Economic and Social Reports
Foreign workers in Canada: Industry retention after transitioning to permanent residency among work permit holders for work purposes

Temporary foreign workers (TFWs) have become an important source of Canada’s labour supply, especially in some lower-paying sectors. For example, in 2021, TFWs accounted for 18% of the workforce in the agriculture sector and 10% in the accommodation and food services sector.^Note  TFWs can also play a long-lasting role in alleviating labour shortages because, on average, one-third of work permit holders transitioned to permanent residency (PR) within five years after receiving their initial work permit (Lu & Hou, 2024). However, not all TFWs remain in their initial industries after gaining PR. Understanding TFWs’ industry retention can assist industries and policy makers in developing workforce programs tailored to the needs of both the industry and its workers.

A few previous Statistics Canada studies have examined the industry retention of TFWs in primary agriculture, food manufacturing, and accommodation and food services. These studies found that, five years after transitioning to PR, 20% to 50% of TFWs stayed in the same industry of their first employment in Canada, depending on their occupational skill level and initial industrial sector (Xu et al., 2024; Zhang et al., 2024; Zhong et al., 2024).

This article provides a more comprehensive analysis of the industry retention of TFWs after their PR transition by examining all TFWs who held paid employment in Canada as work permit holders for work purposes (hereafter referred to as WPPRs).^Note  The analysis focuses on WPPRs who made the PR transition from 2011 to 2020 and assesses their industry retention by work permit type and industrial sector. Industry retention in this article is defined as the continuation of paid employment in the same industry where the WPPRs were employed before their PR transition (for further details, see the “Data and definitions” section). Not remaining in the same industry could result from shifting to other industries, becoming self-employed,^Note  not being employed or not being observed in tax records.

Over two-thirds of work permit holders for work purposes remained in the same sector one year after transition, with large variation across work permit programs

One year after their transition to PR, the majority of WPPRs continued to work in the same sector where they worked as work permit holders. Specifically, 72% to 81% of Temporary Foreign Worker Program (TFWP) participants (except for agricultural workers and live-in caregivers), international agreement and arrangement participants, and intra-company transferees were employed in the same industry after their PR transition (Table 1).

About half of live-in caregivers worked in the same sector one year after their transition—the lowest proportion among the various types of work permit programs. In agricultural programs, 69% of those who received their PR in the 2011-to-2015 period stayed in the same sector one year after the transition, while the retention rate dropped to 49% for the 2016-to-2020 cohort.

Overall, about 92% of WPPRs continued to work (including in self-employment) one year after transition in both cohorts. Roughly 5% of WPPRs did not report employment income,^Note  and another 3% were not found in tax records.^Note 

WPPRs who were spouses of foreign workers or students had the highest non-employment incidence (10% to 16%) one year after their PR transition. In contrast, inter-company transferees and youth exchange program participants had the highest rate of not being observed in the tax files (5% to 7%).

Five years after the PR transition, the industry retention rate of the 2011-to-2015 cohort dropped to 43%, 25 percentage points lower than the first-year retention rate. Among major work permit programs, only higher-skilled TFWP participants^Note  and intra-company transferees maintained a five-year retention rate above 50%. The lowest retention rate (29%) was observed among live-in caregivers.

Work permit holders for work purposes who worked in utilities, health care and social assistance, and finance and insurance were most likely to stay in the same sector after transitioning to permanent residency

Industry retention varied significantly not only across work permit programs, but also across sectors in which WPPRs were previously employed.

For both the 2011-to-2015 and 2016-to-2020 transition cohorts, WPPRs who worked in the utilities, health care and social assistance, and finance and insurance sectors registered high retention rates one year after the transition, ranging from 75% to 81% (Table 2).

In contrast, low retention rates, ranging from 37% to 53%, were seen for WPPRs who were previously employed in agriculture, forestry, fishing and hunting; real estate and rental and leasing; and management of companies and enterprises.

The retention rates of the 2016-to-2020 cohort differed markedly from those of the 2011-to-2015 cohort in certain industrial sectors, such as mining, quarrying, and oil and gas extraction (a decline of 13 percentage points).

Relatively higher rates of self-employment one year after the PR transition (5% to 7%) were observed among former WPPRs who worked in construction; transportation and warehousing; and arts, entertainment and recreation.

Five years after PR transition, the retention rates decreased in all sectors but with varied magnitudes. More than half of the 2011-to-2015 cohort who previously worked in utilities (58%), finance and insurance (55%), and health care and social assistance (65%) still worked in the same sector as they did before their transition. At the lower end of the spectrum, the five-year retention rate was 19% for those who previously worked in real estate and rental and leasing, and 9% in management of companies and enterprises.

In summary, many permanent residents who previously held work permits for work purposes and were employed before transitioning to PR continued working in the same sector in the first year after receiving PR status. Among WPPRs who transitioned to PR from 2011 to 2020, about 92% remained in employment (including self-employment) one year after their transition, with over two-thirds staying in the same sector. However, five years after the transition, the industry retention rate significantly declined to 43% for the 2011-to-2015 cohort.

Across work permit programs, participants in live-in caregiver programs exhibited the lowest industry retention rates. Given that most live-in caregiving jobs are physically and mentally demanding and often require round-the-clock availability, many participants may seek jobs with more favourable working conditions after transitioning. Conversely, participants in other TFWP categories (except agricultural programs), international agreement and arrangement participants, and intra-company transferees demonstrated higher industry retention rates. These groups generally reported high annual earnings while employed as TFWs (Lu & Picot, 2024).

By industrial sector, low industry retention rates after transitioning to PR were seen for WPPRs who previously worked in agriculture, forestry, fishing and hunting; real estate and rental and leasing; and administrative and support, waste management and remediation services. In contrast, those employed in utilities, finance and insurance, and health care and social assistance tended to have relatively high industry retention rates. These differences in retention rates across sectors are likely related to variations in wage levels, working conditions, job stability, specific skill requirements and other potential factors.

Data and definitions

The data on WPPRs are 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 between 1980 and 2022. Employment information is obtained by linking the NPRF with the Longitudinal Worker File, which currently has individual records from the T1 and T4 administrative files up to 2021.

This analysis focuses on former TFWs aged 25 to 54 at immigration who transitioned to PR from 2011 to 2020 and had their last pre-transition paid employment in Canada with work permits for work purposes. Records for pre-transition employment that occurred more than five years before transition or lacked a North American Industry Classification System code are not included (about 16,000 individuals, or 4%).

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 Marc Frenette and Xue Li for their advice and comments on an earlier version of this paper.

References

Lu, Y. & Hou, F. (2023). Foreign workers in Canada: Distribution of paid employment by industry. Economic and Social Reports 3(12), 1-7.

Lu, Y. & Hou, F. (2024). Foreign workers in Canada: Differences in the transition to permanent residency across work permit programs. Economic and Social Reports 4(6), 1-6.

Lu, Y. & Picot, G. (2024). Foreign workers in Canada: Labour force attachment among temporary residents with paid employment in 2019. Economic and Social Reports 4(3), 1-6.

Xu, L., Lu, Y. & Zhong, J. (2024). Temporary foreign workers in primary agriculture in Canada: Transition from temporary residency to permanent residency and industry retention after transition. Economic and Social Reports 4(3), 1-12.

Zhang, J., Lu, Y., Choi, Y. & Zhong, J. (2024). Temporary foreign workers with lower-skill occupations in the food manufacturing industry: Transition to permanent residency and industrial retention after transition. Economic and Social Reports 4(1), 1-10.

Zhong, J., Lu, Y., Choi, Y. & Zhang, J. (2024). Temporary foreign workers with lower-skill occupations in the accommodation and food services industry: Transition to permanent residency and industrial retention after transition. Economic and Social Reports 4(1), 1-9.