In a recent interview with Bloomberg, Immigration Minister Marc Miller argued Canada has become “addicted” to temporary foreign workers.
The minister elaborated by stating “Any large industry trying to make ends meet will look at the ability to drive down wages. There is an incentive to drive labor costs down. It’s something that’ll require a larger discussion.”
This is a serious allegation as the minister is accusing employers of seeking to undermine Canadian living standards. As such, let’s take a closer look at the current state of affairs in Canada when it comes to foreign workers.
Broadly speaking, Canada allows three groups of foreign nationals to obtain work permits. The first group comprises international students. Last year, about 684,000 study permits took effect, and most international students are eligible to work so they can support themselves financially during their studies.
The second and third groups fall under who we commonly refer to as “temporary foreign workers.” However the Canadian government classifies the groups differently due to their differing policy objectives. The “International Mobility Program” or “IMP” exists for broad economic, social, and cultural reasons. Foreign nationals who fall under the eligibility criteria of any of these reasons can get a work permit under the IMP without an employer in Canada needing to prove to the federal government there is no Canadian to do the job. The IMP is so broad it covers free trade agreements (such as CUSMA with the U.S. and Mexico), athletes (for example, it’s how NHL, NBA, MLB, MLS, and other pro sports athletes get to play for Canadian teams), religious workers, working holiday visas, and much more. Other categories of foreign nationals eligible for IMP work permits include those who Canada is assisting for humanitarian purposes, such as Ukrainians fleeing the war with Russia, as well as those who make an asylum claim when they come to Canada. Last year, the IMP accounted for 768,000 work permits taking effect.
The third group belongs to the “Temporary Foreign Worker Program” or “TFWP”. These are the workers often viewed as most threatening to Canadian workers. An employer in Canada can only hire under the TFWP if they prove to the Canadian government the foreign national will not hurt Canadian workers. This is an expensive and onerous process, and as such, the TFWP’s numbers pale in comparison to the IMP. In 2023, about 185,000 work permits took effect under the TFWP. In other words, out of the record 953,000 new work permits that took effect in 2023, about 19% were under the TFWP, while 81% were under the IMP.
The above numbers refer to the flow of new study and work permits taking effect in 2023. Statistics Canada data from the end of 2023 shows the total population of these individuals stands at 2.2 million people on work and study permits, representing a near doubling compared to 2021.
As the data shows, the TFWP comprises a fraction of foreign nationals able to work in Canada and cracking down on it will not move the needle on reducing the size of the foreign worker population. The overwhelming majority of the growth of Canada’s foreign workers has been due to policies pursued by the Canadian government.
Canada had been pursuing aggressive growth on the international student front for a decade before recently deciding to crack down. The recent crack down, however, will not have a material impact on the total size of Canada’s foreign worker population anytime soon given the sheer size of international students who have already graduated or will be graduating (both of whom are largely eligible to work in the country).
The growth of the IMP can be explained by Canada’s efforts to sign more free trade agreements, welcome more newcomers, and provide humanitarian assistance. The free trade agreements allow more foreign nationals from peer nations to work here, something which Canada views as being in its economic interests. Canada seeking more permanent and temporary resident arrivals results in it issuing more work permits to family members via the IMP. Moreover, the desire to provide humanitarian assistance to those from the Ukraine and elsewhere, plus Canada’s desire to fulfil its international legal obligations, which leads to work permits being issued to asylum claimants, has contributed to the growth in foreign workers.
The only way to substantially decrease the foreign worker population would be to impose caps on international students beyond the current 2-year term, and in addition, cut down on our free trade agreements, humanitarian assistance, and immigration levels. It is unlikely, however, the Canadian government is willing to take such drastic action given the importance of newcomers to the economy, as well as the importance Canada places on keeping families together and providing assistance based on humanitarian need. For the most part, the Canadian government does not view foreign workers as a problem, but rather, as part of a solution to promote Canada’s interests and values.