A Primer on Canada s Foreign Workers.

Transcription

1 A Primer on Canada s Foreign Workers. REPORT SEPTEMBER 2016

2 A Primer on Canada s Foreign Workers Kareem El-Assal and Dr. Arthur Sweetman Preface The June 2014 overhaul of the Temporary Foreign Worker Program (TFWP) resulted in significant policy reforms, and changes to how the Government of Canada groups and reports foreign worker data. According to the Government of Canada, these methodological changes were made to reduce confusion and allow stakeholders to better understand statistics on Canada s foreign workers. This report is intended to enhance readers understanding of the changes. In addition to assessing the policy rationale behind Canada s foreign worker programs, this primer explains the various concepts that govern the reporting of foreign worker data. And, in accordance with the changes to the grouping and reporting of foreign workers, it examines data between 2004 and 2014 and preliminary 2015 data. The data are used to determine the state of Canada s foreign worker population. Lastly, this report analyzes what several recent, major developments including foreign worker reforms and recently concluded free trade agreements could mean for Canada s foreign worker population moving forward. As one of the National Immigration Centre s foundational studies, this report broadens the evidence base for forthcoming research that, in addition to providing deeper analysis of major immigration system issues, will recommend measures to enhance the system. Such analysis will be used to inform the development of a National Immigration Action Plan for Canada. To cite this report: El-Assal, Kareem, and dr. Arthur Sweetman. A Primer on Canada s Foreign Workers. Ottawa: The Conference Board of Canada, The Conference Board of Canada* Published in Canada All rights reserved Agreement no *Incorporated as AERIC Inc. An accessible version of this document for the visually impaired is available upon request. Accessibility Officer, The Conference Board of Canada Tel.: or accessibility@conferenceboard.ca The Conference Board of Canada and the torch logo are registered trademarks of The Conference Board, Inc. Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice. The findings and conclusions of this report do not necessarily reflect the views of the external reviewers, advisors, or investors. Any errors or omissions in fact or interpretation remain the sole responsibility of The Conference Board of Canada.

3 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. CONTENTS i EXECUTIVE SUMMARY Chapter 1 1 Overview Chapter 2 9 Objectives of Foreign Worker Programs Chapter Summary 10 Federal Government 11 Provincial and Territorial Governments 13 Employers 13 Workers 14 Worker s Rights Organizations 15 What Do Stakeholders Gain and Lose? Chapter 3 17 Concepts and Definitions 18 Temporary Residents 18 The Temporary Foreign Worker Program 20 International Mobility Program 24 International Students: Work Permits No Longer Required for Many 25 The Impact of June 2014 Reforms on Foreign Worker Data Grouping and Reporting Chapter 4 27 Analysis of Foreign Worker Statistics 29 IMP Work Permits Signed Increases Following Recession; TFWP Down Slightly 32 International Students: An Increasingly Significant Force in the Canadian Labour Market 33 Humanitarian and Compassionate Grounds Work Permits Are Down Following Asylum Reforms 34 TFW Arrival Destinations: Ontario, Alberta, British Columbia, and Quebec Lead the Way 36 TFWP Permits Signed Between 2004 and 2013: Mostly Other High-Skilled 37 Agricultural Workers The Exception Among TFWP Categories 37 Evaluating the Decline of TFWP Permits Signed in 2014 and The Four-Year Maximum Cumulative Duration Regulation 43 TFW Population Remains Prevalent in Canada 45 IMP Arrival Destinations: Most Settle in Ontario, British Columbia, Quebec, and Alberta 46 IMP Agreements: Rise in Canada International and Canada P/T Agreements 47 IMP Canadian Interests: Most Fall Under Reciprocal Employment, and Competitiveness and Public Policy Subcategories 50 Possible Explanations for Growing IMP Population 51 Foreign Workers Transitioning to Permanent Residence 53 Limited Labour Market Data a Challenge for Stakeholders Chapter 5 54 Future Considerations 56 The Trans-Pacific Partnership and the Comprehensive Economic and Trade Agreement 58 Conclusion Appendix A 60 Bibliography

4 Acknowledgements This report was prepared by The Conference Board of Canada s National Immigration Centre, under the direction of Dr. Michael Bloom, Vice-President, Industry and Business Strategy. The report was researched and written by Kareem El-Assal, Research Associate, Education and Immigration, The Conference Board of Canada; and Dr. Arthur Sweetman, Professor, Department of Economics, McMaster University. The report was reviewed internally by Veldon Coburn, Senior Research Associate, Education and Skills, The Conference Board of Canada. The authors also thank external reviewers Dominique Gross, Professor, School of Public Policy, Simon Fraser University; and Andrew Stevens, Assistant Professor, Faculty of Business Administration, Department of Sociology, University of Regina. The report was prepared with financial support from The Conference Board of Canada s National Immigration Centre. The findings and conclusions of this report are entirely those of The Conference Board of Canada. Any errors and omissions in fact or interpretation remain the sole responsibility of The Conference Board of Canada. The National Immigration Centre The Conference Board of Canada s National Immigration Centre is a major, research-intensive initiative that examines the immigration challenges and opportunities facing Canada today. Meeting the challenges and benefiting from immigration requires a multi-year effort that brings together many stakeholders and leads to concerted action. The Centre is studying the short-, medium-, and long-term impacts of Canada s immigration policies, programs, and practices in light of the needs and objectives of governments, employers, communities, and immigrants. Through independent, evidence-based, objective research and analysis, the Centre will make recommendations for action to help improve Canada s immigration system. The National Immigration Centre s goals are to: create a National Immigration Action Plan that embodies a shared vision for the future, specific goals, and recommended actions for stakeholders to undertake in building an internationally competitive immigration system for Canada; build a strong empirical base and foster dialogue among stakeholders to generate common understanding, shared purpose, and collaborative action; raise public awareness of the nature and importance of immigration to Canada s economy, society, and culture; track and report on the immigration system s performance in achieving the Action Plan s goals.

5 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. EXECUTIVE SUMMARY A Primer on Canada s Foreign Workers At a Glance The June 2014 overhaul of the Temporary Foreign Worker Program (TFWP) resulted in significant policy reforms, and changes to how the Government of Canada groups and reports foreign worker data. In 2014, 361,051 unique persons held a valid temporary work permit that was also signed (i.e., took effect) that year. This represented a 64 per cent increase compared with 2004, which highlights the rise of Canada s foreign workers over this period. Most foreign workers in Canada do not require a Labour Market Impact Assessment (LMIA), and are legally authorized to work in Canada due to a broad set of economic, social, and/or cultural reasons. Canada could see its foreign worker population continue to rise if more LMIAexempt and international students enter the country. Recently concluded free trade agreements, signed by Canada, could also result in a rise in the country s foreign worker population. Find Conference Board research at

6 A Primer on Canada s Foreign Workers The June 2014 overhaul of the Temporary Foreign Worker Program (TFWP) resulted in significant policy reforms, and changes to how the Government of Canada groups and reports foreign worker data. According to the Government of Canada, these methodological changes were made to reduce confusion and allow stakeholders to better understand statistics on Canada s foreign workers. This report is intended to enhance readers understanding of the changes. The overhaul led to changes to the grouping and reporting of foreign nationals in Canada. Primarily for work purposes, the original TFWP was divided into two categories: the Temporary Foreign Worker Program and the International Mobility Program (IMP). Those who require a Labour Market Impact Assessment (LMIA), which replaces the Labour Market Opinion (LMO), continue to be grouped and reported under the TFWP, as they were pre-june Those who do not require an LMIA are grouped and reported under the newly created IMP. Even these two groupings represent only a portion of the total number of foreign workers in Canada. In fact, certain foreign workers are authorized to work in Canada without requiring work permits. Also, as of June 2014, many international students no longer need temporary work permits. Rather, they automatically have the right to work in a manner consistent with the timing of their studies. Others are eligible to obtain temporary work permits while in Canada, such as those waiting for the processing of their permanent residence applications or the adjudication of their refugee claims. On the policy side, recent changes signify a concerted effort by the Government of Canada to limit use of the TFWP in order to give Canadian citizens and permanent residents increased priority in the domestic labour market. The division between the TFWP and the IMP Find Conference Board research at ii

7 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Executive Summary The Conference Board of Canada There are various benefits and costs to foreign worker programs. has changed the grouping of foreign nationals who are in Canada primarily for work purposes. Previously, these two categories of workers were labelled as temporary foreign workers and were grouped together under the Temporary Foreign Worker Program. Care must now be made in communications regarding foreign nationals in Canada for work purposes, as the new TFWP definition is much narrower than it was previously. Further, the Government of Canada has restated and reissued historical data in accordance with the new groupings to differentiate those who fall under the TFWP and IMP. In addition to assessing the latest foreign worker data, this report evaluates the foreign worker objectives of key stakeholders including governments, employers, workers, and broader society. Overall, this report notes there are various benefits and costs to foreign worker programs, including potential benefits to Canada when these programs are well-executed. Among the cases with net benefits, some benefits are universal, with no one losing. In other instances, the impacts are more unequally distributed with some gaining benefits and others bearing costs. Canada s foreign worker population has increased significantly over the past decade. In 2014, 361,051 unique persons held a valid temporary work permit that was also signed (i.e., took effect) that year. This represents a 64 per cent increase compared with Most foreign workers in Canada do not require a Labour Market Impact Assessment (LMIA), and are legally authorized to work in Canada due to a broad set of economic, social, and/or cultural reasons. The 2014 and preliminary 2015 data showed a substantial decline in signed TFWP permits compared with previous years. This decline was likely due to a combination of economic forces and TFWP policy reforms. Moving forward, Canada could see its foreign worker population continue to rise if more LMIA-exempt and international students enter the country. Recently concluded free trade agreements signed by Canada could also result in a rise in the country s foreign worker population. Find Conference Board research at iii

8 A Primer on Canada s Foreign Workers Acronyms ESDC: Employment and Social Development Canada H&C: Humanitarian and Compassionate Grounds ICT: Intra-company transfers IMP: International Mobility Program IRCC: Immigration, Refugees and Citizenship Canada (formerly Citizenship and Immigration Canada) IRPA: Immigration and Refugee Protection Act IRPR: Immigration and Refugee Protection Regulations LMIA: Labour Market Impact Assessment LMO: Labour Market Opinion NOC: National Occupational Classification PGWP: Post-Graduate Work Permit SAW(s): Seasonal agricultural worker(s) SAWP: Seasonal Agricultural Worker Program TFW(s): Temporary foreign worker(s) TFWP: Temporary Foreign Worker Program Source: Immigration, Refugees and Citizenship Canada. Find Conference Board research at iv

9 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. CHAPTER 1 Overview Chapter Summary The Temporary Foreign Worker Program was overhauled in June 2014, leading to changes to the grouping and reporting of foreign nationals in Canada primarily for work purposes into categories: the Temporary Foreign Worker Program (TFWP) and the newly created International Mobility Program (IMP). Other foreign nationals are authorized to work in Canada temporarily even though they are in the country mainly for non-work purposes and are grouped and reported separately from the TFWP and IMP. These include international students, work permit holders for humanitarian and compassionate grounds purposes, and permanent residence purposes. In light of recent policy, grouping, and reporting changes, this report conducts a statistical analysis of Canada s foreign workers dating back to Find Conference Board research at

10 A Primer on Canada s Foreign Workers The Temporary Foreign Worker Program was overhauled in June 2014, leading to changes to the grouping and reporting of foreign nationals in Canada primarily for work purposes 1 into categories: the Temporary Foreign Worker Program and the International Mobility Program (IMP). Those who require a Labour Market Impact Assessment (LMIA), which replaces the Labour Market Opinion (LMO), continue to be grouped and reported under the TFWP, as they were pre-june In broad terms, the LMO previously served the same function as the LMIA though with less stringent requirements. Administered by Employment and Social Development Canada, an LMIA is a labour market test to determine what impact the hiring of a foreign national 2 is likely to have on the Canadian labour market. Part of this test requires the employer to demonstrate that there is a need to fill the vacancy and that the employment of a foreign national would not adversely affect the job prospects of the domestic workforce. The new TFWP, therefore, represents only a modest portion of those grouped as being in the pre-june 2014 TFWP. Previously, foreign nationals who did not require an LMO were also grouped and reported under the TFWP. However, since June 2014, they have been grouped and reported under the newly created IMP. (See What Is a Labour Market Impact Assessment. ) 1 Foreign nationals, who are in Canada primarily for work purposes, are classified under either the Temporary Foreign Worker Program (TFWP) or International Mobility Program (IMP). They are distinguished from foreign workers in Canada mainly for non-work purposes who are grouped and reported separately from the TFWP and IMP. These individuals include international students, work permit holders for humanitarian and compassionate purposes, and permanent residence purposes although these individuals may also be part- or full-time workers. 2 An individual who is not a Canadian citizen or permanent resident. Find Conference Board research at 2

11 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 1 The Conference Board of Canada What Is a Labour Market Impact Assessment? A Labour Market Impact Assessment, similar to the previous Labour Market Opinion, is a labour market test administered by Employment and Social Development Canada. The LMIA assesses what impact the hiring of a foreign national is likely to have on the Canadian labour market. Part of this is the Canadian employer demonstrating that there is a need to fill the vacancy, and that the employment of a foreign national would not adversely affect the job prospects of the domestic workforce. If this need is successfully demonstrated by the employer, ESDC issues a positive LMIA, which enables the foreign national to apply to Immigration, Refugees and Citizenship Canada for an employer-specific work permit. Conversely, as of June 2014, foreign nationals in Canada for work purposes and who do not require an LMIA are grouped and administered under the International Mobility Program. Depending on their entry stream, an IMP work permit holder may have an employer-specific ( tied ) work permit, such as a NAFTA worker or an intra-company transfer, or may have an open work permit. Source: Employment and Social Development Canada. Even these two groupings represent only a portion of the total number of foreign workers in Canada. 3 In fact, certain foreign workers are authorized to work in Canada without requiring work permits. 4 Also as of June 2014, many international students no longer need temporary work permits. Rather, they automatically have the right to work in a manner consistent with the timing of their studies. Others are eligible to obtain temporary work permits while in Canada, such as those waiting the processing of their permanent residence applications or the adjudication of their refugee claims. (See Temporary Residents Legally Authorized. ) 3 In this report, we use foreign workers to refer to all persons who are legally authorized to work in Canada on a temporary basis. 4 This is discussed further in Chapter 3. Find Conference Board research at 3

12 A Primer on Canada s Foreign Workers Exhibit 1 Temporary Residents Legally Authorized to Work in Canada Work permit holders International students Work purposes Other purposes TFWP IMP Study Refugee claimants H&C Work permit exempt workers PR Sources: Immigration, Refugees and Citizenship Canada; The Conference Board of Canada. These changes represent significant revisions to TFWP policy, and how TFWP and IMP data are grouped and reported. On the policy side, recent changes signify a concerted effort by the Government of Canada to limit use of the TFWP in order to give Canadian citizens and permanent residents increased priority in the domestic labour market. (See Major Temporary Foreign Worker Program. ) Find Conference Board research at 4

13 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 1 The Conference Board of Canada Major Temporary Foreign Worker Program Policy Reforms in Recent Years TFWP policy has evolved in recent years as the Government of Canada has sought to enhance program integrity ensuring that Canadians and permanent residents have priority in the domestic labour market while protecting the rights of TFWs. In 2009, the Auditor General s report found that there was a lack of systematic assessment of the genuineness of job offers. This created integrity issues for the TFWP as temporary work permits might have been issued for jobs that did not exist. The report also highlighted the lack of systematic follow-up from the federal government to verify that employers were complying with the terms and conditions under which an LMO application was approved. That year, the government announced it would make regulatory changes to monitor employer compliance with LMO conditions. The government would also forbid access to the TFWP for two years if an employer had provided significantly different wages, working conditions, or occupation requirements than those offered during the previous employment of a TFW. These regulations came into force in April In April 2011, the maximum cumulative duration regulation also came into effect. It limits the length of time that certain foreign nationals can temporarily work in Canada to four years. Once this limit has been reached, the foreign national cannot temporarily work in Canada again until a four-year period has passed. However, this regulation does not apply to international students, higher-skilled workers (under NOC codes 0 and A), several LMIA-exempt categories, seasonal agricultural workers (SAWs), those transitioning to permanent residence, and several other categories of foreign workers. An April 2012 reform enabled employers to pay TFWs up to 15 per cent less than the prevailing average wage for high-skilled occupations and five per cent less than the prevailing average wage for lower-skilled occupations. But employers had to demonstrate that TFWs were being paid the same wages as their Canadian employees in the same occupation and region. In April 2013, this policy was reversed, as a suite of new reforms was introduced including the requirement that employers pay TFWs at or above the prevailing wage in the same occupation and region. In July 2013, new measures were introduced Find Conference Board research at 5

14 A Primer on Canada s Foreign Workers requiring employers to double (from two weeks to four weeks) the length of time they needed to advertise job vacancies before they could apply to recruit TFWs. And, a new processing fee of $275 was implemented. In June 2014, the Government of Canada introduced new measures to regulate the TFWP to better ensure it is used as a last resort by employers when qualified domestic workers are not available. Key changes included caps on low-wage TFWs, which reduced the duration of each work permit set out in an LMIA from two years to one year for all low-wage positions. The fee for an LMIA increased from $275 to $1,000 for every TFW position requested by an employer, except for TFWs working in the on-farm primary agriculture sector. Employers could no longer hire lower-skilled TFWs in the accommodation, food services, and retail trade sectors in economic regions with an unemployment rate at or above 6 per cent. As part of its ongoing efforts to improve foreign worker program integrity, the Government of Canada, in June 2014, announced stronger TFWP and IMP enforcement. It did this through a stricter screening process, increased workplace inspections, and Administrative Monetary Penalties of up to $100,000 per violation. The violations were capped at $1 million in a single year period for employers that did not comply with regulations. In July 2015, further regulations governing employer violations of TFWP and IMP conditions were announced, which took effect in December In February 2016, the government made an exemption effective for the remainder of the year that allows an employer in any seasonal industry to bring in an unlimited number of TFWs, provided the work period is less than 180 days. In May 2016, the Government of Canada s Standing Committee on Human Resources, Skills and Social Development, along with the Status of Persons with Disabilities, began reviewing the TFWP. The stated purpose of the review is for the committee to study the TFWP and provide advice and suggestions for reform and improvement. In June 2016, the federal government announced a temporary freeze on a June 2014 reform that, had it taken effect as scheduled in July 2016, would have capped the proportion of an employer s workforce consisting of low-wage TFWs at 10 per cent. For employers who used the TFWP prior to June 2014, Find Conference Board research at 6

15 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 1 The Conference Board of Canada the cap will remain at 20 per cent (or at the employer s current level, whichever is lower). Employers that hired low-wage TFWs after June 2014, as well as firsttime users of the TFWP, are subject to a 10 per cent cap. Sources: CBC; Employment and Social Development Canada; Immigration, Refugees and Citizenship Canada; The Globe and Mail; Government of Canada; Office of the Auditor General of Canada. The division between the TFWP and the IMP has changed the grouping of foreign nationals who are primarily in Canada for work purposes. Previously, these two categories of workers were labelled as Temporary Foreign Workers and were grouped together under the Temporary Foreign Worker Program. (See The New Definition. ) Care must now be made in communications regarding foreign nationals who are in Canada mainly for work purposes, as the new TFWP definition is much narrower than it was previously. Further, the Government of Canada has restated and reissued historical data in accordance with the new groupings to delineate between those who fall under the TFWP and IMP. The New Definition of a Temporary Foreign Worker Prior to the June 2014 reforms, temporary foreign worker was an umbrella term used to define all foreign nationals who were in Canada primarily for work purposes. Since the reforms, a TFW is more narrowly defined, referring only to those workers who require an LMIA to work in Canada. They are grouped and reported under the Temporary Foreign Worker Program (TFWP). Those foreign workers who are in Canada primarily for work purposes, but do not require an LMIA, are now grouped and reported under the International Mobility Program (IMP). Source: Employment and Social Development Canada. Find Conference Board research at 7

16 A Primer on Canada s Foreign Workers The new TFWP definition is much narrower than it was previously. It is important to understand how these changes affect the grouping and reporting of foreign workers in Canada. To understand the changes, it is essential to identify the rationale behind allowing foreigners to work in Canada temporarily, which we review in the following chapter. We also assess the various concepts that govern the reporting of foreign worker data. And, in accordance with the changes to the grouping and reporting of foreign workers, we examine data between 2004 and 2014, and preliminary 2015 data, to assess the state of Canada s foreign worker population. Lastly, based on the aforementioned analysis, we discuss what several recent developments including foreign worker reforms and recently concluded free trade agreements could mean for Canada s foreign worker population moving forward. Find Conference Board research at 8

17 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. CHAPTER 2 Objectives of Foreign Worker Programs Chapter Summary Chapter Summary Temporary residents are legally authorized to enter and work in Canada for a variety of economic, social, and cultural purposes. When assessing foreign worker programs, we must take into account the objectives of governments, employers, workers, and broader society all of whom are crucial actors. There are various benefits and costs to foreign worker programs, including potential benefits to Canada when they are well-executed. In some instances, the benefits are universal, with no one losing but, in others, the impacts are more unequally distributed, with some gaining benefits and others bearing costs. Find Conference Board research at

18 A Primer on Canada s Foreign Workers As stated under section 3 (g) of the Immigration and Refugee Protection Act, temporary residents are legally authorized to enter and work in Canada for a variety of economic, social, and cultural purposes. 1 Clarifying the objectives of foreign worker programs 2 is key to ensuring these programs are favourable to stakeholders. Key stakeholders include the federal and provincial/territorial governments, employers, workers, potential workers, and broader society. Interestingly, many Canadians have various distinct relationships with foreign workers. Examples include fellow members of the labour force and consumers of products and services partly provided by foreign workers. This chapter evaluates what stakeholders expect from the TFWP and IMP and the various benefits and costs of these programs for stakeholders. Federal Government The Government of Canada s policy objectives for foreign worker programs have evolved over time in response to Canada s broad and dynamic needs. The TFWP exists solely for economic reasons (i.e., addressing specific temporary labour market shortages) while the IMP serves economic, social, and cultural purposes. The federal government permits the entry of foreign workers to supplement not supplant the domestic workforce. The federal government also desires positive economic spillovers from foreign workers who may help enhance 1 Government of Canada, Immigration and Refugee Protection Act [IRPA]. 2 The term foreign worker programs refers here to all programs, categories, and streams that allow foreign nationals to hold temporary work permits in Canada. Find Conference Board research at 10

19 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 2 The Conference Board of Canada Immigration is defined as an area of shared federalprovincial/territorial jurisdiction. Canadian living standards and who may help maintain or enhance the productivity of firms, thereby increasing firm outputs and revenues, and government tax revenues. Achieving these diverse goals requires the federal government to monitor and adjust foreign worker programs regularly to ensure program integrity is upheld and policy objectives are met. In its efforts to protect the domestic workforce, the federal government sometimes offers incentives for employers to hire domestic workers, through grants and other means. The government discourages employers from displacing domestic workers through measures such as the LMIA process and application fees, and by establishing standards, compliance reviews, and penalties for employers that do not adhere to regulations. The government also facilitates the entry of temporary residents who are eligible to work in Canada for social and cultural purposes. This includes, but is not limited to, artists, athletes, charitable and religious officials, educators, entertainers, humanitarian and compassionate grounds applicants, and permanent residence applicants. Provincial and Territorial Governments Though the Government of Canada is the principal actor in shaping, administering, and enforcing foreign worker policy, provincial and territorial governments remain active in this domain. Indeed, this is their constitutional prerogative, as immigration is defined as an area of shared federal-provincial/territorial jurisdiction under section 95 of the Constitution Act, Additionally, provinces and territories are responsible for most labour laws, which they enforce to protect the labour rights and safety of domestic and foreign workers alike. This includes legislation in Manitoba, Ontario, Nova Scotia, and Saskatchewan that offers additional safeguards for foreign workers. Ensuring that foreign workers are protected is complex due to jurisdictional considerations. For instance, when a foreign worker has a complaint, the particulars of the issue dictate the path to a resolution. The resolution may fall under federal (e.g., Employment and Social Find Conference Board research at 11

20 A Primer on Canada s Foreign Workers Development Canada) or provincial/territorial (e.g., employment standards or workers compensation body) authority, or a public or private social service. This can make it difficult even for legal experts to navigate the jurisdictional terrain to help resolve foreign worker disputes. 3 Concerns have also been raised about information-sharing deficiencies between the federal and provincial/territorial governments, and lack of provincial and territorial tracking of foreign worker complaints against employers. 4 Like their federal counterpart, the provinces and territories seek foreign workers to help their economies and address their labour market needs. Each level of government is also influenced by the claims of diverse groups representing both those who benefit and those who report losses resulting from government policy and practice regarding foreign workers. The main difference between the federal and provincial/ territorial governments is the scope of their objectives. While the federal government monitors foreign worker usage across Canada, and seeks to ensure it has a net positive impact nationally, the provinces and territories are regionally focused. The differences in scope between the two sides may lead to conflicting actions being desired. For example, when the federal government restricts foreign worker usage nationally such as through the June 2014 TFWP reforms this may conflict with provincial and territorial interests. This especially occurs in jurisdictions with tight labour markets where foreign workers may be heavily relied upon. When federal restrictions are antithetic to local needs, one recourse of the provinces and territories is to select foreign workers to transition to permanent residence within their provincial/territorial immigrant nominee programs. Of course, if some labour market needs are truly temporary, then this route may not be appealing. However, foreign workers have proven to be a steady, and often major, source of provincial/territorial nominees over the years for several reasons. In jurisdictions that have trouble attracting and retaining immigrants, as well as those seeking 3 Nakache and Kinoshita, The Canadian Temporary Foreign Worker Program. 4 Hildebrandt, Few Provinces Track Complaints ; D Aliesio, Provinces Keep Ottawa in the Dark. Find Conference Board research at 12

21 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 2 The Conference Board of Canada more immigrants, offering permanent residence to foreign workers helps the provinces and territories address their demographic and labour market needs. Foreign workers also often possess the human and social capital, likely enhanced during their temporary residence, necessary to settle and integrate successfully within the province or territory. Employers Employers turn to foreign workers for a number of reasons. Most commonly, they seek TFWs when they are unable to find readily available Canadian citizens, permanent residents, or existing relevant foreign workers to fill job vacancies at what are deemed to be appropriate wages and with an acceptable amount of employerprovided training. Accessing foreign workers (both through the TFWP and IMP) allows employers to continue and perhaps enhance their operations, productivity, and competitiveness. In the absence of suitable domestic or foreign workers, employers may not be able to meet their operational targets. Some employers have used foreign workers for inappropriate or illegitimate reasons. Cost-saving incentives may cause some employers to rely upon foreign workers. Sometimes, long government processing times for permanent residence applications have prompted employers to seek temporary foreign workers as an alternative. 5 While using foreign worker programs without regard for the rules may yield some benefits for employers, punishments, increases to Administrative Monetary Penalties, and the commencement of active monitoring activities discourage misuse. Workers Domestic workers and labour unions often view foreign workers with concern. These concerns are valid where foreign workers negatively affect the domestic labour market by increasing domestic unemployment, contributing to decreasing wages, and slowing wage growth. They are 5 Office of the Auditor General of Canada, 2009 Fall Report. Find Conference Board research at 13

22 A Primer on Canada s Foreign Workers also valid where foreign workers act as a disincentive to productivityenhancing investments in operations infrastructure and machinery and equipment. On the other hand, foreign workers may be beneficial for their domestic counterparts. This may be the case if foreign workers are able to help employers sustain or boost operations without displacing or harming the wages of domestic workers in other words, when they complement the domestic workforce in production. Foreign workers are generally drawn to Canada by its high quality of life and wages. 6 While some foreign workers seek to reside in Canada only temporarily, others may view foreign worker programs as a stepping stone towards permanent residence. In fact, possessing Canadian work experience puts foreign workers, who are seeking to transition, at an advantage when applying for permanent residence. The Canadian Experience Class, provincial/territorial nominee programs, and Express Entry s Comprehensive Ranking System are designed to give advantage to those with Canadian work experience. Research also shows that following the attainment of permanent residence, immigrants who previously worked in Canada initially earn more than immigrants without prior Canadian work experience. 7 Worker s Rights Organizations A number of organizations advocate on behalf of TFWs human, labour, and workplace safety rights, and seek to reform the TFWP. Lower-skilled TFWs are seen as being particularly vulnerable due to their closed work permits that tie them to an employer, occupation, and work location. 8 Due to the dependence on their employers, TFWs may find it difficult to leave unsatisfactory work conditions and may be deterred from making employer complaints due to fears of being dismissed from their jobs and 6 Elgersma, Temporary Foreign Workers. 7 Sweetman and Warman, Former Temporary Foreign Workers and Canada s Temporary Foreign Worker Programs ; Bonikowska, Hou, and Picot, Which Human Capital Characteristics; Hou and Bonikowska, The Earnings Advantage. 8 Elgersma, Temporary Foreign Workers. Find Conference Board research at 14

23 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 2 The Conference Board of Canada Potential economic benefits include increased investment, trade, and tourism opportunities. deported from Canada. 9 Another major concern is that TFWs often feel socially isolated for a variety of reasons. These include their physical workplace being in a geographically remote location; their inability to access government settlement and integration services, such as language training that are vital to integrating within the community; and their maltreatment and distrust from Canadian co-workers all of which could contribute to negative social cohesion within communities. 10 Workers rights organizations continue to seek policy changes to better protect TFWs and raise awareness among TFWs about their rights in Canada. They also seek policy changes to make it easier for TFWs to become permanent residents as a means of addressing human and labour rights concerns and enhancing social cohesion. What Do Stakeholders Gain and Lose? If foreign workers complement the existing workforce, their presence should, in theory, lead to positive gains for workers, employers, governments, and society. Potential economic benefits for Canada include increased investment, trade, and tourism opportunities. Foreign workers may protect Canadian jobs if their presence is the difference between an employer resuming, scaling back, or ceasing operations. Foreign workers may even help create jobs for domestic workers if their presence allows employers to spend more on productivity-enhancing investments. Contrarily, governments and broader society lose if foreign worker programs do not meet these objectives. Net negative impacts may arise if the presence of foreign workers places downward pressure on wages and creates disincentives for employers to invest in productivity-enhancing activities. Foreign worker programs may also negatively impact labour market signals. This may occur if employers prefer to hire foreign workers over readily available domestic workers or if employers rely upon foreign workers to meet their 9 Elgersma, Temporary Foreign Workers; Law Commission of Ontario, Vulnerable Workers and Precarious Work. 10 Taylor and Foster, Migrant Workers and the Problem of Social Cohesion in Canada. Find Conference Board research at 15

24 A Primer on Canada s Foreign Workers A well-executed foreign worker system offers benefits to Canada. long-term workforce needs. Foreign worker programs may also have negative impacts if, as a result of the aforementioned possibilities, they discourage domestic workers from upgrading their skills or searching for work and employers from investing in training and/or productivityenhancing physical capital. Foreign workers may also lose out as a result of abuses by unscrupulous recruiters, placement agencies, employers, or human traffickers. As previously mentioned, concerns are also raised about tied work permits putting some foreign workers in precarious situations. In addition to economic considerations, the broader social and cultural implications of foreign worker programs merit attention. Society and foreign workers benefit if foreign workers participate and integrate into Canadian communities. Canadian society generally benefits by having artists, scientists, athletes, tradespeople, educators, entertainers, and other skilled people enter and work in the country. The reciprocal benefits of certain IMP streams are also useful for Canadians who wish to study, work, and experience other cultures abroad. On the negative side, foreign workers may feel excluded from Canadian society. 11 Similarly, the presence of foreign workers may cause social tensions due to the view that they are taking jobs away from or harming the wages of domestic workers. On the whole, a well-executed foreign worker system that meets stakeholder objectives, and is complementary to the domestic workforce and permanent immigration system, offers benefits to Canada. From an economic perspective, foreign worker programs are useful because they give Canadian employers the ability to address labour force needs, which may result in wider benefits for stakeholders. Foreign worker programs also offer social and cultural benefits for Canada. Ultimately, it is worthwhile to consider the benefits and costs if Canada introduced further barriers for foreign workers. Would they enhance labour market outcomes for domestic workers and yield better economic gains or hurt employers, workers, and the economy? 11 Elgersma, Temporary Foreign Workers. Find Conference Board research at 16

25 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. CHAPTER 3 Concepts and Definitions Chapter Summary Temporary residents are grouped and reported in several ways, including whether they are in Canada primarily for work or non-work purposes. Temporary residents, who are primarily in Canada for work purposes, are divided between the Temporary Foreign Worker Program and International Mobility Program. Immigration, Refugees and Citizenship Canada (IRCC) divides the TFWP into three categories. The IMP contains numerous, broader economic, social, and cultural categories. Due to the new delineation between the TFWP and IMP, and methodological changes, the way work permit holders are measured and reported has changed, causing the Government of Canada to restate and reissue past data. Find Conference Board research at

26 A Primer on Canada s Foreign Workers In June 2014, the federal government announced that it was delineating the TFWP and IMP to reduce confusion and better reflect the major differences between those programs. 1 As a result, the Government restated and reissued past data to enable stakeholders to analyze and compare pre- and post-june 2014 foreign worker statistics. This chapter clarifies the various concepts and definitions that govern the measurement and reporting of foreign worker data. These data are needed to understand the state of Canada s foreign worker population. Temporary Residents A temporary resident is a foreign national who is legally authorized to be in Canada for a defined period of time. Some temporary residents are legally authorized to work in Canada; others are not. Temporary residents eligible to work in Canada are divided into those in the country primarily for work and other purposes. (See Exhibit 1.) The Temporary Foreign Worker Program Employment and Social Development Canada and Immigration, Refugees and Citizenship Canada use different approaches to report TFWP data. This is due to differences in their roles in administering the TFWP and in the information available in their data administrative systems. ESDC uses provincial/territorial median wages, as reported in Statistics Canada s Labour Force Survey, to determine the program requirements of each TFWP category. Thus, ESDC reports and administers the TFWP across four categories: High-Wage; Low-Wage; 1 Employment and Social Development Canada, Overhauling the Temporary Foreign Worker Program, 1 2. Find Conference Board research at 18

27 The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Chapter 3 The Conference Board of Canada Primary Agriculture Stream; and Highest-Demand, Highest-Paid, or Shortest-Duration. In December 2014, ESDC merged the administration of the Live-in-Caregiver Program category into the High- and Low- Wage categories. IRCC does not include salary information in its data administrative system and thus does not report on the TFWP based on wage. Rather, it divides the TFWP into three categories and uses the National Occupational Classification (NOC) to report on the intended occupations of workers: Agricultural Workers; Live-in Caregivers; 2 Other which contains three sub-categories: Other High-Skilled; Other Lower-Skilled; Other Occupations. 3 As most of the data analyzed in this report have been obtained from IRCC, and since it provides greater detail of the various types of foreign workers in Canada, we use IRCC s approach in our analysis of the TFWP. International Mobility Program Unlike the TFWP, which solely exists for economic purposes, the IMP contains economic and social and cultural objectives, offering Canadian employers and LMIA-exempt work permit holders more flexibility. IMP work permit holders are eligible to temporarily work in Canada for either of the following broad reasons: Agreements or Canadian Interests. (See The Two Categories of IMP Work. ) The IMP aims to provide competitive advantages to Canada and reciprocal benefits to Canadians, such as through the labour mobility provisions contained in NAFTA, which also allow Canadians to work abroad. 4 2 Although the live-in requirement has been removed, IRCC continues to report this category of TFWs as live-in caregivers. 3 This includes permit holders with occupations not stated and permits with an IRCC synthetic occupation that is not included in ESDC s National Occupational Classification. 4 Employment and Social Development Canada, Overhauling the Temporary Foreign Worker Program, 26. Find Conference Board research at 19

28 A Primer on Canada s Foreign Workers The Two Categories of IMP Work Permit Holders The IMP contains all LMIA-exempt work permit holders eligible to work in Canada due either to Agreements or Canadian Interests: Agreements include persons who are in Canada either due to bilateral or multilateral agreements between Canada and foreign nations. These agreements include NAFTA, the General Agreement on Trade in Services (GATS), and other free trade agreements. Also present in this category are persons who are employed in Canada through agreements between Canada and the provinces/territories, and agreements between the provinces/territories and foreign nations. Canadian Interests include persons who are deemed to be a significant benefit to Canada and are in Canada through reciprocal employment, for reasons of competitiveness and public policy, or for charitable or religious work. Significant Benefit includes persons with open work permits who have applied for permanent residence; entrepreneurs/self-employed individuals; intracompany transfers; and persons in Canada to complete emergency repairs. Reciprocal Employment includes persons present in Canada due to reciprocal agreements between Canada and foreign nations. Competitiveness and Public Policy includes spouses of skilled workers and students; post-doctoral PhD fellows, and award recipients; medical residents; and fellows. Source: Immigration, Refugees and Citizenship Canada, International Mobility Program Work Permit Holders by Program. In addition to these reciprocal purposes, Canada authorizes LMIA exemptions for a wide range of temporary residents who are in Canada primarily for work or non-work purposes. However, those who fall in the latter category are grouped and reported separately. (See International Mobility Program. ) Find Conference Board research at 20