Evaluation of the Temporary Foreign Worker Program

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List of figures

List of tables

List of acronyms and abbreviations

ESDC
Employment and Social Development Canada
HUMA
Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities
LMIA
Labour Market Impact Assessment
NOC
National Occupational Classification
SAWP
Seasonal Agricultural Worker Program

Introduction

The Evaluation of the Temporary Foreign Worker Program was developed based on the knowledge gained from the last evaluation (presented in Annex A) and significant reforms to the program made in 2014.

The evaluation covers the portion of the program that is administered by Employment and Social Development Canada (ESDC) for the period from 2011 to 2018. However, the most recent data is provided where relevant. It focusses on the following issues:

Figure 1: Evaluation scope

Key evaluation results summary

Key findings

  1. The program plays a crucial role in helping Canadian employers temporarily fill different types of labour needs that are most commonly recurrent and that employers prove unable to meet using other means
  2. The program helps protect jobs for Canadians and permanent residents, and can contribute to job creation and economic growth in some sectors
  3. Overall, there is no evidence pointing to a risk for job displacement or wage suppression at the national level in Canada. In 2019, temporary foreign workers represented only 0.49% of the total labour force in Canada.Footnote 2There is, however, evidence of varying factors affecting employment and working conditions in localized labour markets. This points to some risk of job displacement or wage suppression in some specific sectors, occupations and regions
  4. Important challenges related to the Labour Market Impact Assessment (LMIA) process and related requirements may hinder the effectiveness of the program for some program users
  5. Administrative and financial barriers associated with using the program may explain why some employers do not use the program. It should be noted that other comparable employers in similar situations use the program
  6. The program contributes towards ensuring that qualified Canadians or permanent residents are considered first for current job opportunities
  7. The transition plans required from employers who apply through the High-Wage Stream encourage some of them to support the foreign workers’ transition to permanent residency
  8. Findings suggest that transition plans do not reduce employers’ need for the program

Recommendations

  1. Better engage employers and key stakeholders on the objectives of the program
  2. Explore alternative approaches for application-based processing for returning or frequent program users who maintain good track records in the program
  3. Clarify processes to help program officers assess labour market impacts and shortages more consistently

Program background

The Temporary Foreign Worker Program is legislated through the Immigration and Refugee Protection Act and Immigration and Refugee protection Regulations. One of the key objectives of the program is to provide Canadian employers with access to temporary foreign workers when qualified Canadians or permanent residentsFootnote 3 are not available.

Figure 2: Temporary Foreign Worker Program timeline

The recruitment of foreign workers in Canada dates back to the 1960s. The Seasonal Agricultural Worker Program was first established in 1966 with the main focus on the agricultural industry. In 1973 the federal government put in place the Temporary Foreign Worker Program which focused on hiring high-skilled foreign labour. The Live-in Caregiver Program was introduced in 1992 with a key requirement that the caregiver must live with the hiring family. The program’s focus was further widened in 2002, adding the low-skilled workers’ component. Since then, the program has been expanding, reaching its peak in 2013 when 162,400 temporary foreign worker positions were approved under the program. In June 2014, the federal government announced reforms to the program, restructuring it into 2 distinct programs:

The Temporary Foreign Worker Program is jointly administered by Employment and Social Development Canada, Immigration, Refugees and Citizenship Canada and the Canada Border Services Agency.

Budget 2017 proposed an investment to support the continued delivery and improvement of the Temporary Foreign Worker Program and the International Mobility Program. The investment builds on Canada’s new Global Skills Strategy, which aims to facilitate the temporary entry of high-skilled international talent.

The Temporary Foreign Worker Program is a small proportion of the overall labour market.

Figure 3: Composition of the labour force (2018)

Labour Market Impact Assessment (LMIA) application requirements and assessment

Key findings

Supporting employer needs

1. Between 2013 and 2016, there is a downward trend (46%) in the number of positions approved under the Temporary Foreign Worker Program. This is followed by an increase of 35% between 2017 and 2019

Figure 4: Total number of temporary foreign worker positions approved (2013 to 2020)Footnote 6

Figure 5: Total number of temporary foreign worker positions approved, by stream (2013 to 2020)

2. A majority (53%) of employers indicated that they need the program to fill labour shortages

Figure 6: Proportion of employers who indicated that the hiring of temporary foreign workers will fill labour shortages, by stream (2011 to 2018)

Figure 7: Proportion of employers who indicated that the hiring of temporary foreign workers will fill labour shortages, by year and stream (2011 to 2018)

3. Survey respondents from all streams applied to the program on average 3 times between 2015 and 2020

Figure 8: Average number of applications submitted by survey respondents (unique employers), by stream (2015 to 2020)

4. The level of satisfaction with the timeliness of the response to applications varies by stream with 50% to 60% not being satisfied

Figure 9: Percentage of respondents who were satisfied or very satisfied with the timeliness of the response to their application (n=505)

Figure 10: Average number of weeks required before obtaining the Labour Market Impact Assessment (LMIA) result, according to estimates provided by survey respondents (n=353)Footnote 8

5. The average number of calendar days required to process LMIA applications reached 61 days in 2018. It was even higher at 82 days for those submitted in the High-Wage Stream

Figure 11: Average number of calendar days required to make a decision on a LMIA application by stream (2012 to 2018)Footnote 9

The 2016 Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities (HUMA) Review also pointed out that the length of time to process the Labour Market Impact Assessment applications across the streams was a challenge. The 10 business day processing service standard for high-demand occupations introduced in 2014 was not always met.

Table 1: Average Labour Market Impact Assessment processing times for February 2021
Stream Average LMIA processing time for February 2021
Global Talent Stream 13 business days
Agricultural Stream 21 business days
Seasonal Agricultural Worker Program 14 business days
Permanent Residence Stream 21 business days
High-Wage Stream 32 business days
Low-Wage Stream 33 business days
In-home caregivers 15 business days

6. According to Service Canada key informants, a combination of factors explain why processing times have been increasing and can continue to fluctuate over time

In 2021, the House of Commons Standing Committee on Citizenship and Immigration also pointed out that:

The committee also noted a need to improve:

Some suggestions made by external stakeholders to reduce the administrative burden associated with the LMIA process include:

Sources: ESDC’s key informant interviews (2020). Parliament of Canada, Standing Committee on Citizenship and Immigration (2021).

7. Employers note a reluctance among Canadian workers to apply for jobs in certain streams

Table 2: Top 4 reasons why Canadian workers were not interested in applying for the positions offered by the employers
Why not Canadian workers? Percentage of survey respondents
Hard work/physical labour 37%
Non-standard work schedule 27 %
Remote location 24 %
Uninteresting work (for example, repetitive) 21%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Other reasons
Why not Canadian workers? Percentage of survey respondents
Temporary/seasonal job 19 %
Low wage 19 %
Poor working environment 18 %
Low hours 5 %

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Figure 12: Proportion of employers who indicated that Canadians are not interested, available or qualified, by stream

Sector sustainability

8. The vast majority (92%) of employers who hired temporary foreign workers reported that it helped them meet demand for their products or services

Figure 13: Percentage of employers who reported that hiring temporary foreign workers improved their organization's ability to do the following, to a large or very large extent (n=288)Footnote 10

9. There were negative implications for 76% of employers who obtained a negative Labour Market Impact AssessmentFootnote 11

Figure 14: Percentage of respondents who reported that not being able to hire foreign workers had a negative impact on their ability to:

10. More than half (55%) of the employers who were not authorized to hire some or any temporary foreign workers had to ask their current employees to work overtime to compensate

Figure 15: As a result of not being able to hire foreign workers, did any of the following occur? (n=75)

Job displacement and wage suppression

Background

An inherent concern associated with immigration policy at-large and the Temporary Foreign Worker Program specifically, is their impacts on the domestic labour markets (at the national and/or local level). The premise for these concerns is typically rooted in the view that immigrants are competing with domestic workers over a fixed number of jobs. Based on this premise, immigrants would potentially:

These concerns generally align with basic inferences from the standard theoretical model of supply-and-demand. In this model, an increase in the labour supply leads to lower wages for all workers (Constant, 2014).

However, this type of inference is often viewed as overly simplistic, since it omits a number of key considerations (Mukhopadhyay and Thomassin, 2021, Banerjee and Duflo, 2019, Somerville and Sumption, 2009). For instance:

Taken together, these considerations suggest that immigrants lead to an increase in both the labour supply and labour demand. As per the standard theoretical model of supply-and-demand, both increases are associated with offsetting effects on wages and employment. Which effect dominates becomes an empirical question.

Most of the empirical research in this area focuses on the impact of immigration (or permanent migrants) on the wages and employment of domestic workers. On the impact of temporary migrants on the labour market of the host country, the literature is limited (Mukhopadhyay & Thomassin, 2021). In the particular case of the Temporary Foreign Worker Program, not enough empirical research has been conducted to inform a definite answer on these questions (Mukhopadhyay & Thomassin, 2021).

Definitions

Job displacement: Displaced workers are workers who permanently lost a stable job in the last few years and who are currently unemployed, out of the labour force or re-employed (Organisation for Economic Co-operation and Development).

Wage suppression: Wage suppression occurs when downward pressure is put on domestic wages – thereby keeping them low. This is sometimes attributed to firms offering lower wages than they would otherwise in order to maximize their use of the Temporary Foreign Worker Program.Footnote 12

From an empirical perspective, assessing the impact of temporary foreign workers on domestic labour markets is very complex. It involves many observable and unobservable contributing factors. The impact of temporary foreign workers on the national and local labour markets depends, in part, on:

Other factors, often unobservable such as language barriers, local/organizational norms and culture, and motivation may also affect these decisions. Exacerbating the challenge with the conduct of such an empirical analysis is the small number of temporary foreign workers relative to the size of the Canadian labour force. Even at the regional and industry level, where the incidence of temporary foreign workers among labour force participants is relatively higher, disaggregate labour market information would be subject to variability due to small sample sizes. Furthermore, approaches to isolate the impact of temporary foreign workers inherently involve the estimation of how national and local labour markets would have adjusted in the absence of temporary foreign workers. This is not observed and therefore remains subject to debate.

For these reasons, no advanced empirical analysis was conducted as part of this evaluation. Instead, the Evaluation Directorate commissioned two research projects to assess potential impacts of the Temporary Foreign Worker Program’s Low-Wage Stream on the Canadian labour market. The research has a focus on the potential suppression of Canadian wages and displacement of Canadian workers. This research takes advantage of the newly available linkages between Temporary Foreign Worker Program data and the Canadian Employer-Employee Dynamics Database. The creation of this new consolidated dataset is the result of efforts from ESDC's Evaluation Directorate in collaboration with the Chief Data Officer, Immigration, Refugees and Citizenship Canada, and Statistics Canada. It is meant to enable this type of research work, policy analysis and future evaluations (for more details, see Annex D). Due to COVID-19, these research projects were delayed and are expected to be completed in 2022. They will shed more light on the complex questions of job displacement and wage suppression. Once completed, the research reports will be available upon request.

As a complementary effort, this evaluation aims at contextualizing the potential risk of wage suppression and job displacement. This was done by gathering information mainly through qualitative lines of evidence (for example a survey, key informant interviews and focus groups) and descriptive quantitative data analysis. Information gathered as part of this evaluation may help inform specific policy design features of the program. However, it is not sufficient to draw specific and definitive conclusions on these 2 labour market issues.

Summary of evaluation findings on job displacement and wage suppression

Job displacement – No risk

11. Approximately 38% of employers perceived that Canadian workers are either not interested, available or qualified for the job opportunity

Figure 16: Challenges faced by employers who tried to recruit Canadian workers

Survey respondents reported that the Canadians who applied were not hired because of the following factors:

Table 3: Reasons why Canadians were not hired
Reasons why Canadians were not hired Percentage of respondents
The lack of previous experience 28%
The lack of work ethics demonstrated by the candidate 24%
The candidate eventually lost interest in the job 23%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

12. Only 12.6% of Canadian job seekers viewed potential job matches on the Job Bank between 2015 and 2018. This suggests low interest in jobs occupied by foreign workers

Figure 17: Actions taken by Canadian job seekers whose profile was matched with the job posted on the Job Bank (on average between 2015 and 2018)

13. Approximately 73% of employers who received a negative LMIA decision experienced continued difficulties in finding Canadians to fill positions
Table 4: Proportion of employers who were able to fill positions versus those who could not
Ability to fill the positions with Canadians Percentage of employers who received a negative LMIA decision
Were unable to fill the positions with Canadians 42.6%
Were able to fill some of the positions with Canadians 30.4%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Table 5: Efforts made to try to recruit Canadians after the negative LMIA decision
Efforts made to try to recruit Canadians after the negative LMIA decision Percentage of employers
Posted the job on another platform 88.5%
Tried to advertise the position more actively 64.1%
Offered training to Canadians 56.4%
Increased the wage offered 51.3%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

14. Only 12% of surveyed employers believe that the program has a negative impact on Canadian workers related to job displacement

Surveyed employers believe that the hiring of temporary foreign workers:

Table 6: Program’s negative impacts related to job displacement
The hiring of temporary foreign workers: Percentage of surveyed employers
Leads to not hiring Canadians 9%
From the time when the pandemic started temporary foreign workers are taking jobs that Canadians might want 1%
Leads to Canadian workers being laid off (before temporary foreign workers) 1%
Causes employers to rely on temporary foreign workers even when Canadians are available 1%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Source: ESDC’s key informant interviews 2020.

The analysis of administrative data revealed that the vast majority of employers attempted to hire Canadians first over the years.

Figure 18: Employers attempting to hire Canadians or permanent residents first, by year (2011 to 2018)

Wage suppression – No risk

15. A very small proportion (0.49%) of the labour force in Canada is comprised of temporary foreign workers

Source: ESDC’s customized tables using Labour Force Survey and LMIA data.

Sources: ESDC’s key informant interviews 2020, ESDC’s focus groups 2020 and Mukhopadhyay and Thomassin (2021).

Table 7: Pay differences between Canadian workers and foreign workers
Foreign workers were paid: Percentage of surveyed employers
The same as Canadian workers doing similar or equivalent tasks 85%
More than Canadian workers 6.5%
Less than Canadian workers Only 3.5 %

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Sector/industry example

16. Evidence from the analysis of top wage earners in Atlantic fish and seafood plant and processing workers points to no risk for wage suppression

Figure 19: Average top hourly wages by employment of temporary foreign workers

Job displacement – Some risk

17. Approximately one third of key informants and between 66% and 75% of survey participants indicated that there may be preferences to hire foreign workers. In the long term, this is attributed to some risk for job displacement

A majority (66% to 75%) of survey respondents who have hired temporary foreign workers (n=339) indicated that in comparison to Canadian workers, temporary foreign workers are:

Table 8: Employers’ preferences to hire foreign workers
In comparison to Canadian workers, temporary foreign workers are: Percentage of respondents
More reliable 75%
More likely to stay with the organization after being hired 73%
More hard working 72%
More willing to take training needed for the job 66%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Sources: ESDC’s key informant interviews 2020 and focus groups 2020.

18. Some key informants and focus group participants indicated that worker displacement may be occurring in some sectors

Figure 20: Proportion of temporary foreign workers, selected industries (North American Industry Classification System subsectors), 2017

Sources: ESDC’s focus groups 2020 and ESDC’s Key informant interviews 2020.

19. Only 34% of employers viewed potential job matches of Canadian applications between 2015 and 2018. This may indicate a reduced effort to hire Canadians and may signal very low program compliance

Figure 21: Actions taken by employers for each Job Bank posting matched with the job seeker's profile (average between 2015 and 2018)

20. More than half (53%) of all survey respondents said that they did not make efforts to hire Canadians with disabilitiesFootnote 19 and 46% did not try recruiting Canadian vulnerable youth

The program requires employers to make an effort to hire Canadians from underrepresented groups:

Table 9: Employers’ efforts to hire from underrepresented groups
Efforts made to hire from underrepresented groups Percentage of all survey respondents
Tried to recruit Indigenous Canadians 57%
Actually hired Indigenous Canadians Only 7%
Tried to recruit new Canadians 60%
Recruited new Canadians 16%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Wage suppression – Some risk

Sector/industry example: 1
21. In 2018, approximately 66% of temporary foreign worker agricultural positions were paid lower than the occupations’ provincial median wagesFootnote 20

Figure 22: Percentage of temporary foreign worker positions that received positive Labour Market Impact Assessments, by stream (2012 to 2019)

Sector/industry example: 2
22. Since 2016, the majority of temporary foreign worker carpenter positions in British Columbia and Ontario were paid well above their respective regional and provincial median wage levels. These temporary foreign workers’ wages grew by roughly 1% since 2016

Figure 23: Provincial median wage among temporary foreign workers versus Canadians, carpenters (2016 to 2019)

Sector/industry example: 3
23. Evidence from the analysis of starting hourly wages of Atlantic fish and seafood plants and processing workers points to some risk for wage suppression

Figure 24: Average starting hourly wages by employment of temporary foreign workers

24. Some focus group participants and key informants including foreign workers identified cases or situations pointing to some risk for wage suppression

Sources: ESDC’s key informant interviews 2020 and ESDC’s focus groups 2020.

25. Some key informants pointed out that the program demonstrates some risk for wage suppression in specific sectors, occupations and regions

Source: ESDC’s key informant interviews 2020.

Wage suppression – Considerations

26. Surveyed employers indicated reasons for differences in wages paid to foreign workers and to Canadians

Figure 25: Reasons why wages paid to foreign workers were different than those paid to Canadian workers in similar or equivalent positions

27. Stakeholders outlined some factors that may unintentionally affect wages in Canada

Source: ESDC’s key informant interviews 2020.

Transition plans

28. The vast majority of employers (86%) who submitted a Transition Plan have supported their foreign workers to become permanent residents

Figure 26: Which of the following have you done as part of your transition plan?Footnote 25

29. The Transition Plans do not generally reduce or eliminate the need for foreign workers

Figure 27: How successful has the transition plan been in progressively reducing the need for your organization to hire temporary foreign workers?Footnote 26

30. Program stakeholders indicated that the transition plans are not effective and add unnecessary administrative burden

Source: ESDC’s key informant interviews 2020.

Management response and action plan

Overall management response

Management accepts the recommendations outlined in the Evaluation of the Temporary Foreign Worker Program and will be engaging in further analysis on how its findings can inform ongoing adjustments to program design and delivery. Insights gained through the evaluation’s lines of evidence, including the perspectives of employers and other key stakeholders, have confirmed the importance of program changes made in recent years and provide additional insights for considerations going forward. Significant efforts were already in progress during the time of the evaluation to address highlighted areas of focus, including communication and service improvements for employers and enhanced processes for assessing labour market conditions and other program requirements. The program will strive for continuous improvement across all ESDC branches engaged in its design and delivery moving forward.

Recommendation 1

Better engage employers and key stakeholders on the objectives of the program.

Management response

Management agrees with the recommendation. The Temporary Foreign Worker Program works on an ongoing basis to strengthen communication of its objectives and requirements for program users, in addition to seeking out the perspectives of its diverse stakeholders to inform adjustments to policies and service delivery. In recent years, this has included updates to public information on evolving program rules and conditions, in addition to comprehensive stakeholder consultations undertaken during targeted sector reviews and the design of the Migrant Worker Support Network. More recently, the program’s response to COVID-19 has included the rapid provision of information on public health conditions and program requirements for employers and workers.

The program accepts the evaluation findings that point to areas for continued improvement in the communication to key stakeholders of its overarching objectives and its specific function within the broader range of temporary immigration options available to foreign workers and their employers. Going forward, the program will continue to strengthen the clarity and transparency of its public information resources, and look for ongoing opportunities for dialogue with key stakeholders, including employers, industry associations, foreign and Canadian workers, migrant worker support organizations, unions/labour groups, foreign governments and other observers.

Management Action Plan

Actions Planned

1.1 Throughout the 2021 to 2022 fiscal year, ESDC’s Program Operations Branch will undertake key activities to improve the Temporary Foreign Worker Program client experience and accessibility through a comprehensive employer and stakeholder outreach plan. The objective of these activities is to ensure that information regarding the Temporary Foreign Worker Program is clear, consistent and frequent. A key focus will be website optimisation for the external user experience.

Activities include:

  • improvements to the Temporary Foreign Worker Program landing page for improved client experience and ease of navigation
  • enhanced Labour Market Impact Assessment (LMIA) online promotion through the web, and
  • updates to the Global Talent Stream web pages including information architecture and web content

In addition, ESDC’s Skills and Employment Branch will undertake the posting of Temporary Foreign Worker Program policies on the Open Government website (subject to internal web development capacity prioritised for COVID-19 demands).

Completion date

In progress.

Actions planned

1.2 Throughout 2021 to 2022 and moving forward, both the Program Operations Branch and the Skills and Employment Branch will continue dialogue with industries making the highest use of the Temporary Foreign Worker Program, including the agriculture and agri-food sector. The Canadian Federation of Agriculture working group provides a critical venue for industry to raise short-term and long-term service delivery issues and potential solutions, and work with departmental representatives to support implementation of administrative solutions. The breadth of potential service delivery issues could extend to any aspect of the Temporary Foreign Worker Program, including the processing of LMIAs, work permits, and the Temporary Foreign Worker Program integrity regime, amongst others. The service delivery working group is comprised of industry representatives and departmental officials from ESDC, Service Canada, Immigration, Refugees and Citizenship Canada, and Agriculture and Agri-Food Canada. Meetings provide a critical venue to promote transparency and consistency through proactive consultation, co-creation of communication materials, triaging of critical employer concerns, and providing operational recommendations for solving continuing employer concerns.

This working group co-develops effective communications materials, assists with industry outreach regarding any forthcoming program changes, and provides operational recommendations for solving continuing employer concerns. The working group also provides a venue for ongoing industry feedback into the recently announced service standard review to assist in the development of relevant communications and broader industry consultation.

The ultimate objective of the working group is to provide a mechanism for proactive consultation, supporting transparency, fairness and efficiency through a more client-centric approach to Temporary Foreign Worker Program Service Delivery that seeks to reduce administrative burden and resources required for all parties, while maintaining the intent and integrity of the program.

Completion date

Ongoing.

Actions planned

1.3 ESDC will continue to proactively engage stakeholders to inform required adjustments to the Temporary Foreign Worker Program on an ongoing basis. This will include targeted meetings, roundtables and other fora for dialogue on key initiatives, such as consultations on a proposal for minimum requirements for employer-provided accommodations and implementation of the Migrant Worker Support Program. ESDC will also increase the number of engagement sessions offered to employers to help strengthen their understanding of program rules and their obligations, with a view to improving overall program compliance.

Completion date

Ongoing.

Recommendation 2

Explore alternative approaches for application-based processing for returning or frequent program users who maintain good track records in the program.

Management response

Management agrees with the recommendation. The potential benefits of a reduced administrative burden for employers with proven records of compliance (and potentially other eligibility criteria), has been proposed in previous years and remains a concept under exploration by the Temporary Foreign Worker Program. The evaluation’s findings that this continues to hold support among employers is consistent with ongoing dialogue with stakeholders and will be factored into considerations.

In the interim, the program continues working to enhance the service provided to employers and to reduce LMIA processing times. This includes the LMIA online electronic application tool introduced in July 2019 to optimize the employers' service experience. The online platform provides employers with:

The employer’s service experience was further enhanced through the introduction of the ability to copy past LMIA online applications in July 2020. This new feature improves user efficiency for employers that submit multiple applications by allowing them to retrieve, duplicate and modify past LMIA applications.

Management action plan

Actions planned

2.1 Improved load and restoration times of the online system to further improve the employer’s service experience using the Temporary Foreign Worker Program.

Completion date

April 2021.

Actions planned

2.2 Potential stakeholder consultations focused on the exploration of an alternative Temporary Foreign Worker Program model for employers with proven records of compliance.

Completion date

To be determined.

Actions planned

2.3 Analysis of stakeholder input received on potential alternative models to inform next steps if applicable.

Completion date

To be determined.

Recommendation 3

Clarify processes to help program officers assess labour market impacts and shortages more consistently.

Management response

Management agrees with the recommendation. The Temporary Foreign Worker Program recognizes the importance of assessing labour market shortages in the development of a LMIA decision and continuing to ensure that Canadians and permanent residents have first access to available jobs.

Between January and July 2019, the Temporary Foreign Worker Program tools used to support the assessment of a LMIA application underwent a major review and overhaul. The goal of the review was to amend all guidance related to the LMIA application assessment to align with the desk-aid, policy updates, and to address issues identified during Quality Management calibration sessions.

With the goal of improved efficiency, when warranted, content was restructured to flow logically and duplicate information was removed. The review was comprehensive and included consultation with Quality Management, Business Expertise, Systems, the four operational regions and the Employer Contact Centre. In addition, the Skills and Employment Branch provided policy clarification as required.

The review culminated in the July 2019 launch of 21 modified directives, desk-aids to support documentation of the assessment, modified LMIA System assessment screens and modified application forms.

Clarity regarding how to determine if the outcome of the assessment will have a positive, neutral or negative impact on the Canadian labour market was added to the global assessment and to 4 of 7 labour market factors.

At the same time, the program recognizes that there are limitations to the timeliness and granularity of available labour market information and other information, and that the evaluation of labour market impacts necessarily involves a certain degree of qualitative assessment and judgement by program officers. The updated directives and tools are intended to increase the consistency and quality of decisions made by officers, rather than to provide definitive guidance.

Management action plan

Actions planned

3.1 A recent labour market assessment tool had been developed as a framework that combines various labour market indicators to aid in the assessment of recent local labour market conditions. The data for this tool comes from the Labour Force Survey, the 2016 Census of Population, Job Vacancy and Wage Survey and Employment Insurance administrative data. The tool was ready to be launched and made publicly available in spring 2020 on a pilot basis.

The COVID-19 pandemic has unfortunately disrupted the collection of key data that the tool relies on. This presents two challenges. First, COVID-related delays in accessing data provided by Statistics Canada have left the information in the tool severely out of date. Second, given that much of the data used can have time lags of months or years (even in normal times), the tool is less reliable as a comparative resource in this current period of major labour market disruption. The program is working with labour market information experts on an ongoing basis to reintroduce the tool at an appropriate time.

Current Temporary Foreign Worker Program policies already outline consideration of information from additional sources, including, but not limited to, available labour market information from organized labour groups, Statistics Canada reports, departmental labour market assessments or projections, as well as those from other government departments or levels of government, sector council/industry associations, and professional associations, among others.

The department will continue to regularly review related policies and operational guidance to ensure that non-employer labour market information is carefully weighed for every application in determining whether or not available jobs can be filled by Canadians or permanent residents.

Completion date

In progress.

Actions planned

3.2 Program guidance was developed to assist program officers assess labour market impacts and shortages for primary agriculture streams. Guidance included priority processing, recruitment, labour market impact assessment validity, housing inspection report, national commodity list, and acceptance for the submission of applications.

Probing questions guidance provided the ability to address high-risk strategic targets to assist program officers assess labour market impacts and shortages consistently for the agricultural stream. 

An update to operational directives and desk-aids provided program officers with clear direction on when it is acceptable for employers to request workers with no specific language.

Completed date

February 2021.

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Prism Economics and Analysis for the Food Processing Skills Council. Atlantic Fish + Seafood Processing Workforce Survey Report, June 2018. (Available on demand)

Report 5, Temporary Foreign Worker Program, of the Spring 2017 Reports of the Auditor General of Canada. Report of the Standing Committee on Public Accounts. Retrieved from: http://publications.gc.ca/collections/collection_2017/parl/xc16-1/XC16-1-1-421-35-eng.pdf

Somerville, W. and Sumption, M. (2009). Immigration and the Labour Market: Theory, Evidence and Policy, Equality and Human Rights Commission. Retrieved from: https://www.migrationpolicy.org/pubs/Immigration-and-the-Labour-Market.pdf

Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities (HUMA) (2016), Temporary Foreign Worker Program. Report of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. Retrieved from: https://www.ourcommons.ca/DocumentViewer/en/42-1/HUMA/report-4/

Worswick, C. (2013). “Economic Implications of Recent Changes to the Temporary Foreign Worker Program”, IRPP Insight, October 2013, No.4, pp. 5-8. Retrieved from: https://irpp.org/research-studies/economic-implications-of-recent-changes-to-the-temporary-foreign-worker-program/

Worswick, C, et al. (2017). Issues Related to the Likely Impact of Temporary Foreign Workers on Wages in the Canadian Labour Market. (Available on demand)

Worswick, C, et al. (2018). ESDC Workshop Report, “Assessing the Implications of Temporary Foreign Workers for the Canadian Labour Market.” (Available on demand)

Annexes

Annex A – Previous evaluation findings

Source: ESDC, Evaluation of the Labour Market Opinion Streams of the Temporary Foreign Worker Program, Final Report (2013) https://publications.gc.ca/collections/collection_2013/rhdcc-hrsdc/HS28-207-2012-eng.pdf

Annex B – List of evaluation questions

  1. How effective has the Temporary Foreign Worker Program been in addressing the short-term labour needs of firms and Canada’s labour market as a whole?
    1. How is the program helping to fill labour market shortages?
    2. How does the program contribute to firms’ and sector sustainability?
    3. What are the differences between firms that use temporary foreign workers versus those who do not?
  2. To what extent does the Temporary Foreign Worker Program ensure that Canadian citizens and permanent residents are considered first for current employment opportunities?  
    1. What barriers do employers face when trying to recruit Canadian citizens and permanent residents, including underrepresented groups?
    2. How effective are the transition plans required for the High-Wage Stream in reducing reliance on the Temporary Foreign Worker Program?
  3. To what extent does the Temporary Foreign Worker Program have an impact on prevailing wages?
    1. How are wages affected?
    2. Does the program cause wage suppression in the economy or specific sectors?
    3. Is there displacement of Canadian workers?

Annex C – Methodology

The evaluation of the Temporary Foreign Worker Program made use of multiple lines of evidence. Various data collection methods and sources helped address different aspects of the evaluation questions. This approach ensured an adequate data triangulation to support robust evidence-based findings, conclusions and recommendations to the program.

Line of Evidence

Document and literature review
Administrative data review and analysis
Focus groups

Table C-1: Focus groups coverage – Additional information

For accessibility reasons, the information is presented in text format. Consult the PDF version for the full table.

Most participants (about 95%) understood well and were able to provide answers themselves in English. A few questions required translation in the workers’ mother tongue (other than French). This was done by a staff member at the service provider organization where the focus group was held.

The in-person focus groups were held in Ottawa. However, many participants phoned in from across Canada, including from Toronto, Montreal, Calgary, Vancouver and the Maritimes. A number of participants were also representing organizations that had a mandate that is national in scope.

The focus groups included a mix of participants from rural areas and urban centers.

Key informant interviews
Survey of employers
Table C-2: Percentage of population, sample and surveys completed
Stream and/or LMIA result Population (n=83,217) Sample (n=8,239) Actual surveys completed (n=505)
Primary Agriculture Stream 8% 17% 38%
Primary Agriculture Stream – Positive LMIA 7% 15% 37%
Primary Agriculture Stream – Negative LMIA <1% 3% 1%
Low-Wage Stream 60% 28% 28%
Low-Wage Stream – Positive LMIA 51% 13% 15%
Low-Wage Stream – Negative LMIA 8% 14% 13%
High-Wage Stream 27% 32% 20%
High-Wage Stream – Positive LMIA 22% 14% 12%
High-Wage Stream – Negative LMIA 5% 18% 8%
Permanent Residency Stream 6% 24% 15%
Permanent Residency Stream – Positive LMIA 4% 20% 12%
Permanent Residency Stream – Negative LMIA 1% 4% 2%
Total 100% 100% 100%
Total positive 85% 61% 77%
Total negative 15% 39% 23%

Note : based on administrative data.

Key limitations

Annex D – Temporary Foreign Worker Program consolidated data files

Figure D-1: Multiple data files from various government departments consolidated and available through the Canadian Employer-Employee Dynamics Database

Annex E – Additional evaluation findings and observations

Employers’ efforts to hire Canadian workers from the underrepresented groups

Table E-1: Additional reasons for not hiring:
Indigenous Canadians
Reasons stated Percentage of respondents
Did not have the skills, credentials and/or work experiences required for the job 13.3%
Was not aware that jobs seekers from this group were available in my area 9.4%
Persons with disabilities
Reasons stated Percentage of respondents
Assumed that the work could not be done by those with disabilities 49.8%
Was not aware that jobs seekers from this group were available in my area 6.3%
Newcomers
Reasons stated Percentage of respondents
Did not have the skills, credentials and/or work experiences required for the job 26.6%
Did not have Canadian work experience (or not enough) 12.7%
Vulnerable youth
Reasons stated Percentage of respondents
Did not have the skills, credentials and/or work experiences required for the job 19.9%
Was not aware that jobs seekers from this group were available in my area 9.8%

Source: ESDC’s employer survey 2020 (for the period 2015 to 2020).

Key areas for improvement of the LMIA process identified by both internal and external stakeholders

The Foreign Workers System administrative data review and the survey of employers revealed gaps in the quality and comprehensiveness of employer contact information and other information collected during the LMIA process.

Sources: ESDC’s focus groups 2020, ESDC’s key informant interviews 2020 and ESDC’s data analysis (2011 to 2018).

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