The Who, What, and Why of Investing in Newcomers

By Matthias Pries, Impact Investing Manager 

Migration is the loom that weaves the rich tapestry that is Canadian society. Walk down the main street of any Canadian city and you can see, smell, and hear it. Working at World Education Services (WES) has given me a chance to strengthen this tapestry. How? By investing in what enables people to learn, work, and thrive, and by supporting leaders who have relevant lived, learned, and laboured experience.

This work is close to my heart. All four of my grandparents left what is now Ukraine as refugees during the violent aftermath of the Second World War. Two came to Canada directly; two spent a decade in the tropical forests of Paraguay before settling in Manitoba. I have always been grateful that my grandparents were given the opportunity to build a life in a new home, and I have always acknowledged the value of immigration. But my work at WES has helped me understand the true scale of impact that newcomers—including immigrants, people who have been forcibly displaced, and international students—have on our societies and economies.

In January I celebrated my one-year anniversary with WES. During that year, my team committed over $5.5 million in new mission-aligned investments and partnerships to promising solutions that will benefit newcomers, employers, and Canadian society at large. In my second year at WES, I’ve been reflecting on some insights that will shape my work in the coming months.

Matthias, far left, and leaders of WES’ investee partners at an October 2023 gathering.

1. The enormous positive impact that immigrants have on our society and economy goes beyond the numbers. We need to keep saying that out loud.

Immigrants drive our economy by supplying four-fifths of labour force growth, boosting our national GDP, and contributing massively to consumer spending. They are sources of small business innovation, accounting for one-third of all business owners in Canada. Studies have found that every year economic immigrants provide an annual net fiscal benefit to Canada. Meanwhile, international students contribute over $21 billion to the economy annually.

Beyond this substantial economic impact, newcomers are the key to creating a resilient Canadian society. They arrive ready to provide employers with a wealth of global experience, knowledge, networks, and diversity. Many actively participate in their new home communities through volunteering and civic engagement.

However, the benefits of having immigrants in our country are not always acknowledged. Indeed, despite our global reputation as a welcoming society, Canadian attitudes toward immigration appear to be shifting. In 2019, in a survey of 145 countries, Canada was ranked the country most accepting of immigrants. However, recent polls show that Canadians are now significantly more likely than they were a year ago to say there is too much immigration to the country, reversing a decades-long trend. While Canadians are still more likely to disagree than agree that immigration levels are too high, the gap between these opposing views has shrunk over the last year, from 42 percentage points to just 7. This comes in the wake of post-COVID-19 inflation, a sky-high cost of living, and the conflation of immigration levels and various affordability crises.

Now more than ever, we must actively seek to shift the narrative about newcomers and support their efforts to realize their potential.

2. We need to do much more to deepen the social, economic, and education inclusion of newcomers.

Despite all that immigrants contribute, our social, economic, and educational systems continue to fall short of adequately advancing opportunities for migrants, holding them back from realizing their full potential.

Newcomers to Canada face significant barriers upon arrival. Recent immigrants are credit-invisible at rates twice those of the Canadian-born population, severely limiting access to critical financial services. They also face difficulties with underemployment: 25 percent who hold degrees earned in other countries labour in jobs that require at most a high school diploma—twice the rate of those born and educated in Canada.

As a result, recent immigrants with university degrees earn only 70 percent of the income earned by their Canadian-born counterparts, exacerbating inequality and limiting financial security and well-being. International students also face significant barriers to inclusion. They often struggle to afford the Canadian cost of living, encounter myriad job search difficulties, and, upon landing a job, earn 20 percent less than Canadian-born candidates. As a result, an estimated $20 billion of GDP is lost each year because of the untapped potential of immigrants.

We need to invest more in efforts that target the social, educational, and economic inclusion of immigrants, and work to amplify the value they provide to our community. At WES, we invest across asset classes and sectors, both directly in early-stage ventures and through emerging fund managers that are addressing these challenges head-on. Our investee partners are pushing their sectors forward with innovations that help newcomers and other overlooked communities access student loans, build credit, find jobs, buy homes, and own businesses.

3. The right investment is important. But the “how” and “who” of investing are just as important as the “what.”

Writing a cheque is simply not enough. Over the years I have learned that how you invest and who you invest in are as important as what support. At WES, we define our impact across all three of these dimensions.

The “what” is self-evident – we invest in economic, social, and education inclusion on behalf of immigrants, displaced persons, and international students, alongside other underserved communities.

By also focusing on the “who,” we seek to address systemic inequities and unlock overlooked talent. We back proximate leaders, those who are closest to the problems they are looking to solve and have the deepest insights into how to craft right-sized solutions. We don’t look to check boxes; we seek instead to support leaders who have relevant lived, learned, and laboured experience.

By examining the “how,” we look to evolve traditional investment practices to foster more equitable and prosperous partnerships. We engage in trust-based investing, an investment approach rooted in developing “trusted, authentic relationships based on respect, transparency, mutual learning, and accountability.” Trust has always been a component of the investment contract, but by naming it and placing it at the fore, we hope to uplift the relative value of relationship as both a key component and outcome.

We also look to influence others to examine the “how,” by fueling the creation of initiatives such as the Participatory Investing Toolkit. Some communities have historically been excluded and harmed by traditional investment structures. This resource supports investment approaches that enable communities to hold meaningful power and ownership over capital strategy, design, implementation, and outcomes.

By consistently questioning how things are done, we hope not only to improve our own practices but also to encourage equitable practices that push the field forward.

The past year has been one of great growth, but also of deep learning. It has helped me to understand the nature and scale of the positive impact that immigrant communities have on our economies and society and afforded me the privilege of investing in tools to amplify that impact. Despite the many complex challenges facing the immigrant community today, my optimism is unwavering. Perhaps this optimism is a result of epigenetic inheritance, passed down to me from my grandparents, who looked to the future and saw an opportunity to build a new life for themselves. I hope to use these lessons to give more newcomers, people like my grandparents, the opportunity to work, learn, and thrive in their new home.