Canada’s diverse small business owners

5 minute read

Many ethnic minorities face incredibly difficult business challenges in Canada. They are subjected to prejudice, a lack of work opportunities, a significant pay gap, unsafe working conditions, and workplace discrimination. Despite their uphill battle, many immigrants work very hard to be outstanding employees and many even become successful small business owners – fueling our economy, creating jobs for Canadians, and empowering their community.

Employment obstacles for immigrants

It’s not surprising that so many immigrants become entrepreneurs instead of entering the corporate workforce. This may be tied to the fact that their names alone can prevent them from even making it to the interview stage of the hiring process – regardless of their levels of education and experience.

In 2011, Canadian researchers conducted a massive research experiment involving 13,000 resumes sent out for jobs that required three to seven years of relevant experience and an undergraduate degree. The researchers found evidence of considerable discrimination against applicants with foreign-sounding names. Imagine someone knocking you out of the running for a job just because of your name!

While having Canadian work experience positively influenced the callback rates for immigrants with foreign-sounding names in the experiment, having Canadian education did not.

Discrimination against candidates with foreign-sounding names was undeniable in the experiment. Even individuals who had obtained their undergraduate education in Canada, and had work experience from Canada, endured it. The researchers observed that by changing only the name on a resume (from an English-sounding name to an Indian, Pakistani, or Chinese name) they actively decreased the likelihood of a callback by 4.4 per cent from a base of 15.7 per cent – a staggering 28 per cent decrease.

Some individuals defended the outcome of the study, suggesting that foreign-sounding names were rejected due to employers’ hesitations to hire employees who may not have a solid command of English. The researchers explored that angle too, but found that that was not the case. Callback rates didn’t budge, even for candidates who listed fluency in multiple languages including English, graduated from a better university, or obtained a master’s degree.

The fact that so many Canadian immigrants have such a seemingly impossible hurdle to overcome is particularly shocking when you consider that this is Canada. We are known as a country that embraces diversity, and welcomes people from all over the world with open arms.

Canadians’ mixed attitudes towards immigrants

A recent survey of Canadian citizens regarding their feelings on diversity suggests that our views on it aren’t totally black and white. CBC news conducted the nationwide survey, noting that Canadian’s views varied by region, especially around key topics such as the economy.

According to the study, 75 per cent of respondents say Canada “is a welcoming place for all ethnicities.” 79 per cent of respondents said they would be comfortable either employing or working for someone of a different ethnicity. 55 per cent of respondents “agreed” or “strongly agreed” that immigrants are “very important to building a stable Canadian economic future.” But the survey also found that 30 per cent of respondents “agreed” or “strongly agreed” that “immigrants take jobs from Canadians.” This is very important to note in light of Canada’s current immigration policy.

Canada is actively prioritizing the immigration of highly skilled individuals who we hope will fill vital roles in our workforce and help fuel our economy. Our current Canadian immigration policy favors immigrants with high levels of education and experience in high-demand industries. We have always aimed to attract skilled immigrants, but never to this extent, and we used to welcome more family members of immigrants than we currently do today.

In the last few years, more than half of all immigrants have been welcomed to Canada under a point system. It rates applicants on various factors including education, age, work experience, and language ability. Most of our new and highly skilled immigrants come from China, India, or Pakistan. Almost all new immigrants who enter under the point system have an undergraduate degree. Regardless of their high skill levels and exceptionally good education, the unemployment rate for recent immigrants is roughly double the unemployment rate for Canadian-born workers who are the same age. Immigrants also earn 48 per cent less than similarly-aged non-immigrants with equivalent degrees.

We need to leave our prejudices behind

So why are Canadians saying that our doors are open to immigrants when they clearly seem to be closed to them in the workplace? Perhaps Canada is not as welcoming as advertised. So much so that Prime Minister Trudeau recently addressed the nation, encouraging (or perhaps reminding) Canadians to uphold our tradition of warmly welcoming immigrants and refugees to Canada, offering them the chance to start a rewarding life here.

Canada has learned how to be strong not in spite of our differences, but because of them, and going forward, that capacity will be at the heart of both our success, and of what we offer the world. Our commitment to diversity and inclusion isn’t about Canadians being nice and polite—though of course we are. In fact, this commitment is a powerful and ambitious approach to making Canada, and the world, a better, and safer, place. We have a responsibility—to ourselves and to the world—to show that inclusive diversity is a strength, and a force that can vanquish intolerance, radicalism and hate. Canada’s success as a diverse and inclusive nation didn’t happen by accident, and won’t continue without effort. The future is never certain. It depends on the choices we make today. Compassion, acceptance, and trust; diversity and inclusion—these are the things that have made Canada strong and free. Not just in principle, but in practice. Those of us who benefit from the many blessings of Canada’s diversity need to be strong and confident custodians of its character. Let us not close our hearts to those in need, nor our minds to the knowledge that better is always possible. We are, after all, Canadian. Let’s show the world the very best of what that means.

Immigrant entrepreneurship

Until more Canadian employers adopt this welcoming mindset, it’s likely that immigrants will continue to gravitate towards self-employed vocations in Canada. In fact, more immigrants become business owners than Canadians. This may be partly linked to the fact that employment agencies suggest starting a business to new immigrants who have trouble finding employment.

According to Statistics Canada, by the time they’d been in Canada nine years, about 5.3 per cent of immigrants owned a private company, meaning they formed new businesses more quickly than the Canadian-born population where the rate is 4.8 per cent. Another 19.6 per cent of immigrants were classified as unincorporated self-employed persons, compared with 16.1 per cent of the Canadian-born group. Immigrants who had been in Canada between 10 to 30 years were also more entrepreneurial than the Canadian-born group. 5.8 per cent of longer-term immigrants own private companies.

Small businesses help all of us

The country’s economy has definitely benefited massively from the trend of immigrants becoming self-employed business owners. Small businesses bring a ton of money into the country, not to mention create jobs for Canadians. In fact, 46 per cent of Canada’s private sector workforce is made up of small business employees. That means that 5.1 million Canadians rely on a small business for their livelihood.

Instead of closing our minds and our doors to people from abroad who choose to call our country home, we need to shift our mindset to welcome them and celebrate their contributions and achievements in business. Whether we employ newcomers directly, or engage with their businesses, we should being showing newcomers the same support we aim to show our fellow Canadians. We’re all in this together.


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