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TL;DR

More employers are using artificial intelligence (AI) to screen job applications, which could make underemployment worse for skilled newcomers, according to Simon Trevarthen, CEO of the Toronto Region Immigrant Employment Council (TRIEC).

Trevarthen warns about this as employers get more applications than ever, including resumes and cover letters made with generative AI. Automated tools can help sort through them, but they might also repeat old hiring preferences, like favoring Canadian experience or familiar credentials.

In an August 19 report by Canadian HR Reporter, Trevarthen said permanent residents are unemployed at almost twice the national rate of about 6%. He also estimated that 25% to 30% of newcomers work in jobs below their qualifications, compared to about 12% of Canadian-born workers.

"The reason for an immigration system is to attract talent to Canada," Trevarthen said. "When you come to underemployment, you have that mismatch between people who have foreign qualifications and the level of work they're doing."

Trevarthen said a financial institution told him it gets over one million applications each year for about 2,000 jobs. Employers use automated systems to handle this, while applicants use AI to send out more applications.

"It's a blizzard of AI-generated applications that they're trying to wade through," he said.

How employers set up and monitor these screening systems is important. An AI tool trained on past hiring choices might repeat the same patterns. It could also misunderstand international job titles, employers, schools, or career paths that are different from Canadian ones.

"There are implicit biases within AIs," Trevarthen said. He added that even small changes to a prompt can lead to different recommendations. He believes employers should use AI as a tool, not as the final decision-maker, and should balance its results with human judgment.

Statistics Canada research published in 2026 shows that recent immigrants with postsecondary education face a bigger job mismatch than Canadian-born workers.

Among people aged 25 to 54 with postsecondary education, 32.6% of immigrants who arrived in the last five years said they were overqualified for their jobs. For people born in Canada, the rate was 19.1%.

Recent immigrants were almost twice as likely to have jobs that usually only need a high school education: 25.6%, compared to 13.2% for Canadian-born workers. The overqualification rate dropped the longer immigrants stayed in Canada, falling to 24.6% for those here five to less than 10 years, and 22.4% for those here at least 10 years.

Where someone earned their degree also made a difference. Among recent immigrants with at least a bachelor's degree, 27.6% of those who studied in a non-OECD country worked in jobs that only needed a high school education or less. For those educated in an OECD country, the rate was 14%.

30.7% of recent immigrants also said they had more skills than their jobs required, close to the 29.1% reported by Canadian-born workers. But recent immigrants were much more likely to report being overqualified based on education or to hold jobs with lower education requirements.

Another Statistics Canada study found that 31.7% of recent working-age immigrants had trouble finding their first Canadian job or starting a business. The study used data from a Labour Force Survey supplement collected in the third quarter of 2024.

Of the recent immigrants who faced at least one difficulty, 42.2% said they lacked Canadian experience or references. Another 38.3% said they didn't have enough job-market connections, and 34.6% said employers did not accept their experience from outside Canada. These percentages are only for those who reported a difficulty.

The same study found that recent working-age immigrants had a 75.5% employment rate, compared to 85.4% for Canadian-born people of similar age. Recent immigrant employees earned an average of $29.97 an hour, which is 23.7% less than the $39.29 average for Canadian-born employees in the same age group.

Foreign credentials did not always lead to related jobs. Among recent immigrants with postsecondary qualifications from abroad, 53% had worked in a Canadian job that was fully or partly related to their highest foreign credential.

Credential assessment is different from professional licensing. Statistics Canada found that 97.6% of recent immigrants who asked for an equivalency assessment got some level of recognition in Canada. But among those who applied for professional licensing with foreign credentials, only 42.7% received full recognition of their qualifications and experience.

Ontario introduced new job-posting rules on January 1, 2026. Employers with 25 or more employees must say when they use AI to screen, assess, or select applicants for publicly advertised jobs.

These rules also ban Canadian-experience requirements in public job postings and application forms. Employers covered by the law must keep these postings and forms for three years after they are no longer public.

The Ontario Human Rights Commission considers a strict demand for Canadian experience to be discrimination, unless an employer can justify it in special cases. The policy suggests looking at real skills and considering foreign experience fairly.

Federal guidelines give similar responsibilities to hiring managers. The Public Service Commission of Canada says managers are still responsible for decisions made with AI. The guidance tells employers to check AI results, reduce bias, inform candidates, explain automated decisions, and offer a way to challenge them.

Trevarthen said interviews are still one of the best ways to assess candidates. "It's understanding that the AI is a tool and balancing it off with human judgment in order to make the right hiring decision," he said.

If you are applying for jobs in Ontario, look for an AI-use notice in each posting. The notice will not list every screening rule, but it will tell you if an automated system might review your application.