggests that one way to tackle the problem is immigration. In 2005, Canada accepted 262,236 immigrants as permanent residents. Almost two thirds were in professional occupations requiring at least a university degree. Skilled and technical occupations accounted for only 22 percent of immigrants.

"This is a mismatch of the needs of small business owners," says Whyte, because the largest need is for people in skilled trades.

How serious are the shortages?

The Help Wanted: Labour Shortage Troubles Deepen for Small and Medium-Sized Enterprises in 2007 report contains some fascinating statistics that provide a snapshot of the labour shortage in 2007, and the trends from previous years.

The key to these statistics is their examination of long-term vacancies – job openings that remain unfilled for four months or more because the employers were unable to find suitable applicants.

  • Percentage of long-term job vacancies: In 2007, 4.4 percent of positions remained open for four months or more, as business owners were unable to find employees. In 2006 the same figure was 3.6 percent, indicating a significant increase in the trend.
  • Percentage of businesses with long-term vacancies: In 2007, 32.5 percent of small and medium-sized business owners had at least one long-term vacancy. The average for the previous three years was approximately 25 percent.
  • Size of businesses: Although all small businesses are experiencing employee shortages, the smallest businesses are the ones that are hit the hardest. For example, in 2007, businesses with fewer than five employees had a vacancy rate of 9.6 percent. CFIB explains, "For small businesses, each vacancy is critical since it represents a sizeable share of its total staff."
  • Job sectors: Shortages were felt in all segments of the economy in 2007, but particularly in the construction sector, at 6.0 percent. Hospitality and personal services are a close second with 5.9 percent. In all sectors, the vacancies were higher in 2007 than in previous years.
  • Numbers of long-term vacancies: In small and medium-sized businesses in Canada, the number of long-term vacancies in 2007 was estimated at 309,000, a significant jump from the 2006 figure of 251,000. Of the 2007 total, 97,000 were in Ontario.

What do the numbers mean?

One of the authors of Help Wanted: Labour Shortage Troubles Deepen for Small and Medium- Sized Enterprises in 2007, Plamen Petkov, a Policy Analyst for CFIB, explains that these statistics prove that there has been a long-term vacancy increase. He says that it is a "systemic problem" that used to be applicable only in Western Canada, but now affects all regions of Canada.

Petkov explains the effect of long-term employment shortages on employers. "When the employers can’t find skilled labour, they can’t bring their products and services to market. Some businesses even have to put their growth plans on hold, which affects the individual communities, and the economy as a whole."

What types of immigrants can fill shortages?

So…now that we know what’s happening, what can we do?

Petkov says, "It’s a whole puzzle of solutions, and we have to collect the pieces." Some of the "pieces" are measures to make it easier for qualified immigrants to come to and stay in Canada, and easier for employers to hire immigrants to fill those positions.

The workers that Canada needs to fill labour shortages can come from several different classes of temporary workers and immigrants. In addition to the traditional immigrant classes, immigrants can now come through Ontario’s new Provincial Nominee Program (these exist in most other provinces as well). People who immigrate to Canada under the Provincial Nominee Program have the skills, education, and work experience needed to make an immediate economic contribution to the province or territory that nominates them. To apply under the Provincial Nominee Program, applicants must be nominated by a Canadian province or territory.

In addition, there is a new immigration class called the Canadian Experience Class, which was proposed by the Canadian government in 2007. This proposal is currently still in the review process, and may come into effect later in 2008. If it does proceed, for the first time, certain highly skilled temporary workers and international students, already living in Canada, will be able to remain in Canada while they apply for permanent residence, without having to file their applications abroad.

In what ways can employers help?

Moving to a new country often means leaving family, friends, and a familiar culture behind, and can also be very expensive.

Research has shown that the most serious problem immigrants face when trying to find a job is lack of experience in the Canadian workplace. This is a problem for many newcomers, even two years after arriving in Canada. CFIB estimates that a year of foreign work-experience is seen to be worth only about one-third the value of Canadian experience. Other problems include:

  • language,
  • evaluating foreign credentials,
  • relationships with other workers due to cultural or religious differences.

Many employers try to make things easier for new immigrants because they know that helping newcomers and their families integrate into Canadian society helps both the employer and the employee. According to Whyte, some employers provide assistance such as social activities, language classes, and help in finding a place to live. Many also employ more than one person from the same home country, thereby providing cultural support for the newcomers at their place of work.

What about self-employment?

In addition to research about the immigrants who are looking for jobs, CFIB is also looking at those who are self-employed. Statistics show that many middleaged people who own small businesses plan to retire within the next ten years, affecting as many as two million jobs, many of which are currently held by immigrants.

This could be a wonderful chance for business people from around the world to create opportunities for new immigrants and to help the Canadian economy in general.

Looking to the future

The Canadian government is well aware of the value of immigration to the future economic growth of Canada. In a 2007 speech, Diane Finley, Minister of Citizenship and Immigration, announced that Canada expects to welcome between 240,000 and 265,000 newcomers in 2008.

"Our government believes that immigration plays an important role in building our communities and growing our economy," said Minister Finley. "[Immigration] will help ensure that Canada continues to grow and benefit from all that newcomers and their families bring to our country."

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