Temporary foreign workers in Canada, explained

Much has been written about temporary foreign workers in Canada in recent months. A new study looks at 2021 tax data (the most recent year for which data are available) to explore the role temporary foreign workers play in the Canadian economy and workforce.

Temporary foreign worker program began half a century ago to address labour shortages

Temporary foreign workers have been coming to Canada through various programs since the early 1970s.

These programs have expanded rapidly in recent years, with the number of temporary residents working in Canada more than doubling in a decade, rising from 356,000 in 2011 to 845,000 in 2021.

Some temporary foreign workers come exclusively to work

Temporary foreign workers are exactly that, people from around the world who come to live and work in Canada for a set period of time; often in a specific field; sometimes only for a season—as is the case with those who come to toil on farms over our short growing season.

The Temporary Foreign Worker Program (TFWP) recruits people exclusively to ease short-term labour shortages. The share of temporary foreign workers arriving under the TFWP has fallen from just over one in three in 2011 (35%) to one in six in 2021 (15%).

More temporary foreign workers come through study-related permits

Temporary foreign workers can also arrive through various work programs under the International Mobility Program (IMP). Some IMP programs allow successful applicants to study at a Canadian university or college, apprentice in a trade, or work post-graduation. In addition, most study permit holders are also allowed to work a predetermined number of hours to gain experience and supplement their income while they live in Canada.

In 2021, three in five temporary foreign workers (60%) were here under study-related programs— including all current study permit holders, those who participated in the Post-graduation Work Permit program, and spouses of study permit holders—up from roughly one in four in 2011 (24%). Study-related programs accounted for 88% of the growth in the number of temporary foreign workers from 2011 to 2021.

Not all work permit holders work, and most of those who work hold lower-paying jobs

Most of the temporary foreign workers who came to Canada via the TFWP (87%) reported employment income in 2021, compared with just over two-thirds of those who arrived under the IMP for work purposes (69%).

Most temporary foreign workers who came to Canada under the TFWP (78%) and the IMP for work purposes (71%) in 2021 made less than the median annual Canadian income of $42,000. Approximately half of the temporary foreign workers holding only study permits earned $6,000 or less in 2021.

One reason for the relatively lower earnings of temporary foreign workers is their prevalence in lower-paying jobs. For example, almost one in five temporary foreign workers (17%, or 140,000 people) were working in the food services and accommodation sector in 2021.

Temporary foreign workers a growing source of labour

Approximately 1 in 25 people working in Canada in 2021 were temporary foreign workers (4.1%), up from 1 in 50 a decade earlier (1.9%).

Temporary foreign workers play a critical role on Canada’s farms, and accounted for close to 1 in 5 (17%) employees in the agriculture, forestry, fishing and hunting sector in 2021. They also play an important role in food services, accounting for about 1 in 10 employees in the accommodation and food services sector.

Temporary foreign workers also play an important role in other industry sectors such as transportation and warehousing, retail trade, and manufacturing.

Almost one in three temporary foreign workers who have arrived since 2010 became permanent residents by 2022

Some temporary foreign workers eventually transition to permanent residency, commonly referred to as two-step selection—that is, they are first selected by employers for a temporary job, and some are later selected to become economic immigrants.

Just under one-third of the temporary foreign workers (31%) who arrived in Canada since 2010 had received permanent residency by 2022.

Indeed, temporary foreign workers have become a major source of economic immigrants, with the share of former temporary foreign workers among new economic immigrants rising from 8% in 2000 to 46% in 2019 and 49% in 2022.

Although many temporary foreign workers may start out at low-paying jobs, over one-third (38%) of those who became economic immigrants reported pre-immigration earnings above the national median earnings in 2022, up from just under one-quarter (24%) in 2000.

Further reading

For further reading, check out the report Foreign workers in Canada: Industry retention after transitioning to permanent residency among work permit holders for work purposes.