Temporary Foreign Workers in Canada: Are They Really Filling Labour Shortages?

Report/Press release

Temporary Foreign Workers in Canada: Are They Really Filling Labour Shortages?

This document is controversial

Date

2014-04-24

Authors

Dominique M. Gross

Abstract

Between 2002 and 2013, Canada eased the hiring conditions of TFWs several times, supposedly because of a reported labour shortage in some occupations, especially in western Canada. By 2012, the number of employed TFWs was 338,000, up from 101,000 in 2002, yet the unemployment rate remained the same at 7.2 percent. Furthermore, these policy changes occurred even though there was little empirical evidence of shortages in many occupations. When controlling for differences across provinces, I find that changes to the TFWP that eased hiring conditions accelerated the rise in unemployment rates in Alberta and British Columbia.

Series title

CD Howe Institute: Commentary 407

Document number

Commentary 407

Responsible institution

CD Howe Institute

Notes

"Between 2002 and 2013, Canada eased the hiring conditions of TFWs several times, supposedly because
of a reported labour shortage in some occupations, especially in western Canada. By 2012, the number of
employed TFWs was 338,000, up from 101,000 in 2002, yet the unemployment rate remained the same at
7.2 percent. Furthermore, these policy changes occurred even though there was little empirical evidence of shortages in many occupations" (p.1)
This statement suggests that TFW are preferred to Canadians since they are less expensive and more docile.

"Ideally, a TFW program offers employers access to an indispensable
temporary workforce until domestic workers become available. Employers thus should regard foreign workers as available only for a short
period, and not attempt to use the program as a way to circumvent the search for and hiring of domestic workers.20 A successful TFW program thus should encourage employers to attract and train domestic
workers for jobs that are permanent, possibly with federal government help, so that the labour market exhibits a better balance in the medium term. The current Canadian program, however, still falls short
of this goal" (p.22).

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