A recent analysis by Statistics Canada reveals a significant trend in Canada's labor market: temporary foreign workers are increasingly being employed in lower-paying job sectors.
This blog post examines this shift, its implications, and additional aspects crucial to understanding the changing landscape of temporary foreign labor in Canada.
Concentration in Low-Paying Sectors
According to Statistics Canada's report, three sectors — accommodation and food services; retail trade; and administrative and support, waste management, and remediation services — have become prominent employers of temporary foreign workers. These sectors accounted for more than 40% of all temporary foreign workers in recent years, a notable increase from 33% in 2010 to 43-45% in 2019-2020. This change is particularly significant considering the impact of COVID-19 on sectors like accommodation and food services source: Statistics Canada Report, Yuqian Lu and Feng Hou.
Sector-Specific Dependence on Temporary Foreign Workers
The reliance on temporary foreign workers varies significantly across industries. This variation is attributed to unique labor shortages and specific skill requirements in different sectors. The trend towards lower-paying sectors may reflect broader shifts in the labor market and the availability of domestic workers in these fields.
Stability vs. Expansion in Permit Holder Employment
While the number of permit holders under the temporary foreign worker program remained relatively stable, there has been a large expansion in the number of work and study permit holders employed in these sectors. The proportion of temporary foreign workers in the three low-paying sectors dropped from 23% to 14% from 2010 to 2019. In contrast, those under the international mobility program nearly tripled, with a slight increase in these sectors from 42% to 45% source: Statistics Canada Report, Yuqian Lu and Feng Hou.
Rise of Study Permit Holders in Employment
There has been a nine-fold increase in study permit holders reporting employment income, with a significant jump in those working in the three sectors — from 12% to 65%. This highlights a growing trend of international students seeking employment in Canada, often in lower-paying sectors source: Statistics Canada Report, Yuqian Lu and Feng Hou.
Impact on the Canadian Labor Market
The influx of temporary foreign workers in low-paying sectors raises questions about wage compression and job opportunities for domestic workers. This trend might impact the wage levels and working conditions in these sectors, potentially affecting the overall quality of jobs available to both domestic and foreign workers.
Policy Implications and Future Directions
This trend poses significant challenges for policymakers, who must balance the needs of employers, the aspirations of temporary foreign workers, and the rights of domestic labor. Future policy directions might include revising work permit regulations, focusing on skills training for domestic workers, and ensuring fair labor practices across all sectors.
The shift in employment patterns of temporary foreign workers towards lower-paying sectors in Canada is a complex phenomenon with wide-ranging implications. As Canada continues to navigate these changes, a multifaceted approach involving all stakeholders — government, industry, and labor groups — will be essential to address the challenges and opportunities presented by this trend.