On April 30, 2012, the IRPP, with support from Citizenship and Immigration Canada and the Ontario Ministry of Citizenship and Immigration, held a one-day roundtable on Temporary Migration and the Canadian Labour Market. Participants included academic and other experts on immigration policy and labour market economics, federal, provincial and territorial government officials and graduate students.
On April 30, 2012, the Institute for Research on Public Policy, with support from Citizenship and Immigration Canada and the Ontario Ministry of Citizenship and Immigration, held a one-day roundtable on Temporary Migration and the Canadian Labour Market. Participants included academic and other experts on immigration policy and labour market economics, federal, provincial and territorial government officials and graduate students.
Philippe Massé (Citizenship and Immigration Canada) provided an overview of recent trends within the Temporary Foreign Worker (TFW) streams that Citizenship and Immigration Canada (CIC) administers. Between 2002 and 2011, the number of TFWs residing in Canada increased by a factor of three, from about 101,000 to about 300,000. During the same period, the number of TFWs admitted each year roughly doubled, from about 110,000 to about 190,000.
In contrast with the various permanent residence application streams, the Temporary Foreign Worker Program (TFWP) does not have a cap on the number admitted each year or a significant processing backlog. Instead, the TFWP responds primarily to employer demand. Employers must apply to Human Resources and Skills Development Canada (HRSDC) for a Labour Market Opinion (LMO). Before issuing an LMO, HRSDC assesses information as to the lack of availability of qualified Canadians and whether the terms of the contract will meet appropriate standards, including whether the wage would be what an employer would pay a Canadian. Employers do not have to pay for an LMO.
In recent years, a number of other TFW streams and exemptions to the LMO requirement have been introduced. For example, international students are eligible for an off-campus work permit that does not require an LMO. Between 2002 and 2011, the number of international students holding work permits increased from 6,800 to 60,000. Recent international student graduates are also eligible for a three-year work permit that is not tied to an employer; such “open” work permits do not require an LMO. Canadian international trade agreements, academic exchanges and spousal work permits also account for a large number of open work permits. As a result of these programs and agreements, the proportion of TFWs who enter under a stream that requires an LMO has decreased to 35 percent today from 45 percent 10 years ago.
On April 25, 2012, the Minister of Human Resources and Skills Development announced a number of changes. The first was introducing accelerated LMOs for employers with “a strong track record” and employees with high skill levels, including those from skilled trades. These accelerated LMOs will take only 10 business days to issue. It will also be possible for employers to pay “wages that are up to 15% below the average wage for an occupation in a specific region,” although “employers must clearly demonstrate that the wage is consistent with that of Canadian workers doing the same work in that region.” Massé stressed that this policy would not, in fact, mean that employers could pay TFWs less than they would pay a Canadian in the same position, only that they could pay a lower rate than what HRSDC considers to be the prevailing wage for a given occupation in a given region. This could be necessary due to variation in wage levels among communities in the same region or to take account of differences in workers’ experience.
Massé also mentioned a number of concerns, including that: (1) TFWs may displace Canadians, particularly in areas with high unemployment; (2) the composition of TFWs, particularly with regard to high numbers of youth and high-skilled workers, could distort or negatively impact labour markets; (3) Canadian employers may not train Canadians if they can hire TFWs instead; and (4) Canada could move toward a European-style guest worker system if the number of TFWs continues to grow in absence of pathways to permanent residence for lowskilled temporary workers. The complexity of the TFWP, given the large numbers of different streams, exceptions and exemptions for LMOs, along with the necessity for coordination across federal departments and between the federal and provincial governments, are also concerns.
In their presentations, Cristina Caron and Craig Riddell each identified a number of trends that are relevant to assessing the role of TFWs within the labour market. Among these trends are declining birthrates and an ageing population; increases in education as a job requirement; the late 2000s recession; largely stagnant real wages in recent decades; and the possibility of shortages in certain occupations, industries or regions. [Except where indicated otherwise, the trends summarized below are taken from Caron’s presentation.]
Within a few years, immigrants and people from visible minority groups are likely to account for most of the net labour market growth in Canada, although, particularly in Western Canada, aboriginal people will also account for a portion of labour force growth. Within this context, it is clear that permanent residents and temporary migrants will play a crucial role in the Canadian labour market.
One of the central issues in assessing the TFWP and the Canadian labour market is education. Employers increasingly demand more skilled employees. In large part, this is due to technological change. Between 1990 and 2009, job growth has been largest in occupational class A jobs (which require a university degree), followed by class B jobs (which require a college diploma). HRSDC also projects that these types of jobs, particularly class B jobs, will account for a large portion of the openings between now and 2020. Caron expressed concern that the increasing demand for more educated workers could create an undersupply of workers relative to the positions that need filling. A particular concern was the possibly of a skills mismatch − a situation in which people do not have the training for jobs that are in demand. These mismatches can be at the regional, industrial or occupational levels. Another concern was that increasing demands in education and skills levels worldwide would make it more difficult to find new immigrants and temporary migrants that fit Canada’s needs (particularly highly skilled immigrants and temporary migrants).
Over the past five years, people admitted under both permanent residence and temporary migrant streams have tended to have high levels of education—much higher than people born in Canada. Nearly half of both recent immigrants and temporary migrants have a bachelor’s degree or higher, and the overwhelming majority have some form of post-secondary certification. On the one hand, these educational demographics could suggest that Canada’s immigration and temporary migration programs are, in a sense, relatively well-oriented towards the skills levels Canadian employers demand. On the other hand, the largest single group of TFWs, as of September 2011, was skill class C − people who had completed a post-secondary certification but not a bachelor’s degree. This group is usually considered to be low skilled.
Despite this orientation toward high-education applicants, immigrants are disproportionately likely (relative to people born in Canada) to be underemployed or employed in jobs that do not fully utilize their skills. 56 percent of recent immigrants have more credentials than their jobs require, as opposed to 24 percent for people born in Canada. In part, this could be due to the lack of recognition of foreign credentials, both officially (by professional and trade associations) and unofficially (by Canadian employers). For the most part, immigrants with Canadian credentials earn as much or almost as much as people born in Canada with Canadian credentials. Some participants suggested that this might be a reason to increase the number of international students and allow them to become TFWs or permanent residents after graduation.
The late 2000s recession necessarily colours the recent labour market performance of foreign-born individuals in Canada. Despite overall increases in job levels, Canada’s unemployment rate is still higher than before the recession. Recent immigrants—defined as those in Canada for 5 years or less—had a disproportionately high proportion of losses in the first year of the recession. The employment rate of recent immigrants went down by 13.4 percent between October 2008 and October 2009. Recent immigrants, as of February 2012, have only reached 92.6 percent of their pre-recession (February 2008) employment levels. In contrast, immigrants who have been in Canada for 5-10 years have seen a slight increase in their employment rate over the same period—about 0.9 percent. They are one of a few groups that have reached higher levels of employment than before the recession.
Craig Riddell pointed out that, over the past several decades, real wages in Canada have remained stagnant. One possible explanation for this phenomenon could be that immigrants and, more recently, temporary migrants are suppressing wage growth, as the usual response of employers to continued vacancies is to raise wage levels. These issues are particularly important at the lower end of the income distribution. Allowing increasing numbers of TFWs, particularly at the low-skill end, provides additional wage competition for people already within Canada, which can suppress wage levels. Given that, as Cristina Caron pointed out, skill class C TFWs have formed the largest group in recent years, this is a particularly relevant concern.
One of the most common arguments in favour of admitting (more) TFWs is that there are labour shortages either due to technological or geographical issues. However, Riddell’s view is that it is important to acknowledge regional differences in assessing the impact of temporary migrants; this is particularly true for shortages. Alberta, Saskatchewan and Nunavut, in particular, have relatively low numbers of unemployed people for each new position that opens up, while Quebec and the Atlantic provinces tend to have more unemployed people per job opening.
However, Riddell expressed scepticism about projections of labour shortages. In part, this is due to methodological issues, such as assuming constant rates of growth and fixed coefficients over time for various predictors of aggregate supply and demand. Furthermore, he suggested that it is possible that the TFWP prevents the labour market from correcting itself when there are shortages, since TFWs can provide an easy alternative for employers who may not want to spend resources to (re)train people already in Canada to do various jobs. To the extent that labour shortages exist, however, he argues that TFWs could provide a way of addressing them.
The Seasonal Agricultural Worker Program (SAWP) allows people from other countries to come to Canada for a maximum of eight months a year. This program has had strong growth since the late 1980s—about 20 percent growth in the 1990s, then a 10 percent growth rate in the 2000s. In recent years, about 24,000 people have entered annually under the SAWP.
Since 2008, the Low-Skill Pilot Program (LSPP) has allowed TFWs to work in the agricultural sector. This creates a situation in which CIC has two different programs with different standards for the same industry. Temporary agricultural workers entering under the LSPP face many of the same issues that those entering under the SAWP do, including very limited opportunities to apply for permanent residence. However, the LSPP allows agricultural workers to stay in Canada for up to 24 months straight, as opposed to requiring that migrants leave for part of each year.
In 2009, Mexico accounted for over half of agricultural migrant workers (at about 15,800 people), followed by Jamaica (6,000) and Guatemala (3,900). Among Mexican SAWP migrants, 75 percent have been participating for 4 years or more, and 57 percent have been participating for 6 years or more. However, seasonal agriculture workers do not necessarily return to the same communities each year, which limits their integration.
Their permits are tied to a single employer for a given season. This can lead to situations in which employers exploit their employees, since being fired also means having to leave Canada. Employers also frequently provide housing for their employees. This gives employers even more leverage over foreign agricultural workers.
Migrants who enter under the SAWP have no access to permanent residence. However, according to a survey of migrant workers, three-fifths of this group would like to take up permanent residence. It is not clear exactly what that means. It could mean that they do want to immigrate permanently.
Even without considering permanent residence, Jenna Hennebry argued that we should consider what integration means for temporary migrants. This can mean developing English or French language skills and interacting with people born in Canada. Agricultural migrants often face long hours of work and linguistically and racially segregated workplaces that limit contact with people born in Canada. The rural location of the work also isolates agricultural migrants. Finally, there are institutional issues, including lack of access to integration services, a tendency for jurisdictions to avoid responsibility and the requirement that agricultural workers return to their country of origin.
Hennebry recommended a number of policy changes. First is to allow some access to permanent residence. She also suggested (and a number of participants agreed) that CIC should standardize one stream for agricultural migrant workers. This new stream could be industry-tied rather than employer-tied so that agricultural migrants have more autonomy as to where they live and work. It could also change the entry visa from single-entry to multiple-entry, allowing temporary migrants to leave to visit their families or avoid having to have their permits renewed each year for a new growing season. Another source of flexibility and way to foster integration would be for family members to obtain visitors visas or work permits. Increased monitoring, prescreening and informing temporary migrants about other labour standards issues could also improve the working conditions of agricultural migrant workers.
The Live-In Caregiver Program (LCP), introduced in 1992 to replace the Foreign Domestic Worker Program, allows workers to enter Canada temporarily to work in the domestic care industry under the condition that they live in a client’s private home for 24 months out of a period of 48 (formerly 36) months. This work requirement can now be calculated hourly, though with an absolute minimum period of 22 months, no matter how many hours the participant works. After that period, participants become eligible to apply for permanent residence. Applicants for the LCP need to meet a number of criteria, including language ability, the equivalent of Canadian high school education, a written contract with an employer and a letter from HRSDC indicating that the labour market situation necessitates hiring someone from abroad. Due to the relatively low education requirement and the opportunity for permanent residence, the LCP provides a rare opportunity for low-skilled individuals to immigrate permanently to Canada. The number of LCP workers who become permanent residents each year more than tripled between 1996 and 2007.
The LCP was originally designed to address child care needs. However, as Ivy Bourgeault demonstrated, it is likely to become increasingly important as Canada looks for ways of caring for its ageing population.
As with the agricultural programs discussed above, the LCP has a very clear skew towards a particular source country. In this case, it is the Philippines, which accounts for more than 80 percent of entries under the LCP. Any evaluation of the LCP must necessarily take into account its highly gendered nature. It is also notable that the LCP is usually considered to be a program for low-skill migrants, even though many applicants have months of training in fields such as nursing.
LCP participants face the risk of social isolation (and limited integration) because they spend relatively little time with native-born Canadians except the people they take care of at work. Live-in caregivers often face long work weeks with low pay. Much like with agricultural migrants, live-in caregivers are tied to an employer who has tremendous power over them -if the worker is fired, deportation can follow. The permanent residence incentive may exacerbate this, since it necessarily creates a situation in which participants may accept poor work conditions in the short run in exchange for better opportunities in the long run. Recent changes have attempted to address these issues, including the introduction of a hotline for LCP participants and expedited processing for a new work permit for participants who claim to have been exploited.
The potential for and reality of exploitation of live-in caregivers troubled a number of participants. Some asked whether this program should continue to exist. It was suggested that, if it were ended, domestic workers could enter through other temporary migration streams.
LMOs were a major point of discussion during the roundtable. Arthur argued that although LMOs were supposed to protect the domestic labour market, they were not necessarily effective. In part, this is due to the overall trend toward open work permits, international trade agreements and other policies that have led to a decrease in the number of LMOs. Some participants called for requiring LMOs for a greater number of TFWs.
A considerable portion of the discussion focused on recent policy changes and announcements. The introduction of accelerated LMOs was explicitly designed to respond to employer’s requests for faster processing. However, this shift creates a situation in which HRSDC and other agencies can no longer assess labour standards before the arrival of a TFW at a workplace. The removal of pre-screening procedures necessitates either trusting employers or engaging in some degree of enforcement to ensure that employers do not violate the labour or human rights of the TFWs they sponsor, including basic issues such as hours worked.
In his presentation, Sweetman noted that employers did not have to engage very much with the Canadian labour force before or during their LMO applications. Essentially, all employers have to do is prepare a contract and advertize the position for two weeks. They are not obliged to hire, interview or even acknowledge potential applicants from within Canada.
One crucial aspect of the current LMO regime is that employers do not pay anything for requesting an LMO. This, in practice, subsidizes LMOs for employers at taxpayers’ expense. This may partly account for the increase in TFWs in recent years, despite the last recession and high unemployment, particularly in certain regions.
A number of participants agreed that some kind of a price to employers who request an LMO would be beneficial. For example, some participants suggested there should be a fee to cover the costs to HRSDC. Some also wanted the price to include the cost of enforcing labour standards and auditing employers. Another possibility would be to have a two-price system, with a higher fee for fast-track LMOs.
Chedly Belkhodja (Université de Moncton) underlined that international students have become a significant group of temporary migrants: the number has increased considerably in recent years, and they have greater opportunities to become TFWs and permanent residents. In 2011, 98,378 international students entered Canada, compared to 67,883 in 2005. During the same period, the total number of international students living in Canada more than doubled from just over 97,000 to over 239,000. Since universities are not restricted as to the number of international students they can admit, it is possible that the increase will continue.
Recruiting international students is one way of addressing the coming demographic challenges of low population growth coupled with an ageing population. International students who decide to stay in Canada have (1) Canadian academic credentials, (2) high skill levels and (3) language abilities in one (or both) of Canada’s official languages. These attributes mean that international students should integrate fairly readily into the Canadian labour market.
For universities, one way to keep student population levels the same or higher when the pool of domestic students is not growing as quickly is to admit more international students. Universities can also charge international students higher tuition fees than domestic students, although one participant suggested that such differential tuition only covers the funding not obtained from government sources. Furthermore, universities will tend to view attracting international students as a way to increase their standing within the academic world.
Perhaps even more so than other temporary migrant streams, the study permit system has evolved to provide a set of stepping stones – first, authorization to work in Canada and then later permanent residence. In 2006, international students gained access to off-campus work permits, which allow 20 hours of work off campus during the school year and full-time work off campus during academic breaks. In 2008, the post-graduation work permit was changed to allow recent international graduates to live and work in Canada for three years, without any geographical restrictions, ties to any employer or requirements to work in a field related to their degrees. Finally, the introduction of the Canadian Experience Class (CEC), the Quebec Experience Program (PEQ), the doctoral stream in the Federal Skilled Worker program and other provincial programs provide international graduates with pathways to permanent residence.
However, some participants cautioned against simply assuming that international graduates will integrate easily into Canadian society. The same incentives that lead universities to admit considerable numbers of international students do not necessarily foster integration. For example, universities do not necessarily focus on the labour market outcomes of their graduates. Some participants also questioned the assumption that Canadian university and college graduates will necessarily have solid English and French language skills, since some postsecondary institutions could lower their admissions standards to attract more international students. One participant expressed concern that international students could be displacing domestic students. Another participant noted that representatives of foreign governments are not always happy with Canada taking away their own potential human capital and that some sending countries have started to make more demands on Canadian postsecondary institutions.
One of the key issues underlying the presentations and discussions at the roundtable was how and whether temporary migrants should have access to permanent residence.
At present, for low-skilled migrants, particularly those who enter under the Low-Skill Pilot Program or the Seasonal Agriculture Worker Program, there is usually no path to permanent residence. An exception is the Live-In Caregiver Program, which explicitly offers the hope of permanent residence as an incentive to come to Canada temporarily. In contrast, for many high-skill migrants and, particularly, international graduates, there are a number of clear paths to permanent residence, including Provincial Nominee programs, the Canadian Experience Class (CEC) and the Quebec Experience Program (PEQ).
The idea of granting permanent residence to low-skill temporary migrants was contentious. Some participants emphasized the recurring issue of whether low-skill TFWs suppress wage levels overall within Canada. Others tended to take the view that permanent residence would offer one way to make migrants status secure, particularly if, like with migrants under the SAWP, they stay in Canada for longer periods of time.
Temporary migrant status may just be a stepping stone to immigrating permanently to Canada. This process offers a number of benefits. Given that wait times for temporary permits are low and the total admittances are not capped, temporary permits allow foreign nationals easy ways to enter Canada earlier and begin working and integrating. Canada can also benefit from the stepping stone approach by using each stage as a pre-screening for permanent residence. Effectively, we would already know how these applicants would perform in the labour market before giving them permanent residence.
Many of the discussions about permanent residence focused on recently introduced “stepping-stone” streams for permanent residence applications, particularly the CEC. The CEC allows relatively quick access to permanent residence for highly skilled temporary workers and foreign students already living in Canada. It has a number of specific conditions. First, applicants must have been enrolled for at least two years full-time in a Canadian postsecondary institution. Then, after graduation, applicants must have one year of full-time skilled work experience in Canada (skilled being defined as Skill Type 0 or Skill Level A or B under the National Occupational Classification). However, as of 2010, the program is not very large. That year, about 4,000 people gained permanent residence through this stream.
Belkhodja noted that the approval rate under the CEC is 86 percent; however, CEC landings are heavily slanted towards Ontario, BC and Alberta—the most populous of the eligible provinces. (Quebec does not participate in the CEC, instead operating its own program for applicants with relatively similar profiles, though with exceptions—for example, there is no work experience requirement for recent postsecondary graduates.) In contrast, only 28 landed in Atlantic Canada. However, it is difficult to assess where CEC-approved immigrants actually live and work, since they are free to move around Canada after landing. Provincial Nominee programs may be necessary to compensate for the geographic concentration of CEC landings. Nine of the ten provinces (New Brunswick being the exception) already offer international graduate streams for attracting international graduates to their provinces. He also argued that the overall impact of CEC applications is also difficult to assess due to the inclusion of spouses and dependent children on some CEC applications.
Some participants were concerned that the CEC, along with other streams specifically for international students and graduates, undermined the goals of or the integrity of the point system, since relatively few of the criteria under the points systems are considered under these systems. Other participants were concerned that the skilled worker stream of the CEC gave too much power to employers, who may be more interested in short-term performance than in Canada’s long-term labour market needs. However, Sweetman, in his presentation, noted that, if you look at applicants under the Federal Skilled Worker Program before 2008 who fit the profile of the CEC (but were not eligible to apply because the program did not yet exist), these immigrants performed well in the labour market. Immigrants admitted under the FSWP did not necessarily do as well. He also suggested that the CEC effectively functions as a points system that weights Canadian experience very highly in comparison with international experience. In that sense, the points system is an imperfect prospective system for admitting applicants, whereas the CEC and related programs are retrospective systems. It will take more years of data on the performance, integration and characteristics of CEC-approved permanent residents to answer some of these debates more definitively, however.
Another major recurring issue at the roundtable was the difficulty of keeping track of TFWs, let alone measuring their characteristics or impact on Canadian society or the labour market. Open work permits, such as post-graduation work permits, have led to a situation in which CIC does not know where large numbers of TFWs live or work—or even whether they are in Canada. Employer-tied (or closed) work permits, in contrast, offer significant advantages in terms of data.
Sweetman pointed out a number of problems in measuring TFWs. Multiple permits pose a particular problem. For example, international students may also have work permits and be TFWs. However, they are only counted as students. The CIC classifications also do not necessarily reflect labour market realities. For example, international students may work on campus without a permit, in which case their situation is like that of a TFW without a permit. Visas for spouses and common-law partners, when tied to international students, also raise questions of classification.
Caron also noted a key flaw in HRSDC data: TFWs are often not included or identified in labour force information. She also pointed out that we do not always know when TFWs leave Canada, which limits our ability to assess their overall impact.
Hennebry found that it was difficult to separate agricultural migrant workers in Canada under the SAWP from those under the LSPP. It is therefore difficult to assess the labour market impact of each group. Including both groups together may also lead to inferences about each program that would not be supported if they were disaggregated.
Some participants suggested that we could conduct surveys to gather more information about the characteristics of TFWs, although contacting and sampling temporary migrants could be difficult. Another approach is to consider new ways of using or improving administrative data. One participant suggested that we could glean information about TFWs, at least with regard to how they transition to permanent residence, by looking at changes in social insurance numbers (SIN). Given that all temporary migrants have a SIN that starts with 9, it is relatively easy to identify people who have transitioned from a temporary SIN to a permanent SIN.
It is clear that temporary migrants already play a significant role in Canada’s labour market and overall immigration system. It is likely that they will play an increasing role in the coming years, particularly given Canada’s declining birthrates, ageing population and the worldwide competition for human capital.
This roundtable allowed participants to take stock of what we know about flows of temporary migrants and some of the issues raised by current policy and program criteria. However, further research and policy analysis are required in order to improve the level of information about the various categories of temporary migrants and, in particular, their impact on the labour market (including at the provincial/regional level). The following are some of the unanswered questions:
It will also be important to study the Canadian Experience Class (CEC) and its equivalent in Quebec. These programs are closely tied into the TFWP due to their in-country employment options, particularly for those without Canadian university degrees. However, given that these programs are still quite recent, there is not have enough data to analyze their effectiveness compared to other immigration programs.
A number of data gaps were identified during the roundtable. There are no available data for TFWs on open work permits on matters such as their employment status, place of residence and even whether they are in fact in Canada. For all TFWs, there are data on when their visas expire but not when they actually leave Canada. As for international students, many have offcampus work permits yet may be counted as international students rather than TFWs. Others work on campus (which does not require a work permit); their situation is thus like that of TFWs without a work permit. Their spouses may also not be counted as TFWs. Participants suggested a number of ways to address these data gaps:
A number of recommendations emerged from the roundtable presentations and discussion:
Canada’s Temporary Foreign Worker Program
Update on the evaluation of Temporary Foreign Worker Program
Trends in the Canadian Labour Market
Temporary Migration and the Canadian Labour Market
Agricultural Migrant Workers
The Live in Caregiver Program
Ivy Lynn Bourgeault
International Students: Trends, Policies, Challenges
Survol de l’immigration temporaire au Québec