Canada's universities are graduating students with higher levels of literacy and numeracy than an international survey of skills suggested last year, a new study from Statistics Canada has found.

Postsecondary institutions were put on the defensive when the Organization for Economic Co-operation and Development found that about a third of postsecondary graduates in Canada had levels of literacy and numeracy that seemingly left them unprepared for professional work.

That poor showing – at or below the OECD average – has now been explained as the result of Canada's high proportion of graduates who are foreign-born or have degrees from institutions outside the country. About half of this group had test scores at lower levels. In contrast, only 16 per cent of Canadian-born graduates showed poor literacy skills and 23 per cent had low levels of numeracy.

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The new data give postsecondary institutions much-needed ammunition against critics who are questioning whether graduates are leaving university ready for employment.

On Tuesday, the Conference Board of Canada released a report on skills among postsecondary graduates that recognized differences between native-born or educated graduates and immigrants, but argued that Canada still has room for improvement, given that the country has the highest percentage of tertiary attainment among OECD countries.

Regardless of their literacy and numeracy skills, Canadian and foreign-born graduates have vastly different experiences of the labour market. Canadian-born or Canadian-educated graduates seem somewhat immune from paying a penalty for low skill levels. The vast majority of those with a Canadian postsecondary credential did well – 86 per cent of those at level 2 were likely to be employed in a professional or managerial position, compared with 94 per cent of those at level 3 or above.

Multiple studies have found that immigrants' earnings and employment rates lag those of the Canadian-born for at least 10 years after they arrive, regardless of their educational qualifications. For example, a prior Statistics Canada study revealed that recent immigrants with a university degree earned two-thirds of the salary of the native-born.

Employers could close some of that gap by increasing the amount of on-the-job training, the Conference Board of Canada study suggest. Over the past decade, businesses have decreased spending on training by 40 per cent. In many OECD countries, employees spend twice as many hours in workplace training than in Canada.