DOI: https://doi.org/10.25318/36280001202301000003-eng
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Abstract
As the role of temporary foreign workers in Canada’s labour market has grown in significance, it has become essential to accurately measure their numbers for informing policy decisions related to the effectiveness and impact of various foreign worker programs. Two primary data sources have been used to determine the number of temporary foreign workers: data on work permit holders released by Immigration, Refugees and Citizenship Canada and data based on tax administrative files that identify temporary residents with earnings. This article aims to evaluate the benefits and limitations of these two data sources and compare the trends in the number of temporary foreign workers derived from them.
Keywords: temporary foreign workers, work permit, study permit
Authors
Yuqian Lu and Feng Hou are with the Social Analysis and Modelling Division, Analytical Studies and Modelling Branch, at Statistics Canada.
Acknowledgments
The authors would like to thank Julien Bérard-Chagnon, Martin Lemire, Mélanie Meunier, René Morissette, François Nault and Li Xue for their advice and comments on an earlier version of this paper.
Temporary foreign workersNote have become an increasingly important source of labour supply in Canada. To track the impact of temporary foreign workers on the Canadian labour market and to inform policy decisions regarding the effectiveness and sustainability of various foreign worker programs, it is crucial to accurately measure the number of temporary foreign workers in Canada. However, estimating temporary foreign workers is not straightforward because of their complexity and transient status. The two most used data sources for estimating temporary foreign workers are statistics on work permit holders released by Immigration, Refugees and Citizenship Canada (IRCC) and statistics on temporary residents with earnings based on tax administrative files (e.g., Lu, 2020). This article discusses the advantages and limitations of these two data sources and compares the trends in the number of temporary foreign workers revealed by the two sources.
Work permit holders
IRCC publishes data on the number of work permit holders by year and month in which the permit became effective and by December 31 of each year. These permit holders fall under two categories: the Temporary Foreign Worker Program (TFWP) and the International Mobility Program (IMP). The TFWP enables Canadian employers who have obtained a Labour Market Impact Assessment to recruit foreign workers to fill temporary job vacancies for which there are no suitable Canadian citizens or permanent residents available. The IMP seeks to attract foreign workers who can offer significant economic, social or cultural benefits to Canada; improve the country’s competitiveness; or meet its bilateral or multilateral trade agreements. IMP work permit holders can be further classified based on their primary objective in Canada, namely work, study, humanitarian and compassionate (H&C), or permanent residency (PR) purposes.Note
The number of work permit holders by effective year indicates the inflow of new work permit holders in a particular year. Given that work permit durations vary from a few months to a few years, some permit holders may leave Canada within the same year, while others may remain for several years. Consequently, the flow statistics do not reflect the total number of work permit holders present throughout the year.
Aside from the inflow measure, IRCC also publishes a stock measure, which is the number of valid work permit holders on December 31 of each year. However, the December 31 figure is typically lower than the number of valid work permit holders in earlier months, since work permits are more likely to expire toward the end of the year. For example, in 2019, there were around 675,000 valid work permit holders (for work purposes only) on January 31 and 632,000 on June 30, compared with 512,000 on December 31.Note To estimate the total number of individuals who held a valid work permit during a year, the Non-permanent Resident File (NPRF) is used to derive a third measure: the number of valid permit holders at any time in a calendar year, which counts unique persons who ever held a valid work permit any time during a year.Note
Table 1 presents the number of work permit holders under the TFWP and IMP for work purposes from 2010 to 2022, based on the three measures described above. The person counts of work permit holders with a valid work permit any time in a calendar year were significantly higher than the corresponding number on December 31, although the gap between the two sets of figures has decreased over time. For example, in 2015, the number of TFWP permit holders at any time during the year was 140% higher than the December 31 figure, but the gap continuously decreased, down to 49% in 2021. Over the same period, the corresponding difference for IMP permit holders for work purposes decreased from 38% to 20%. This reduction in the gaps is likely attributable to the prolonged average duration of work permits, resulting in fewer permits expiring within the year of issue.
In addition to IMP work permits for work purposes, work permit holders under the IMP for other purposes (i.e., study, H&C or PR) also form a growing part of all work permit holders in Canada. In 2021, they accounted for 30% of all work permit holders in the year, compared with 19% in 2015. In particular, the number of work permit holders for study purposes (mostly postsecondary co-op or internship) surpassed the number of TFWP work permit holders for the first time in 2021 (see Chart 1).
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| counts | |||||||||||||
| New issuesTable 1 Note 1 | |||||||||||||
| Temporary Foreign Worker Program | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | 72,965 | 78,450 | 78,470 | 84,000 | 98,030 | 84,105 | 103,340 | 136,350 |
| International Mobility Program for work purposes | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | Note ..: not available for a specific reference period | 176,280 | 207,565 | 222,720 | 253,365 | 303,545 | 240,515 | 310,660 | 472,070 |
| Valid work permit holders on December 31Table 1 Note 1 | |||||||||||||
| Temporary Foreign Worker Program | 92,090 | 81,530 | 86,510 | 103,910 | 93,750 | 60,000 | 51,070 | 46,055 | 56,030 | 73,360 | 76,405 | 81,495 | 119,825 |
| International Mobility Program for work purposes | 158,855 | 187,175 | 208,655 | 235,860 | 257,545 | 251,015 | 288,220 | 321,065 | 369,825 | 439,095 | 452,625 | 438,315 | 677,400 |
| With a valid work permit any time in calendar yearTable 1 Note 2 | |||||||||||||
| Temporary Foreign Worker Program | 174,900 | 160,100 | 164,800 | 176,000 | 169,600 | 143,700 | 117,900 | 108,200 | 114,400 | 133,600 | 136,300 | 145,800 | Note ..: not available for a specific reference period |
| International Mobility Program for work purposes | 225,700 | 257,600 | 292,300 | 325,400 | 342,600 | 347,400 | 379,100 | 422,600 | 481,700 | 563,900 | 580,400 | 526,300 | Note ..: not available for a specific reference period |
.. not available for a specific reference period
Sources: Statistics Canada, Non-permanent Resident File; and Government of Canada, Open Government Portal. |
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Data table for Chart 1
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| person count | ||||||||||||
| Temporary Foreign Worker Program | 174,900 | 160,100 | 164,800 | 176,000 | 169,600 | 143,700 | 117,900 | 108,200 | 114,400 | 133,600 | 136,300 | 145,800 |
| International Mobility Program for work purposes | 225,700 | 257,600 | 292,300 | 325,400 | 342,600 | 347,400 | 379,100 | 422,600 | 481,700 | 563,900 | 580,400 | 526,300 |
| International Mobility Program for study purposes | 44,000 | 55,000 | 64,900 | 76,200 | 68,400 | 56,500 | 57,700 | 77,500 | 103,500 | 133,100 | 132,700 | 169,100 |
| International Mobility Program for humanitarian and compassionate purposes | 75,800 | 71,900 | 65,200 | 57,400 | 49,500 | 33,500 | 27,700 | 47,500 | 75,000 | 107,800 | 113,200 | 100,600 |
| International Mobility Program for permanent residency purposes | 11,400 | 15,800 | 15,700 | 14,700 | 14,600 | 21,900 | 30,900 | 30,000 | 23,900 | 23,500 | 29,000 | 21,600 |
|
Note: The numbers of work permit holders any time in a year are rounded to the nearest 100. Source: Statistics Canada, Non-permanent Resident File. |
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One major advantage of the work permit data is their ability to provide monthly updates on work permit holders. Nevertheless, the number of work permit holders does not indicate how many were actively engaged in the labour market. Some may not have worked in Canada,Note while some temporary residents with other statusNote are allowed to participate and have participated in the labour force.
Employment income records
To determine the number of employed temporary residents in the labour force, the NPRF can be matched with income tax-based administrative files. Temporary residentsNote with annual T4 earnings or self-employment income are identified as temporary foreign workers who were employed at some point during the year.Note The results are presented in Table 2.
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| counts | |||||||||||
| With T4 earnings or self-employment income | 357,000 | 375,600 | 411,600 | 446,100 | 476,000 | 491,300 | 525,300 | 608,600 | 733,200 | 877,500 | 890,200 |
| Work permit holders | 318,100 | 334,900 | 369,800 | 404,000 | 411,800 | 389,800 | 404,200 | 453,600 | 539,800 | 657,300 | 703,800 |
| Temporary Foreign Worker Program | 133,200 | 124,500 | 133,000 | 144,100 | 139,900 | 116,800 | 98,600 | 94,600 | 100,000 | 115,500 | 117,000 |
| International Mobility Program for work purposes | 113,400 | 132,800 | 157,000 | 182,700 | 200,400 | 210,000 | 237,500 | 270,300 | 315,700 | 379,200 | 407,700 |
| Post-Graduation Work Permit Program | 23,300 | 30,800 | 40,000 | 51,800 | 63,400 | 70,800 | 93,000 | 105,300 | 129,700 | 168,500 | 226,000 |
| International Mobility Program for study purposes | 23,400 | 28,700 | 33,500 | 37,700 | 37,800 | 31,900 | 32,800 | 46,200 | 65,100 | 81,800 | 82,400 |
| International Mobility Program for humanitarian and compassionate purposes | 40,200 | 37,300 | 35,500 | 30,000 | 24,700 | 18,000 | 15,800 | 24,300 | 44,900 | 66,400 | 77,400 |
| International Mobility Program for permanent residency purposes | 7,900 | 11,600 | 10,800 | 9,600 | 9,000 | 13,100 | 19,500 | 18,300 | 14,100 | 14,300 | 19,300 |
| Study permit holders | 18,100 | 18,300 | 18,900 | 19,700 | 40,500 | 74,500 | 95,500 | 129,500 | 164,900 | 188,000 | 153,000 |
| Other temporary residents | 20,700 | 22,400 | 22,900 | 22,400 | 23,700 | 26,900 | 25,600 | 25,600 | 28,500 | 32,100 | 33,400 |
| With T4 earnings | 347,300 | 365,100 | 401,100 | 435,300 | 464,800 | 479,600 | 512,900 | 594,100 | 715,500 | 851,700 | 860,900 |
| Work permit holders | 311,100 | 327,100 | 362,000 | 395,700 | 403,400 | 381,700 | 395,600 | 443,500 | 527,400 | 639,500 | 682,500 |
| Temporary Foreign Worker Program | 132,000 | 123,400 | 132,000 | 143,000 | 138,900 | 116,000 | 98,100 | 94,200 | 99,700 | 115,200 | 116,600 |
| International Mobility Program for work purposes | 111,200 | 130,000 | 153,900 | 179,100 | 196,500 | 206,000 | 233,000 | 265,000 | 309,800 | 371,600 | 399,000 |
| Post-Graduation Work Permit Program | 22,900 | 30,200 | 39,400 | 51,200 | 62,500 | 69,800 | 91,800 | 103,800 | 128,200 | 166,200 | 222,800 |
| International Mobility Program for study purposes | 23,300 | 28,400 | 33,100 | 37,300 | 37,400 | 31,600 | 32,500 | 45,700 | 64,200 | 80,300 | 80,400 |
| International Mobility Program for humanitarian and compassionate purposes | 37,400 | 34,400 | 32,900 | 27,500 | 22,300 | 16,200 | 14,100 | 21,800 | 40,600 | 59,400 | 68,800 |
| International Mobility Program for permanent residency purposes | 7,300 | 10,800 | 10,000 | 8,800 | 8,200 | 11,900 | 18,000 | 16,800 | 13,000 | 12,900 | 17,600 |
| Study permit holders | 18,000 | 18,200 | 18,700 | 19,600 | 40,100 | 73,700 | 94,200 | 127,600 | 162,500 | 183,500 | 148,400 |
| Other temporary residents | 18,200 | 19,700 | 20,400 | 20,000 | 21,300 | 24,300 | 23,100 | 23,000 | 25,700 | 28,700 | 30,000 |
| Without T4 earnings but with self-employment income | 9,700 | 10,500 | 10,500 | 10,800 | 11,200 | 11,600 | 12,400 | 14,600 | 17,600 | 25,800 | 29,300 |
| Work permit holders | 7,000 | 7,800 | 7,900 | 8,400 | 8,400 | 8,100 | 8,600 | 10,200 | 12,400 | 17,800 | 21,400 |
| Temporary Foreign Worker Program | 1,200 | 1,100 | 1,100 | 1,100 | 1,000 | 800 | 500 | 400 | 300 | 300 | 400 |
| International Mobility Program for work purposes | 2,100 | 2,700 | 3,000 | 3,500 | 3,800 | 4,000 | 4,500 | 5,300 | 5,800 | 7,600 | 8,800 |
| Post-Graduation Work Permit Program | 400 | 500 | 600 | 700 | 800 | 1,000 | 1,300 | 1,500 | 1,600 | 2,300 | 3,200 |
| International Mobility Program for study purposes | 200 | 300 | 300 | 400 | 400 | 300 | 400 | 500 | 800 | 1,500 | 2,000 |
| International Mobility Program for humanitarian and compassionate purposes | 2,800 | 2,900 | 2,600 | 2,500 | 2,300 | 1,800 | 1,700 | 2,500 | 4,300 | 7,000 | 8,600 |
| International Mobility Program for permanent residency purposes | 700 | 800 | 800 | 800 | 800 | 1,200 | 1,500 | 1,400 | 1,100 | 1,400 | 1,600 |
| Study permit holders | 100 | 100 | 100 | 100 | 500 | 900 | 1,300 | 1,800 | 2,400 | 4,600 | 4,600 |
| Other temporary residents | 2,500 | 2,600 | 2,500 | 2,300 | 2,400 | 2,600 | 2,500 | 2,600 | 2,800 | 3,400 | 3,400 |
|
Notes: Numbers are rounded to the nearest 100. As a result of rounding, the sum of subcategories may not equal to the total. Sources: Statistics Canada, Non-permanent Resident File and Longitudinal Worker File. |
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Comparing the number of valid work permit holders in a year (bottom panel of Table 1) with the number of work permit holders who earned employment income (top panel of Table 2) reveals that the employed share of TFWP permit holders rose from 76% in 2010 to 86% in 2020. Among IMP work permit holders for work purposes, the employed share increased from 50% in 2010 to 70% in 2020.
Table 2 also indicates a significant rise in the number of employed non-work permit holders over the 2010-to-2020 period. Specifically, the number of employed study permit holdersNote (excluding those holding a work permit in the same year) increased from 18,100 in 2010 to 188,000 in 2019, before declining to 153,000 in 2020 because of the COVID-19 pandemic’s impact on international students’ arrival to Canada. Additionally, the proportion of employed study permit holders among employed temporary foreign workers surged from 5% in 2010 to 21% in 2019.
The number of employed temporary residents grew 149% from 2010 to 2020. The majority (74%) of the growth was attributable to current and former international students, including Post-Graduation Work Permit (PGWP) holders, work permit holders for study purposes and study permit holders.Note By comparison, over the same period, the number of valid work permit holders for work purposes on December 31 increased 108% and the number of valid work permit holders for work purposes any time in a year increased 78% (based on statistics in Table 1). Therefore, the number of employed temporary residents has grown much faster than the number of work permit holders for work purposes.
In 2020, the total number of employed temporary residents accounted for 4.2% of all individuals reporting annual employment income (include self-employment income) in Canada, compared with 1.9% in 2010.
Table 2 also shows that only a small share (3% in 2020) of employed temporary residents were solely engaged in self-employment, although their number tripled from 2010 to 2020. Previous studies on employed temporary residents only considered paid employees (i.e., with T4 earnings) (e.g., Lu, 2020; Lu & Hou, 2019). The statistics in this article suggest that self-employment is an emerging phenomenon among temporary residents and should be included in counting temporary residents with employment income.
Finally, 2019 statistics are used as an example to illustrate the intersection between the number of work permit holders and the number of temporary residents with income (both employment and self-employment income) (Figure 1). Overall, there were 697,500 work permit holders for work purposes in 2019 (the sum of TFWP permit holders and IMP permit holders for work purposes in Table 1), of whom 494,700 (or 71%) had employment income in Canada. There were 264,400 work permit holders for other purposes (e.g., study and H&C), of whom 162,500 (or 61%) had employment income. In the same year, about 877,500 temporary residents had employment income in Canada, including 494,700 work permit holders for work purposes (56%), 162,500 work permit holders for non-work purposes (19%) and 220,100 temporary residents with other residency status (25%).
Description for Figure 1
Figure 1 illustrates the intersection between the number of work permit holders and the number of temporary residents with income. There were 697,500 work permit holders for work purposes in 2019, of whom 494,700 (or 71%) had employment income in Canada. There were 264,400 work permit holders for other purposes, of whom 162,500 (or 61%) had employment income. In the same year, about 877,500 temporary residents had employment income in Canada, including 494,700 work permit holders for work purposes (56%), 162,500 work permit holders for non-work purposes (19%) and 220,100 temporary residents with other residency status (25%).
In summary, IRCC’s statistics on work permit holders provide up-to-date information on the inflow and stock of foreign nationals coming to Canada primarily for work purposes. However, as some work permit holders probably did not work in Canada in a given year, and many other eligible temporary residents are not required to have a work permit to participate in the labour force, the number of employed temporary residents derived from tax records provides another important measure of the role of temporary foreign workers in the national labour force. One major limitation of the statistics on employed temporary residents is that they are usually two years out of date. In the absence of a better data source, to produce more updated estimates of employed temporary foreign workers, labour force participation rates of work permit and non-work permit holders, based on employment income records, can be applied to IRCC’s monthly and yearly temporary resident records.
Data and definitions
The Government of Canada’s Open Government Portal provides data on the number of permit holders by effective year and by December 31 of each year.Note The number of work permit holders at any time in a year was obtained from the NPRF, which contains information on all temporary residents who have received a temporary permit (excluding visitor permits) to enter Canada since 1980. The number of employed temporary residents presented in Table 2 was derived from linking the NPRF with the Longitudinal Worker File, which has individual records from the T1 and T4 administrative files and is updated up to 2020.
This article counts each temporary foreign resident only once per calendar year. In determining the yearly permit type for individuals with multiple types of permits in a year, this analysis prioritizes the TFWP, followed by the IMP for work purposes, the IMP for study purposes, the IMP for H&C purposes, the IMP for PR purposes, study permits and other permits.
References
Crossman, C., Choi, Y., & Hou, F. (2021). International students as a source of labour supply: Engagement in the labour market during the period of study. Economic and Social Reports 1(11): 1–12.
Government of Canada. (n.d.) General information: Work without a permit – International Mobility Program - Canada.ca. Accessed March 28, 2023.
Kachulis, E., & Perez-Leclerc, M. (2020). Temporary Foreign Workers in Canada. Library of Parliament Publication no. 2019-36-E. Accessed March 18, 2023.
Lu, Y. (2020). The distribution of temporary foreign workers across industries in Canada.
Lu, Y. & Hou. F. (2019). Temporary Foreign Workers in the Canadian Labour Force: Open Versus Employer-specific Work Permits (statcan.gc.ca). Statistics Canada: Economic Insights, no. 102.
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