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Earlier this month, Immigration Minister John McCallum said the government is launching a federal-provincial task force to look at how the Express Entry system can better serve international students.

CHRIS WATTIE/REUTERS

A program that allows international students to work in Canada after graduation is creating a low-wage work force, encouraging low-quality postsecondary programs, and needs to be redesigned, says an internal report from Citizenship and Immigration Canada.

Under the Post-Graduation Work Permit Program international students with degrees from Canadian colleges and universities can work here for up to three years after their programs end. Between 50 per cent and 60 per cent of eligible international students applied for a work permit, the report says, with more than 70,000 people holding permits in 2014.

The program is designed to make Canadian postsecondary institutions an attractive destination and to give international students work experience, making it easier to apply for permanent residence.

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But the 35-page report found that the majority of those employed through a work permit are in low-skilled jobs in the service sector, and have median earnings that are less than half of other recent university and college graduates.

"Facilitating this large pool of temporary labour, largely in low-paid positions, may be in conflict with the objectives of the Putting Canadians First strategy," the report states.

That strategy was initiated by the former Conservative government to prioritize employment for Canadians after abuses of the temporary-foreign-worker program came to light. The Post-Graduation Work Permit (PGWP) report was commissioned as part of a larger review of temporary-foreign-worker policies.

The Globe and Mail obtained the report after a nine-month battle. The government initially refused the request. After an appeal to the Information Commissioner of Canada and discussions between the commissioner, Citizenship and Immigration Canada and the newspaper, the government provided a partly redacted version of the report.

Marked "secret," the report reviews six years of the work-permit program, from 2008 to 2014. It raises many questions about how Canada attracts international students and how they transition to citizenship.

Its findings are likely to complicate the recently announced review of how the new Express Entry immigration system is treating international students who want to become permanent residents. Express Entry, introduced in January, 2015, does not award applicants any extra points for studying in Canada, as had been the case under a prior immigration program for international students. As a result, it has been heavily criticized for making it much harder for international students to become permanent residents.

Earlier this month, John McCallum, Minister of Citizenship and Immigration, said the government is launching a federal-provincial task force to look at how Express Entry can better serve this group.

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"International students have been shortchanged by the Express Entry system," he said at the time. "They are the cream of the crop in terms of potential future Canadians …"

The PGWP report, however, suggests that most international students' investment in a Canadian education is not being rewarded by the labour market.

International students with a work permit had median earnings of $19,291 in 2010, compared with about $41,600 for 2013 domestic college graduates and $53,000 for Canadian university grads, according to the review.

There are no explanations for such a poor labour-market outcome in the report, but international students have said it is difficult to find good jobs before they have permanent residency.

Mr. McCallum was not available for comment.

CIC's provincial-federal task force has been widely applauded by advocates for international students and study-abroad groups.

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"The new minister fully gets it," said Amit Chakma, the president of the University of Western Ontario and chair of a 2012 task force on Canada's international-student strategy. "In my view, tinkering with [Express Entry] will not help. My view is that a new program should be created targeting international students who study on our campuses," Dr. Chakma said.

About 47,000 international students graduated from Canadian universities last year, according to recent Statistics Canada numbers. They pay tuition fees three to five times higher than domestic students.

A small group of international students fare better than others. Four per cent of graduates who had a work permit went on to become permanent residents in 2014. The group that chose to stay had earnings that are much closer to those of domestic students.

The report also suggests that the current system is leading to issues of program integrity. Changes to the PGWP program in 2008 removed the requirement that students find jobs in their field of study and increased the possible duration of the work permit.

In response, some postsecondary institutions are now offering "low-quality education programs with minimal entry requirements" to take advantage of rules that match the length of the work permit to the length of the degree, the report says.

Canada is the only country to structure work permits for international students in this way.

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