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A Certificate of Canadian Citizenship rests on the lap of a new Canadian Citizen during a Canadian Citizenship ceremony in Ottawa on Wednesday, September 29, 2010.

Canada's immigration system can be improved without a major overhaul if program overlaps can be reduced, with Ottawa focusing on long-term labour market objectives and letting the provinces and the business-driven temporary worker program address short-term needs, says a new report.

All three main programs to immigrate to Canada are currently designed to meet immediate labour needs and end up overlapping, says the special report released Tuesday by TD Economics.

The report comes at a time when the face of Canadian immigration is changing, a reality expected to be highlighted when figures for the 2011 census are released this week.

Furthermore, Federal Citizenship and Immigration Minister Jason Kenney intends to reform Canada's immigration system this year.

Historically, the lion's share of newcomers to Canada entered through the Federal Skilled Worker program. Others came under the Temporary Foreign Worker program and, since the 1990s, provinces have sought out their own economic immigrants under what is called nominee programs.

The problem, the report says, is that "the FSW, TFW and provincial nominee programs are all seemingly designed to address short-term labour demand, creating significant overlap, while the longer-term challenges of the job market are left unaddressed."

The report noted that the oft-backlogged federal skilled-worker stream has contributed to the "doctor driving a cab" trend.

For example, half of the of the immigrant men who were let into Canada between 2000 and 2005 had a background in computer science or engineering, right at the time the dot-com bubble was bursting.

"The Federal Skilled Worker program, as it stands, is simply not nimble enough to respond to the rapidly changing needs of the Canadian labour market," the report says.

At the same time, provincial governments have been allowed under nominee programs to meet their own local economic needs by targeting specifically certain classes of immigration, with the federal government expediting the nominees' permanent residence application.

(Quebec has operated its own immigration program since 1991.)

Provincial nominees tend to have lower levels of education but almost always have a pre-arranged job.

"The provinces and the private sector through their provincial nominee programs and the TFW program are better positioned to identify and respond quickly to their rapidly-shifting and varying short-term labour market needs," the report says.

Ottawa should make the Federal Temporary Foreign Worker a complement to the provincial nominee programs, implementing quick approval times and having it target specific skill sets rather than broader job categories, the report said.

To re-align its Federal Skilled Worker program for more strategic goals, Ottawa should be flexible and open when it decides which job descriptions are eligible in that stream.

"Effectively predicting high-demand occupations will require a combination of empirical modeling and regular consultations with the private sector," the report said.

It also argues that, since the skilled-worker program would no longer be aimed at meeting short-term labour needs, a greater emphasis should be placed on the applicants' ability to speak English or French.

Under the current points system, an applicant needs to score at least 67 points out of a maximum of 100 to become eligible. Since language skills count for 24 points, "in theory, a prospective immigrant with absolutely no ability to speak either official language can still gain acceptance," the report noted.

The picture is not entirely negative, the report says.

"What might come as a surprise to many Canadians is that this country is generally looked upon favourably due to its perceived success at attracting and retaining a disproportionate share of high-quality migrants . . . many countries – including Sweden, Germany, and Japan – are now looking towards Canada as a model in developing immigration systems for targeting high-skilled immigrants."

Changes are nevertheless required to meet the need for skilled labour that will arise from the impending retirement of baby boomers.

"Skilled immigration will define the landscape of the global labour market over the longer term as nations compete for a relatively small pool of skilled labour," the report predicts. "An effective immigration system will thus be critical to the long-term prosperity of Canada."