Each year about one quarter of a million immigrants come and settle in this country in search of a better life and greater financial and career opportunities. Canada’s immigration quota last year was between 240,000 and 265,000.
Coming to a new country poses many challenges for immigrants, but perhaps two of the biggest are establishing a career and a financial history.
“One of the biggest challenges many new Canadians face is establishing themselves financially,” said Raymond Chun, senior vice-president of TD Canada Trust. “One of the first things new Canadians should do when they first arrive is to start building a credit rating. But in order to build a good credit rating in Canada, you need to apply for credit, which can be challenging when you are new to the country.”
A credit rating reflects your ability to take on, and pay back, money you have borrowed. If you are thinking of buying a house or a car someday, having a good credit rating will help to secure financing and may get you a better interest rate. Similarly, you may even need a credit rating to lease an apartment, apply for insurance, or purchase a mobile phone plan.
There are a few things newcomers can do to build a credit rating in Canada.
Apply for a secured credit card. This gives you all of the advantages of a credit card but requires that you set aside a certain amount of money to provide the bank with the security that you will pay the money back.
Over time, you can build your credit history and eventually your credit rating should be high enough that you can apply for and receive an unsecured credit card.
Always pay bills on time and in full. Pay your bills online and set up automatic payments from your everyday bank account to ensure you are never late or miss a payment.
If you can’t afford to pay the entire bill, then you must at least make the minimum monthly payment.
Know what is being said about you. Your credit history is recorded in files maintained by at least one of Canada’s major credit-reporting agencies: Equifax Canada or TransUnion Canada. You should check it regularly to ensure you’re on track, if you’ve been denied credit, and before a major purchase that requires some serious borrowing.
Visit your local bank branch for more tips on how to manage your day-to-day banking.
Another major challenge for newcomers is to establish their careers.
Despite higher education levels, many newcomers to Canada experience higher unemployment and lower incomes than workers born in the country, says a recent report by RBC Economics. According to the report, an employment and wage gap between immigrants and Canadian-born workers that emerged in 1980s has been widening over the last 30 years.
In 2005, the entire population of immigrants working full time in Canada earned an average of $45,000 a year, about $700, or two per cent, less than the average wage for Canadian-born workers. The most recent immigrants, however, earned an average of $28,700 a year.
And by 2006, the unemployment rate among immigrants was higher (6.9 per cent) than for Canadian-born workers (6.4 per cent).
The report estimates the potential increased incomes for immigrants was $30.7 billion, or 2.1 per cent of the country’s gross domestic product in 2006, if their skills were rewarded equally to those of Canadian-born workers, and concludes that immigrants tend to possess skills that would usually be associated with higher economic rewards than they are receiving.
“The report shows that we are still not recognizing the skill level and talent that newcomers bring to Canada,” said Camon Mak, director of newcomer and multicultural markets with RBC. “Canada was built on immigration, and that’s just as true today.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.