Visa Crunch

Canada Is Relying On Temporary Residents To Meet Labour Shortages

According to a Reuters examination of official statistics, Canada is increasingly depending on temporary residents to satisfy its labour force demands, but this situation puts workers at risk and fails to offer wage growth or stability to businesses, warn workers, advocates, economists, and industry groups.

Temporary residents come to Canada on time-limited visas, some of which are attached to certain employers, and are expected to return to their home countries. Although there are methods to become permanent residents, and many people come with the intention of doing so, there are typically major obstacles to overcome.

Issuing temporary visas is considered a quick cure for tight labor markets, and it may help governments to escape the political backlash from a significant number of new permanent immigrants.

However, this tendency has the potential to lower labor standards, which companies may otherwise raise to entice new hires. Economists believe that those having permanent residency status are better positioned to demand improved working conditions. Wage suppression, according to economist Armine Yalnizyan, Atkinson Fellow on the Future of Workers, can diminish the entire population’s buying power and harm economic growth.

According to University of Waterloo economist Mikal Skuterud, it may make much more sense to prioritize immigration of higher-skilled people, who will put downward pressure on the highest-paid workers while employers of lower-paid workers raise wages to entice personnel.

Temporary residents, many of whom are from Asia, Latin America, and the Caribbean, claim that their unstable immigration status exposes them to exploitation.

The programs are an “important tool” for Canada’s economy, according to the country’s immigration minister, but he sees an opportunity for more permanent options.

According to a Reuters examination of government immigration data, the number of people living and working in Canada on a temporary basis has grown faster than the annual number of new permanent residents over the last decade.

Temporary residents outnumbered new permanent residents by more than three to one in 2020; the year before, when Canada established a permanent resident record, it had more than twice as many temporary residents. This expansion has been spurred in part by overseas students, whose numbers have more than doubled in the last decade.

Meanwhile, the number of people in Canada with post-graduate work permits nearly quadrupled between 2012 and 2021. Several international students are permitted to work, subject to certain restrictions, but Canada’s immigration agency says it has no idea how many do.

According to Kathleen Sullivan, CEO of Food and Beverage Canada, some of her members are racing to bring in temporary foreign workers for the first time because they are short on labor. However, she stated that they would prefer stability.

Canada’s immigration system promotes high-skilled occupations, but the country’s labor market also requires people to do lower-skilled work. In the fourth quarter of 2021, Canada’s employment vacancy rate was 5.3 percent, with the highest rate in lodging and food services at 10.8 percent.

According to Statistics Canada, that industry also had the lowest average hourly wage, at C$15.50 ($12.37) late last year.

According to Louis Bontorin, temporary immigrant employees salvaged his family bakery. His goal, though, is to make them permanent. He estimates that all but five of the 60 temporary workers they brought over in five years are staying in Canada. It would make a significant impact if people could obtain permanent status upon arrival, he said. “It truly changes the dynamic of how they plan with their family,” he says.

Canada announced a limited plan last year to make 90,000 temporary residents permanent. As of now, it has granted permanent status to 23,880 people; the immigration agency has stated that further petitions are being processed.

In a January interview, Canada’s Immigration, Refugees, and Citizenship Minister Sean Fraser stated that it may be time to construct a road to permanent status.

Legal Disclaimer: This article is provided for information purposes only.

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