Thank you so much.
I know that this is supposed to be about homelessness, but in this opportunity for us we're going to be speaking on education, training, and employment strategies to reduce poverty in Canada. I'd like to begin with a story of poverty, survival, resilience, and transformation.
Abdul Ali came to Canada full of dreams for a brighter and safer future for him and his family. He believed that his master's degree in accounting, flawless English, and years of experience in senior management positions at a multinational oil company would serve him well. After sending out hundreds of job applications without success and using his savings to settle his family, Abdul did what so many immigrants to Canada are forced to do. He took a minimum-wage survival job as a clerk at a convenience store to put food on the table for his family of four.
Abdul's story is a common one. Despite the fact that Canada actively recruits skilled immigrants for the contributions that they and their families can make to our economy and our future, we have not created the conditions that allow them to thrive. Despite their higher levels of education, on average, they face higher unemployment rates and lower wages than Canadian-born workers and are disproportionately represented in Canadian poverty statistics.
I want to give you just a few of those statistics from the 2006 census data. First, 22% of racialized and immigrant persons live in poverty compared with 9% of non-racialized persons. In the large metropolitan areas, the statistics are much worse. In Vancouver, 58% of all those living in poverty in Vancouver come from racialized and immigrant groups. In Toronto, they are 62% of those living in poverty. Here's one more statistic—41% of chronically poor immigrants have university degrees.
You've met them. They are the taxi drivers who drive you to airports, the clerks in grocery stores, and the cleaners and security guards in office towers across the country.
This is preventable poverty, devastating to the families who experience it and who arrive on our shores expecting so much more, and a huge loss to Canada's economy and to all of us as Canadians. It is estimated that if immigrants' observable skills were rewarded in a manner similar to that for Canadian-born workers, the increase in incomes would amount to $30.7 billion, or about 2.1% of GDP. It is imperative that the Government of Canada provide leadership in redressing this situation.
Why does it happen? There are several complex and mostly systemic reasons.
The number one reason is the lack of recognition and acceptance of immigrants' international credentials. Four years after landing in Canada, only 28% of newcomers with international credentials were able to get them recognized. Second, the demands of many employers for Canadian work experience as a prerequisite for employment create a hurdle that is almost impossible to overcome. Third, immigrants are excluded from the social and informational networks that often lead to employment. Fourth, immigrants lack access to the financial resources to pursue the licensing, training, and bridging programs that would help them to overcome these systemic barriers.
Now for some good stuff. What is IAF and how do we fit into this picture?
The Immigrant Access Fund is one of those social innovations made possible when governments, communities, and the private sector come together to make a difference. We are a unique, character-based, microloan program that lends up to $10,000 to immigrants across Canada to enable them to return to work in the occupations they trained for and worked in prior to their arrival. Immigrants can use our funds for whatever will help them on this challenging get-out-of-poverty journey. Since our start in 2005, we have lent over $17 million to 2,700 newcomers.
I said we were unique. What makes us unique? The payback rate on our loans is over 97%, and the majority of the almost $10 million in IAF's loan capital pool comes from the private sector through an innovative social finance model that leverages the assets of foundations and high net-worth individuals.
I have a statistic that I'm sure you'd really like. It's that the return on public sector funds invested in the Immigrant Access Fund is 900%.
It's about poverty. What difference do we make? At the time that they apply to us, 42% of IAF applicants are unemployed and the remaining 58% are in survival jobs. After completing their licensing plan, 81% report being employed in their field. The really staggering statistic is that IAF borrowers go from earning an average of $16,000 per year, when they apply to us, to earning $50,000 per year in the first year upon completion of their learning plan. This results in an increase in taxes paid to federal and provincial coffers of $6,500 in the first year alone.
What are our recommendations to you?
First, continue to address the systemic barriers in licensing and credential recognition processes. Good progress has been made through the pan-Canadian framework for the assessment and recognition of foreign qualifications, developed under the Forum of Labour Market Ministers. The framework commits governments, licensing bodies, and other stakeholders to work together to increase the transparency, fairness, timeliness, and consistency of foreign qualification assessment and recognition processes. Given the impact that recognizing international credentials has on reducing poverty and preventing people from falling into poverty, greater priority needs to be given to this area and the measurements of success and accountability mechanisms need to be built into the framework.
Second, recognize the role that mentoring and bridging programs can play in reducing poverty. These programs support immigrants to overcome the barrier of no Canadian experience and help to connect them to social and informational networks that lead to employment in their field.
Third, ensure that the policies and practices of regulatory bodies, governments, and other stakeholders are aligned to support the various stages of the labour market integration journey faced by immigrants. Too often we have seen our loan applicants take one step forward, to then find themselves pushed three steps back by counterproductive policies and practices. We would be happy to answer questions about that.
Fourth, create an environment that inspires, supports, and rewards social innovation and social finance. IAF is an example of what can be achieved when governments, the private sector, and communities come together to align common interests to tackle the social challenge of reducing poverty.
I started with Abdul and I would like to go back to him. I promised you a transformational story and his is truly that. Abdul borrowed $3,200 from IAF to begin the process of getting his accounting designation in Canada. By the time he had completed two courses, he was hired by a company in Calgary with a starting wage of $40 an hour, but it is Abdul's profound words that stay with us until today. “When I came home with that first paycheque that reflected my years of education and experience, and the dreams and hopes that have brought me to Canada, a paycheque that meant that my family's struggles with poverty were over, my wife and my children cried.”
Thank you.