Economic Insights
Temporary Foreign Workers in the Canadian Labour Force: Open Versus Employer-specific Work Permits

by Yuqian Lu and Feng Hou
Social Analysis and Modelling Division
11-626-X No. 102
Release date: November 18, 2019

This Economic Insights article compares the labour force participation of temporary foreign workers with open work permits and employer-specific work permits in terms of their level of labour market engagement in Canada, their distribution by province and industry, and the duration of temporary residence status and rate of transition to permanent residency.

Introduction

Temporary foreign workers (TFWs) have become an important source of labour supply in Canada. TFWs are primarily issued work permits under either the Temporary Foreign Worker Program (TFWP) or the International Mobility Program (IMP). The goal of the TFWP is to fill short-term labour shortages. TFWP participants hold an employer-specific work permit (ESWP), which restricts them to a specific employer who could not find suitable Canadian workers. The IMP aims to advance Canada’s broad economic and cultural interests (CIC 2014). The majority of IMP participants hold an open work permit (OWP), which allows them to work for any employer willing to hire them.

Job restrictions, or the lack thereof, can have large implications for TFWs and the Canadian labour market. TFWs with ESWPs are mostly recruited to fill existing job vacancies. The demand for their labour and skills has been, to a large extent, tracked and tested. In comparison, some OWP holders may not be able to find a job, and others may not intend to work. Simply counting the number of work permit holders cannot provide accurate information on the role of OWP and ESWP holders in the Canadian labour market.

This study compares the labour force participation of TFWs with OWPs and ESWPs in the following three aspects: (1) their level of labour market engagement, as measured by the percentage of TFWs with T4 earnings and, among those with earnings, their median annual earnings; (2) their distribution by province and industry; and (3) the duration of their temporary residence status and their rate of transition to permanent residency.

Data and method

This study uses data derived from Statistics Canada’s Canadian Employer–Employee Dynamics Database (CEEDD). The CEEDD is a data linkage environment with a set of linkable files at the individual, job and firm levels. For this study, foreign nationals from the Temporary Residents File, which contains all temporary resident permit holders and refugee claimants, are matched to their earnings from the T4 Statement of Remuneration Paid files and industry information from the National Accounts Longitudinal Microdata File. These linked data files allow for both cross-sectional and longitudinal (i.e., tracking individuals over time) analyses.

Temporary residents who received T4 earnings in Canada in a given year were counted as having worked in Canada. Canadian employers generally need to complete a T4 slip annually for each employee. Therefore, receiving T4 earnings is an indication of having participated in the labour market as a paid worker. Some work permit holders may have worked in Canada but were not issued a T4 slip; these individuals were not included in this study since they could not be identified in the current data.

In the Temporary Residents File, there is no direct identifier for OWPs. OWPs are identified based on the predominant work permit type for a specific TFW program. All TFWs under the TFWP hold ESWPs. Within the IMP, some streams exclusively issue OWPs (e.g., Post-Graduation Work Permit Program [PGWPP]), some exclusively issue ESWPs (e.g., intra-company transfers), and some streams may issue both OWPs and ESWPs (e.g., significant benefits and reciprocal employment). Immigration, Refugees and Citizenship Canada provides the relevant information for identification (details are available upon request). For IMP streams that issue both OWPs and ESWPs, work permits without an occupational skill level are treated as open.Note 1

Foreign nationals may receive multiple work permits over time, and some permits can have overlapping validity periods. In this study, OWP TFWs include individuals who hold one or more valid OWPs in a given year. Based on the size and streams, OWP holders can be disaggregated into seven categories: (1) International Experience Canada (IEC) workers; (2) PGWPP workers; (3) spouses or common-law partners of skilled workers or international students; (4) OWP holders who are waiting in Canada while their applications for permanent residence are being processed; (5) OWP holders for study purposes; (6) refugees, refugee claimants, protected persons or their family members (humanitarian and compassionate cases); and (7) other OWP holders.

TFWs with only ESWPs are divided into two groups: high-skill ESWPs and low-skill ESWPs.Note 2 For a clear comparison between OWP and ESWP TFWs, individuals who have both OWPs and ESWPs, have both high-skill and low-skill ESWPs, or have an ESWP but no specified skill level in a given year are treated as a separate group and are not included in the comparison. This group of TFWs accounted for 1.7% to 5.5% of total TFWs, depending on the year.

Recent trends in the number of open and employer-specific work permit holders

From 2001 to 2016, the number of foreign nationals who held a valid OWP increased from about 87,000 to 377,700. The increase was smaller among high-skill ESWP holders (from 106,700 to 135,900) and among low-skill ESWP holders (from 34,400 to 77,800) (Table 1). Among all TFWs, the share of TFWs with OWPs rose from 37% in 2001 to 62% in 2016. In comparison, the share of high-skill ESWP holders decreased from 46% to 22%. The share of low-skill ESWP holders increased from 15% in 2001 to 22% in 2008 (data not shown for 2008), then decreased to 13% in 2016.

The program composition of OWP holders also shifted considerably (Table 1). From 2001 to 2016, IEC was the largest program and accounted for 26% of total OWP holders. However, the humanitarian and compassionate category surpassed IEC from 2001 to 2009 and the PGWPP was larger than IEC in 2015 and 2016. Because of the rising number of international students coming to Canada and enhancements to the PGWPP, the number of PGWPP workers grew over 15 times, from 7,400 in 2005 to 117,700 in 2016.


Table 1
Number of temporary foreign workers by work permit type, 2001 to 2016
Table summary
This table displays the results of Number of temporary foreign workers by work permit type 2001, 2003, 2005, 2007, 2009, 2011, 2013, 2014, 2015 and 2016, calculated using number units of measure (appearing as column headers).
2001 2003 2005 2007 2009 2011 2013 2014 2015 2016
number
Total 232,600 255,400 294,300 375,300 496,700 560,600 649,700 644,500 602,800 613,200
OWP holders 87,000 124,700 145,700 176,900 244,200 309,500 363,600 358,000 342,400 377,700
Post-graduation work permit 2,400 3,400 7,400 11,500 24,300 43,600 69,000 82,500 91,700 117,700
International Experience Canada 19,200 26,000 39,400 49,000 69,400 90,500 93,800 86,700 85,600 90,800
For permanent residence purpose 16,900 18,600 16,800 14,300 14,500 21,500 17,600 19,400 27,500 35,000
For study purpose 3,900 4,900 8,400 28,100 36,300 54,200 75,600 68,000 56,200 57,600
Humanitarian and compassionate 40,500 60,400 56,600 51,700 71,200 65,900 55,300 46,100 30,200 25,700
Spouses of skilled workers/students 2,200 8,900 14,600 20,400 26,200 29,900 39,400 42,600 43,200 47,200
Other OWP programs 1,700 2,600 2,500 1,900 2,300 3,900 12,800 12,700 8,100 3,700
High-skill ESWP holders 106,700 86,600 93,700 112,400 130,800 137,100 158,300 157,400 146,500 135,900
Low-skill ESWP holders 34,400 39,800 49,000 74,800 105,000 86,900 92,000 99,300 90,700 77,800
Other typesTable 1 Note 1 4,500 4,300 5,900 11,200 16,700 27,100 35,800 29,800 23,200 21,800

Employment and T4 earnings in Canada

This section compares the labour force participation of OWP and ESWP holders by comparing their shares with T4 earnings and median earnings among workers who had T4 earnings.

Chart 1 presents the percentage of TFWs with T4 earnings among OWP and ESWP holders. The proportion of OWP holders with T4 earnings was higher than that of high-skill ESWP holders, but lower than that of low-skill ESWP holders. In 2001, 52% of OWP holders had T4 earnings, compared with 22% of high-skill ESWP holders and 65% of low-skill ESWP holders. Fifteen years later, the shares of work permit holders with T4 earnings in Canada among these three groups were 61%, 44% and 85%, respectively. High-skill ESWP holders had a larger share of workers without social insurance numbers (SINs) and without T4 earnings than other ESWP holders. It is possible that the high-skill ESWP holders without SINs or T4 earnings either did not actually work in Canada, or worked in Canada but were not issued a T4 (e.g., if they were paid by firm headquarters located outside Canada). The rapid growth in the share of workers with T4 earnings among high-skill ESWP holders from 2001 to 2008 was driven by workers with a level B occupation (i.e., technicians and skilled trades workers).

Data table for Chart 1 
Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016, calculated using percent units of measure (appearing as column headers).
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
percent
Open work permits 51.7 52.1 52.6 52.3 52.3 53.6 54.0 53.8 50.5 50.3 50.6 52.4 53.2 56.8 59.3 60.7
High-skill employer-specific work permits 21.8 24.9 30.6 32.4 33.7 36.8 42.1 46.4 44.8 43.4 45.1 47.8 49.9 47.8 45.4 43.5
Low-skill employer-specific work permits 65.1 66.4 70.7 73.7 73.8 76.0 78.7 80.5 82.8 82.3 84.1 84.9 84.4 84.3 84.2 84.5

Among TFWs with T4 earnings, OWP holders had the lowest median annual earnings (in 2016 constant dollars), which increased from $9,700 in 2001 to $16,200 in 2016. The median T4 earnings for low-skill ESWP holders increased from $12,400 to $19,000 over the same period (Chart 2). The sharp decline in median earnings during the early 2000s for high-skill ESWP holders echoed the increasing proportion of technicians and skilled trades workers. The median annual T4 earnings of high-skill ESWP holders increased slightly from $41,300 in 2008 to $47,300 in 2016. The differences in median annual earnings by work permit type and changes over time within each group could come from the combination of total working time in a given year and wage rates, which are not available in the data used in this study.

Data table for Chart 2 
Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016, calculated using 2016 constant dollars units of measure (appearing as column headers).
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2016 constant dollars
Open work permits 9,700 10,100 10,600 10,800 10,900 10,500 10,600 10,900 10,400 11,000 11,700 12,500 13,300 14,500 15,800 16,200
High-skill employer-specific work permits 52,100 54,500 53,000 50,900 48,200 45,900 42,300 41,300 44,200 44,000 44,400 44,700 46,200 46,600 47,500 47,300
Low-skill employer-specific work permits 12,400 13,000 13,600 13,700 14,400 15,200 15,100 16,600 18,900 19,500 18,700 18,600 19,200 20,100 20,100 19,000

Table 2 presents the shares of TFWs in total T4 earners and total T4 earnings in Canada by province in 2006 and 2016. These shares are used here as proxy measures of TFWs’ relative importance in the labour market. In 2016, OWP holders accounted for 1.2% of total T4 earners in Canada, up from 0.5% in 2006. These shares were higher than the corresponding shares of high-skill and low-skill ESWP holders. Because of their low average annual T4 earnings, OWP holders’ share in the total T4 earnings was much smaller than their share in the total T4 earners. OWP and high-skill ESWP holders had similar shares in the total T4 earnings, and their shares were higher than that of low-skill ESWP holders.

Across regions, British Columbia used relatively more OWP and ESWP TFWs than the national average. In British Columbia in 2016, OWP holders accounted for 2.2% of the total T4 earners and 0.9% of the total T4 earnings, while the shares for the two ESWP groups combined were 0.8% and 0.9%, respectively.

The shares of OWP and ESWP holders in the total T4 earners in Ontario and Alberta were close to or slightly higher than the national average. Quebec, Manitoba, Saskatchewan, the Atlantic region, and the three territories combined used proportionately fewer TFWs than the national average.


Table 2
Shares of temporary foreign workers in total T4 earners and total T4 earnings by province and three territories combined, 2006 and 2016
Table summary
This table displays the results of Shares of temporary foreign workers in total T4 earners and total T4 earnings by province and three territories combined In total T4 earners, In total T4 earnings, OWP holders, High-skill ESWP holders and Low-skill ESWP holders, calculated using percent units of measure (appearing as column headers).
In total T4 earners In total T4 earnings
OWP holders High-skill ESWP holders Low-skill ESWP holders OWP holders High-skill ESWP holders Low-skill ESWP holders
percent
Canada
2006 0.5 0.2 0.3 0.1 0.4 0.1
2016 1.2 0.3 0.3 0.6 0.6 0.1
Newfoundland and Labrador
2006 0.1 0.1 0.0 0.0 0.5 0.0
2016 0.4 0.4 0.1 0.2 1.4 0.0
Prince Edward Island
2006 0.1 0.1 0.1 0.0 0.1 0.1
2016 0.5 0.1 0.9 0.3 0.3 0.5
Nova Scotia
2006 0.2 0.1 0.1 0.1 0.2 0.0
2016 0.7 0.2 0.3 0.4 0.3 0.1
New Brunswick
2006 0.2 0.1 0.0 0.1 0.1 0.0
2016 0.4 0.1 0.3 0.2 0.1 0.2
Quebec
2006 0.3 0.1 0.1 0.1 0.3 0.0
2016 0.7 0.3 0.3 0.3 0.5 0.1
Ontario
2006 0.6 0.2 0.4 0.2 0.5 0.1
2016 1.3 0.3 0.4 0.6 0.7 0.1
Manitoba
2006 0.2 0.1 0.2 0.1 0.2 0.1
2016 0.9 0.2 0.2 0.5 0.4 0.1
Saskatchewan
2006 0.2 0.1 0.1 0.1 0.2 0.0
2016 0.8 0.4 0.2 0.4 0.4 0.1
Alberta
2006 0.5 0.3 0.3 0.1 0.5 0.1
2016 1.3 0.4 0.4 0.6 0.7 0.2
British Columbia
2006 0.8 0.3 0.3 0.2 0.5 0.1
2016 2.2 0.4 0.4 0.9 0.7 0.2
Territories
2006 0.3 0.3 0.1 0.1 0.5 0.0
2016 0.8 0.1 0.2 0.4 0.2 0.1

Table 3 presents the shares of TFWs in total T4 earners and total T4 earnings in the top 12 industrial sectors that hired the most TFWs. OWP holders were overrepresented in five sectors: accommodation and food services; professional, scientific and technical services; administrative and support, waste management and remediation services; arts, entertainment and recreation; and retail trade. In particular, OWP holders accounted for 3.4% of the total T4 earners and 2.6% of total T4 earnings in accommodation and food services in 2016. High-skill ESWP holders were overrepresented in professional, scientific and technical services, and in arts, entertainment and recreation. In comparison, low-skill ESWP holders were overrepresented in agriculture, forestry, fishing and hunting. In 2016, low-skill ESWP holders accounted for 12.8% of total T4 earners and 8.5% of T4 earnings in agriculture, forestry, fishing and hunting.


Table 3
Shares of temporary foreign workers in total T4 earners and total T4 earnings in the top 12 industrial sectors that hired the most temporary foreign workers, 2006 and 2016
Table summary
This table displays the results of Shares of temporary foreign workers in total T4 earners and total T4 earnings in the top 12 industrial sectors that hired the most temporary foreign workers. The information is grouped by Industry sector (NAICS code) (appearing as row headers), In total T4 earners, In total T4 earnings, OWP holders, High-skill ESWP holders and Low-skill ESWP holders, calculated using percent units of measure (appearing as column headers).
Industry sector (NAICS code) In total T4 earners In total T4 earnings
OWP holders High-skill ESWP holders Low-skill ESWP holders OWP holders High-skill ESWP holders Low-skill ESWP holders
percent
Agriculture, forestry, fishing and hunting (NAICS 11)
2006 0.3 0.2 5.6 0.1 0.2 2.6
2016 0.5 0.3 12.8 0.3 0.4 8.5
Construction (NAICS 23)
2006 0.3 0.3 0.1 0.1 0.3 0.0
2016 0.7 0.3 0.0 0.4 0.5 0.0
Manufacturing (NAICS 31, 32, 33)
2006 0.4 0.2 0.1 0.2 0.5 0.0
2016 0.9 0.3 0.2 0.4 0.8 0.1
Wholesale trade (NAICS 41)
2006 0.5 0.3 0.1 0.1 0.5 0.0
2016 0.9 0.3 0.1 0.5 0.9 0.1
Retail trade (NAICS 44, 45)
2006 0.5 0.0 0.0 0.2 0.1 0.0
2016 1.3 0.1 0.1 0.8 0.3 0.1
Professional, scientific and technical services (NAICS 54)
2006 0.5 0.8 0.1 0.2 0.8 0.0
2016 1.8 1.3 0.1 0.9 1.6 0.0
Administrative and support, waste management and remediation services (NAICS 56)
2006 1.3 0.1 0.1 0.5 0.3 0.0
2016 2.7 0.2 0.1 1.4 0.5 0.1
Educational services (NAICS 61)
2006 0.5 0.5 0.0 0.1 0.4 0.0
2016 0.9 0.4 0.0 0.3 0.4 0.0
Health care and social assistance (NAICS 62)
2006 0.2 0.2 0.1 0.1 0.2 0.0
2016 0.6 0.1 0.0 0.4 0.2 0.0
Arts, entertainment and recreation (NAICS 71)
2006 1.2 0.6 0.1 0.4 3.2 0.0
2016 2.3 0.6 0.1 1.0 4.7 0.1
Accommodation and food services (NAICS 72)
2006 1.2 0.2 0.1 0.6 0.3 0.1
2016 3.4 0.4 0.2 2.6 0.6 0.3
Other services (NAICS 81)
2006 0.5 0.1 2.2 0.2 0.2 0.9
2016 1.0 0.3 0.2 0.6 0.5 0.1

Duration of work permits and transition

This section examines the yearly residency status of new work permit holders by year since they obtained their first work permit. Three types of valid residence status are identified: remaining in the same work permit type, having other residence status (either other work permit program, study or other Canadian residence status) and gaining permanent residence status. The analysis follows individuals longitudinally from the year their first work permit was signed until they no longer held valid residence status in Canada. New OWP holders are defined as those who had no other work permits issued before their initial OWP. Similarly, new ESWP holders are defined as those who had no other work permits issued before their initial ESWP.

Table 4 compares OWP holders with high-skill and low-skill ESWP holders in terms of work permit duration and transition into permanent residence status. To simplify the table, only two arrival cohorts (those who arrived in 2006 and 2011) are presented for each group.

OWP holders tended to maintain valid residence status in Canada for longer than high-skill ESWP holders, but for less time than low-skill ESWP holders. About one-half of OWP holders still had valid residence status five years after obtaining their first work permit. In comparison, only about one-quarter of high-skill ESWP holders and two-thirds of low-skill ESWP holders still had valid residence status five years after their first permit was issued.

Over one-half of OWP holders still held OWPs one year after their initial permit was issued, but this percentage declined sharply afterward and, by the fifth year after the initial permit was issued, was below 10%. Almost 30% of OWP holders held other temporary residence permits one year after their initial OWP was issued. This share steadily decreased afterward. About 40% of the 2006 arrival cohort of OWP holders gained permanent residence status by the 5th year after their initial permit was issued, and this rate rose to 47% by the 10th year. Compared with the 2006 cohort, the 2011 OWP arrival cohort stayed in the OWP programs for longer and were more likely to hold other types of temporary resident permits in Canada by the fifth year after their initial permit was issued.

Relative to OWP holders, high-skill ESWP holders rarely switched to other temporary residence permits, and their rate of transition to permanent residence status was much lower. In comparison, most low-skill ESWP holders stayed in the low-skill category for their initial two years, and then their shares declined rapidly. For both arrival cohorts, more than 40% of low-skill ESWP holders gained permanent residence status by the 5th year, and 51% of the 2006 cohort became permanent residents by the 10th year.

These results are consistent with the findings from previous studies that suggested that opportunities and motivations jointly influence the likelihood of TFWs transitioning to permanent residence status in Canada (Lu and Hou 2017; Prokopenko and Hou 2018). High-skill TFWs have more pathways to apply for permanent residence status in Canada, but they are highly sought after internationally, and many may not have strong motivations to seek permanent residence in Canada. In comparison, low-skill TFWs have fewer pathways to permanent residence status, but many of them still find ways to become landed immigrants.


Table 4
Residence status of new work permit holders by year since the initial work permit type, 2006 and 2011 arrival cohorts
Table summary
This table displays the results of Residence status of new work permit holders by year since the initial work permit type Year after initial work permit, 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10, calculated using percent units of measure (appearing as column headers).
YearTable 4 Note 1 after initial work permit
1 2 3 4 5 6 7 8 9 10
percent
OWP holders
2006 arrival cohort
Only had OWP 55.1 16.0 10.7 8.4 6.2 3.9 2.4 1.6 1.1 0.8
Had other types of temporary residence status 29.4 23.7 15.6 9.4 5.6 3.6 2.3 1.6 1.1 0.7
Received permanent residence status 11.7 22.6 31.4 36.7 40.0 42.9 44.7 46.0 46.8 47.4
No valid residence status in Canada 3.8 37.7 42.3 45.5 48.2 49.6 50.5 50.9 51.0 51.1
2011 arrival cohort
Only had OWP 59.9 29.8 19.9 12.7 8.5 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Had other types of temporary residence status 30.9 25.3 16.8 10.6 7.2 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Received permanent residence status 3.8 11.2 21.5 28.8 33.9 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
No valid residence status in Canada 5.5 33.7 41.7 48.0 50.4 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
High-skill ESWP holders
2006 arrival cohort
Only had high-skill ESWP 59.2 31.8 20.0 12.2 8.6 6.2 4.6 3.3 2.5 1.8
Had other types of temporary residence status 2.6 2.6 2.1 1.7 1.4 1.1 1.0 0.8 0.6 0.4
Received permanent residence status 2.6 7.2 11.7 14.5 16.0 17.4 18.2 19.0 19.5 19.8
No valid residence status in Canada 35.5 58.4 66.2 71.5 74.0 75.2 76.1 76.9 77.4 78.0
2011 arrival cohort
Only had high-skill ESWP 67.5 39.9 24.5 12.9 8.0 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Had other types of temporary residence status 2.4 3.3 3.0 2.1 1.6 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Received permanent residence status 1.6 4.8 10.9 14.4 16.6 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
No valid residence status in Canada 28.6 52.0 61.6 70.6 73.9 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Low-skill ESWP holders
2006 arrival cohort
Only had low-skill ESWP 79.7 60.5 26.1 17.3 14.9 13.7 12.7 12.3 11.3 10.2
Had other types of temporary residence status 3.5 8.8 25.7 14.5 11.3 6.2 4.5 3.0 1.9 1.2
Received permanent residence status 0.9 4.1 18.0 35.7 40.2 45.6 47.3 48.9 50.0 50.7
No valid residence status in Canada 16.0 26.6 30.2 32.5 33.6 34.5 35.5 35.8 36.8 37.9
2011 arrival cohort
Only had low-skill ESWP 81.1 53.9 29.7 18.5 11.4 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Had other types of temporary residence status 5.3 20.4 26.5 16.7 10.7 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
Received permanent residence status 0.5 4.3 18.5 35.5 43.4 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable
No valid residence status in Canada 13.0 21.4 25.4 29.2 34.5 Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable Note ...: not applicable

Summary

Temporary foreign workers (TFWs) in Canada are differentiated by the job restrictions of their work permits. TFWs with employer-specific work permits (ESWPs) can work only in a designated firm or occupation, while TFWs with open work permits (OWPs) can work for any employer. From 2001 to 2016, the number of TFWs with an OWP increased from 87,000 to 377,700. The number of high-skill ESWP holders increased from 106,700 to 135,900, while the number of low-skill ESWP holders increased from 34,400 to 77,800. OWP holders accounted for 76% of the increase in the total number of TFWs over the 15-year period, and their share among all TFWs also rose from 37% to 62%.

The proportion of OWP holders with T4 earnings tended to be higher than that of high-skill ESWP holders, but lower than that of low-skill ESWP holders. In 2016, 61% of OWP holders had T4 earnings, compared with 44% of high-skill ESWP holders and 85% of low-skill ESWP holders. Among TFWs with T4 earnings, OWP holders had lower median annual earnings than both low-skill and high-skill ESWP holders.

As a proxy measure of their role in the total labour supply, OWP holders accounted for 1.2% of total T4 earners in Canada in 2016, compared with 0.3% for high-skill ESWP holders and 0.3% for low-skill ESWP holders. Because of their low average annual T4 earnings, OWP holders had a similar share in the total T4 earnings compared with high-skill ESWP holders (about 0.6% each), while low-skill ESWP holders had the lowest share, at about 0.1%.

The three types of TFWs were concentrated in different industrial sectors. High-skill ESWP holders were overrepresented in professional, scientific and technical services, and in arts, entertainment and recreation. Low-skill ESWP holders were overrepresented in agriculture, forestry, fishing and hunting. In comparison, the industrial distribution of OWP holders was more diverse. On one hand, they were overrepresented in sectors where young and less-educated Canadian workers are highly concentrated, such as accommodation and food services; administrative and support, waste management and remediation services; and retail trade. On the other hand, they were also overrepresented in professional, scientific and technical services—the segment of the labour market where university-educated Canadian workers are relatively concentrated.

In terms of their transition pathways in Canada, low-skill ESWP holders tended to maintain valid residence status in Canada longer than high-skill ESWP holders and OWP holders. In particular, low-skill ESWP holders had the highest rate of transition to permanent residence status, followed by OWP holders.

References

CIC (Citizenship and Immigration Canada). 2014. Canada Facts and Figures: Immigrant Overview: Temporary Residents 2013. Ottawa: Citizenship and Immigration Canada. Available at: http://publications.gc.ca/collections/collection_2015/cic/Ci1-8-10-2013-eng.pdf (accessed August 13, 2019).

Lu, Y., and F. Hou. 2017. Transition from Temporary Foreign Workers to Permanent Residents, 1990 to 2014. Analytical Studies Branch Research Paper Series, no. 389. Statistics Canada Catalogue no. 11F0019M. Ottawa: Statistics Canada.

Prokopenko, E., and F. Hou. 2018. “How temporary were Canada’s temporary foreign workers?” Population and Development Review 44 (2): 257–280.


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