DOI: https://doi.org/10.25318/36280001202301000004-eng
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Canada has a long history of recruiting foreign nationals to address temporary labour shortages through a diverse range of work permit programs. In the past decade, along with a significant increase in the number of work permit holders, there have been large changes in the composition of this population in terms of work permit programs and demographic characteristics. Each work permit program is governed by unique legal and regulatory frameworks and faces distinct challenges related to residency status, access to social services and the possibility of transitioning to permanent residency. Additionally, these programs involve varying degrees of job availability, work engagement and concentration in different industrial sectors.
This article aims to examine recent changes in the composition of work permit programs and the proportion of work permit holders reporting employment income. This analysis can improve the understanding of the evolving complexities of work permit programs and their economic, social and policy implications.
Changing composition of work permit holders
Foreign nationals can obtain work permits to work in Canada through two programs: the Temporary Foreign Worker Program (TFWP) and the International Mobility Program (IMP). The TFWP requires employers to secure a positive Labour Market Impact Assessment (LMIA) before hiring a foreign worker to fill a job that cannot be filled by a Canadian worker. The IMP is exempt from the LMIA requirement and is designed to serve broad Canadian interests and fulfill Canada’s international agreements.Note
From 2010 to 2021,Note the total number of work permit holders in Canada increased by 81%, rising from 531,700 to 963,400. This growth was primarily driven by the IMP for work and study purposes. The share of IMP work permit holders for work purposes increased from 42% to 55% in 2021, and the share of IMP permit holders for study purposes more than doubled from 8% to 18% (Table 1). The share for humanitarian and compassionate reasons fluctuated from 5% to 14%, reflecting the inflows of asylum seekers in Canada.
In contrast, the share of TFWP permit holders among total work permit holders decreased by more than half, from 33% to 15%. Within the TFWP, live-in caregiver programs, higher-skilled temporary foreign workers and lower-skilled temporary foreign workers all experienced a considerable decline in their share of work permit holders. However, the agricultural streams, including the Seasonal Agricultural Worker Program, have maintained a steady share, ranging from 6% to 8%, as their absolute number more than doubled between 2010 and 2021.
The fastest-growing program within the IMP for work purposes was the Post-Graduation Work Permit Program (PGWPP). This program allows international students who have completed eligible postsecondary education in Canada to gain work experience in the country. The share of PGWPP work permit holders increased from 6% in 2010 to 28% in 2021, with their numbers growing from 33,100 to 269,700 over the same period.
In addition, the shares of work permit holders for study purposes and for spouses or partners of students also increased substantially. Together, they accounted for 21% of all work permit holders in 2021, more than doubling their share in 2010. Notably, work permit holders related to current and previous international students made up almost half (49%) of all work permit holders.
Conversely, the International Experience Canada program, which allows foreign youth to work in Canada through reciprocal agreements and arrangements, has decreased considerably in both absolute and relative terms in recent years.
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| count | ||||||||||||
| Total number of work permit holders | 531,700 | 560,500 | 602,900 | 649,700 | 644,700 | 603,000 | 613,300 | 685,800 | 798,500 | 961,800 | 991,500 | 963,400 |
| percent | ||||||||||||
| Work permit programs | ||||||||||||
| Temporary Foreign Worker Program | 32.9 | 28.6 | 27.3 | 27.1 | 26.3 | 23.8 | 19.2 | 15.8 | 14.3 | 13.9 | 13.7 | 15.1 |
| Agricultural programs | 6.6 | 6.5 | 6.3 | 6.4 | 7.0 | 7.7 | 8.3 | 8.1 | 7.6 | 7.0 | 6.6 | 7.7 |
| Live-in caregiver programs | 7.2 | 6.3 | 5.9 | 4.7 | 3.9 | 3.4 | 2.8 | 2.0 | 1.4 | 1.2 | 1.1 | 0.9 |
| Higher-skilled temporary foreign workers | 12.8 | 11.2 | 10.6 | 10.9 | 9.6 | 7.8 | 5.7 | 4.5 | 4.3 | 4.4 | 4.7 | 4.8 |
| Lower-skilled temporary foreign workers | 6.2 | 4.5 | 4.4 | 5.0 | 5.7 | 4.8 | 2.4 | 1.1 | 1.0 | 1.1 | 1.2 | 1.5 |
| International Mobility Program for work purposes | 42.4 | 46.0 | 48.5 | 50.1 | 53.1 | 57.6 | 61.8 | 61.6 | 60.3 | 58.6 | 58.5 | 54.6 |
| International agreements or arrangements | 6.2 | 6.9 | 7.4 | 7.3 | 7.5 | 7.7 | 7.3 | 6.4 | 5.5 | 4.6 | 3.9 | 3.4 |
| Free trade agreements | 5.4 | 5.7 | 5.9 | 5.7 | 5.8 | 6.1 | 5.7 | 5.0 | 4.2 | 3.4 | 2.7 | 2.2 |
| Canadian interests | 36.2 | 39.1 | 41.1 | 42.7 | 45.7 | 50.0 | 54.5 | 55.2 | 54.9 | 54.1 | 54.6 | 51.2 |
| Intra-company transferees | 3.1 | 3.5 | 3.9 | 3.8 | 3.8 | 4.0 | 4.0 | 3.6 | 3.4 | 3.3 | 2.9 | 2.7 |
| International Experience Canada | 17.0 | 17.4 | 16.9 | 15.3 | 15.1 | 16.1 | 16.7 | 18.0 | 17.2 | 14.5 | 10.3 | 6.1 |
| Spouses or common-law partners of skilled workers | 4.3 | 4.4 | 4.6 | 5.0 | 5.3 | 5.5 | 5.6 | 5.4 | 5.5 | 5.9 | 6.6 | 6.5 |
| Spouses or common-law partners of students | 0.9 | 1.0 | 1.0 | 1.0 | 1.3 | 1.8 | 2.3 | 2.7 | 3.1 | 3.5 | 3.1 | 3.6 |
| Post-graduation employment | 6.2 | 8.0 | 9.2 | 10.9 | 13.0 | 15.4 | 19.5 | 19.4 | 20.0 | 21.3 | 28.0 | 28.0 |
| For study purposes | 8.3 | 9.8 | 10.8 | 11.7 | 10.6 | 9.4 | 9.4 | 11.3 | 13.0 | 13.8 | 13.4 | 17.6 |
| For humanitarian and compassionate reasons | 14.3 | 12.8 | 10.8 | 8.8 | 7.7 | 5.6 | 4.5 | 6.9 | 9.4 | 11.2 | 11.4 | 10.4 |
| For permanent residence applicants in Canada | 2.1 | 2.8 | 2.6 | 2.3 | 2.3 | 3.6 | 5.0 | 4.4 | 3.0 | 2.4 | 2.9 | 2.2 |
| Source: Statistics Canada, Non-permanent Resident File. | ||||||||||||
Work permit holders with employment income
Having a valid work permit does not guarantee employment income in Canada, since some individuals may not have the intention to work, some may not be able to find employment and some may have worked but their earnings were not formally reported. Overall, there has been an increase in employment incidences (which includes reported T4 earnings or self-employment income) among work permit holders over time. In 2010, about 60% of work permit holders were employed, but this percentage increased to 68% in 2019 and further to 71% in 2020Note (Table 2).
Employment incidencesNote of work permit holders varied greatly depending on the program. Because work permit holders under the TFWP were directly recruited by employers, they were more likely to have employment income than those under the IMP for work or other purposes. In particular, work permit holders from the agricultural streams had an employment incidence that varied between 89% and 95% over the period studied. Employment incidences were generally above 84% for live-in caregiver programs and above 77% for lower-skilled TFWP work permit holders. Higher-skilled TFWP work permit holders saw their employment incidence increase from 60% in 2010 to 83% in 2020.
Within the IMP for work purposes, PGWPP permit holders tended to have the highest employment incidence: it increased from 70% in 2010 to 81% in 2020. Spouses or partners of study permit holders and intra-company transferees also displayed relatively high employment incidences, while work permit holders under international agreements had lower employment incidences. Only a small fraction of work permit holders arriving through free trade agreements reported income in Canada, and this rate barely changed over the study period, with less than one-third of them reporting employment income. Among work permit holders for study purposes, employment incidences increased from 53% in 2010 to 62% in 2020. Similarly, the employment incidence of work permit holders for humanitarian and compassionate reasons increased from 53% to 68%.
The employment incidences of work permit holders under various programs were likely influenced by the duration of the permit, as well as the age, sex and source country of the worker. Table 2 shows that longer-duration work permits were associated with higher employment incidences. Additionally, male work permit holders had higher employment incidences compared with their female counterparts. Work permit holders aged 25 to 44 exhibited higher employment incidences than younger or older individuals. Work permit holders from Southeast Asia, the Caribbean and South and Central America, Africa, and South Asia showed higher employment incidences than those from other regions. After accounting for socioeconomic characteristics, the observed differences in employment incidences across work permit programs tended to increase rather than decrease (table not presented). This finding suggests that other factors, such as regulations governing each program, job availability and the intention to work, might have had a major impact on employment incidences by work permit program.
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| percent | |||||||||||
| Total | 59.8 | 59.7 | 61.3 | 62.2 | 63.9 | 64.6 | 65.9 | 66.1 | 67.6 | 68.3 | 71.0 |
| Work permit programs | |||||||||||
| Temporary Foreign Worker Program | 76.1 | 77.8 | 80.7 | 81.9 | 82.5 | 81.3 | 83.6 | 87.4 | 87.4 | 86.5 | 85.8 |
| Agricultural programs | 91.0 | 92.7 | 93.6 | 93.8 | 93.9 | 94.8 | 94.5 | 93.8 | 91.8 | 90.5 | 89.3 |
| Live-in caregiver programs | 89.8 | 89.1 | 91.0 | 91.3 | 90.9 | 89.6 | 89.9 | 89.6 | 88.0 | 84.7 | 84.1 |
| Higher-skilled temporary foreign workers | 59.9 | 61.5 | 66.5 | 70.5 | 70.7 | 65.2 | 67.6 | 76.4 | 80.8 | 82.0 | 83.4 |
| Lower-skilled temporary foreign workers | 78.1 | 81.5 | 84.0 | 83.1 | 83.4 | 80.5 | 77.6 | 82.1 | 82.5 | 82.0 | 78.9 |
| International Mobility Program for work purposes | 50.2 | 51.5 | 53.7 | 56.1 | 58.5 | 60.5 | 62.6 | 64.0 | 65.5 | 67.3 | 70.3 |
| International agreements or arrangements | 31.1 | 36.0 | 38.6 | 39.6 | 38.2 | 37.7 | 38.6 | 39.3 | 39.6 | 40.1 | 42.4 |
| Free trade agreements | 28.6 | 30.9 | 31.6 | 32.0 | 31.2 | 31.3 | 29.7 | 29.1 | 29.2 | 30.7 | 30.2 |
| Canadian interests | 53.5 | 54.3 | 56.4 | 59.0 | 61.8 | 64.0 | 65.8 | 66.8 | 68.1 | 69.5 | 72.2 |
| Intra-company transferees | 58.6 | 62.3 | 65.5 | 65.1 | 64.8 | 66.4 | 67.0 | 65.8 | 68.9 | 72.8 | 73.0 |
| International Experience Canada | 56.5 | 55.3 | 55.4 | 56.8 | 60.7 | 65.2 | 67.9 | 69.0 | 66.6 | 66.6 | 63.3 |
| Spouses or common-law partners of skilled workers | 43.2 | 42.7 | 43.8 | 44.6 | 46.7 | 46.5 | 47.7 | 49.6 | 53.2 | 55.6 | 60.3 |
| Spouses or common-law partners of students | 55.3 | 55.8 | 56.6 | 54.4 | 56.9 | 61.1 | 61.7 | 64.6 | 66.4 | 68.7 | 71.2 |
| Post-graduation employment | 70.3 | 68.9 | 71.9 | 73.5 | 75.4 | 76.1 | 77.9 | 79.0 | 81.2 | 82.1 | 81.3 |
| For study purposes | 53.3 | 52.2 | 51.6 | 49.4 | 55.3 | 56.5 | 56.9 | 59.6 | 62.9 | 61.5 | 62.1 |
| For humanitarian and compassionate reasons | 53.1 | 51.8 | 54.4 | 52.3 | 49.9 | 53.6 | 56.9 | 51.1 | 59.9 | 61.6 | 68.4 |
| For permanent residence applicants in Canada | 70.0 | 73.1 | 69.0 | 65.1 | 61.8 | 59.8 | 63.1 | 61.0 | 59.2 | 61.0 | 66.5 |
| Work permit duration in the year | |||||||||||
| 3 months or less | 24.6 | 24.6 | 25.7 | 25.5 | 29.1 | 35.2 | 35.0 | 36.0 | 37.3 | 40.2 | 51.9 |
| 4 to 6 months | 48.9 | 48.8 | 49.5 | 49.7 | 51.9 | 55.7 | 56.2 | 59.0 | 61.2 | 60.5 | 58.3 |
| 7 to 9 months | 61.4 | 64.6 | 62.7 | 63.8 | 62.7 | 68.2 | 69.8 | 69.8 | 71.1 | 73.0 | 72.4 |
| 10 to 12 months | 72.2 | 73.3 | 73.3 | 73.7 | 73.6 | 75.0 | 75.9 | 76.3 | 76.2 | 76.8 | 76.0 |
| Sex | |||||||||||
| Male | 59.2 | 59.7 | 61.8 | 63.0 | 64.8 | 65.8 | 67.3 | 67.9 | 69.8 | 70.8 | 73.8 |
| Female | 60.7 | 59.7 | 60.7 | 61.0 | 62.5 | 63.0 | 63.9 | 63.5 | 64.5 | 64.8 | 67.0 |
| Age group | |||||||||||
| 24 or younger | 52.7 | 51.8 | 52.9 | 53.3 | 57.9 | 60.5 | 64.0 | 65.5 | 67.2 | 67.3 | 68.1 |
| 25 to 34 | 64.6 | 64.4 | 65.9 | 66.8 | 68.4 | 69.3 | 70.3 | 70.5 | 71.5 | 72.4 | 74.7 |
| 35 to 44 | 64.3 | 64.9 | 67.1 | 67.9 | 67.8 | 67.0 | 66.7 | 65.5 | 67.0 | 68.1 | 72.3 |
| 45 or older | 49.1 | 50.0 | 51.7 | 53.1 | 52.5 | 51.9 | 51.9 | 51.6 | 53.8 | 54.9 | 59.8 |
| Source region | |||||||||||
| United States | 31.0 | 32.0 | 33.9 | 34.5 | 34.0 | 33.3 | 31.0 | 31.4 | 31.7 | 31.8 | 32.4 |
| Caribbean and Central and South America | 68.1 | 70.4 | 72.7 | 71.2 | 72.0 | 76.2 | 80.9 | 79.9 | 81.5 | 79.8 | 81.2 |
| Northern and Western Europe | 54.0 | 54.2 | 53.9 | 55.0 | 57.4 | 59.9 | 61.6 | 62.8 | 62.9 | 63.6 | 63.6 |
| Southern and Eastern Europe | 51.9 | 52.0 | 56.9 | 60.6 | 62.5 | 62.5 | 64.3 | 64.1 | 63.3 | 59.4 | 65.9 |
| Africa | 65.8 | 65.9 | 68.6 | 67.2 | 69.3 | 70.2 | 71.5 | 69.5 | 73.2 | 76.6 | 80.3 |
| West Asia | 49.7 | 50.0 | 52.2 | 53.0 | 51.2 | 50.8 | 50.4 | 48.4 | 52.9 | 57.0 | 65.1 |
| East Asia | 53.1 | 50.8 | 51.7 | 53.3 | 56.0 | 57.2 | 58.7 | 60.4 | 60.8 | 60.7 | 58.5 |
| Southeast Asia | 87.3 | 86.6 | 87.6 | 87.2 | 87.3 | 85.5 | 84.9 | 82.4 | 80.4 | 80.0 | 81.6 |
| South Asia | 65.5 | 66.8 | 70.2 | 72.0 | 75.9 | 76.6 | 77.2 | 75.5 | 76.1 | 74.5 | 76.5 |
| Other | 54.6 | 52.6 | 52.6 | 55.3 | 59.0 | 62.7 | 65.4 | 68.1 | 64.3 | 65.0 | 60.7 |
| Sources: Statistics Canada, Non-permanent Resident File, Longitudinal Worker File. | |||||||||||
In summary, there have been substantial changes in the program composition among work permit holders in Canada. The TFWP, except for agricultural programs, has seen a decrease in share and number, while the IMP, particularly programs related to international students, has gained dominance. This shift indicates that Canadian employers now have access to a large pool of work permit holders without the need to undergo an LMIA. Over the study period, from 2010 to 2020, the proportion of work permit holders reporting earnings in Canada rose from 60% to 71%, and this share varied considerably by permit program. However, the reasons why a significant proportion of work permit holders did not report earnings in Canada remain unknown. Additional surveys may help shed light on the issue.
Data and definitions
The number of valid work permit holders in a calendar year was obtained from the Non-permanent Resident File (NPRF), which contains information on all temporary residents who have received a temporary permit (excluding visitor permits) to enter Canada since 1980. Being employed was defined as having positive T4 earnings or non-zero self-employment income. This information was obtained by linking the NPRF with the Longitudinal Worker File, which currently has individual records from the T1 and T4 administrative files up to 2020.
This article counts each work permit holder only once per calendar year. In determining the permit type for individuals with multiple types of permits in a year, this analysis prioritizes the TFWP, followed by the IMP for work purposes, for study purposes, for humanitarian and compassionate reasons, and for permanent residence applicants in Canada.
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 René Morissette and Li Xue for their advice and comments on an earlier version of this paper.
References
Government of Canada. (n.d.). Temporary workers - Canada.ca. Accessed April 13, 2023.
Lu, Y., & Hou, F. (2023). Foreign workers in Canada: Worker permit holders versus employment income records, 2010 to 2022. Statistics Canada, Economic and Social Reports, 3(10), 1-9.
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