Good morning, everyone.
I call to order meeting number four of the Standing Committee on Citizenship and Immigration.
Pursuant to Standing Order 108(2), we will start the study on economic immigration and labour shortages today, beginning with briefings by the officials.
I would like to welcome three panels of witnesses.
Statistics Canada is represented by Josée Bégin, director general, labour market, education and socio-economic well-being; and Dominique Dionne-Simard, unit head and senior economist, centre for labour market information. Welcome.
We have officials from the Department of Citizenship and Immigration. They are Marian Campbell Jarvis, assistant deputy minister, strategic and program policy; and Matt de Vlieger, director general, immigration. Welcome.
We also have representatives from the Department of Employment and Social Development. They are Philippe Massé, director general, temporary foreign worker directorate, skills and employment branch; and Katie Alexander, executive director, temporary foreign worker program and work-sharing program.
Thank you all for coming today.
Each of you will have 10 minutes for opening remarks. Then we will go into the rounds of questioning.
We will start with Statistics Canada.
Thank you, Madam Chair.
Good morning. Thank you for inviting us to join you as part of your study on economic immigration and labour shortages. We are very pleased to assist you with foundational information today as you begin.
From the motion, it is clear that you will have multiple lines of inquiry, and we are very pleased to assist, including by recommending any witnesses from Immigration, Refugees and Citizenship Canada, or elsewhere, who may be able to help you dig further.
My remarks this morning will focus on the ways in which Canada's immigration system is set up to further economic objectives. This will include an overview of the permanent and temporary resident programming, building on our foundational presentation of a few weeks ago. We'll focus on the elements that are specifically tailored for selecting immigrants on economic criteria.
I will then turn to my colleagues, as noted, from Employment and Social Development Canada, to comment specifically on the temporary foreign worker program, given the committee's specific interest in the labour market impact assessments. My colleagues from Statistics Canada will conclude our remarks here with some of the data focused on trends and projections in the labour market.
Your study focuses on the tightening labour market that Canada is now experiencing and is projected to experience in the future. Demographic factors are driving these trends. The immigration system clearly stands to play a significant role in addressing Canada's labour market needs. It provides two important sources of labour: new permanent residents admitted to Canada and temporary foreign workers.
The other source, of course, is the domestic labour force, both those leaving school to enter the workforce and those getting trained and re-trained for the evolving job market.
With demographic and labour market projections being what they are, the reality is that, even if all measures were taken to maximize the domestic work force, a robust immigration system would still be needed. In fact, immigration already accounts for almost 100% of labour force growth today. That is a significant figure. Immigration is definitely connected with addressing labour shortages. However, immigrants should not be thought of narrowly only as workers filling a present need. They are future citizens, here for the long term, and their children will become the second-generation contributors to future labour markets.
While there are immediate labour market needs, we also take a long view with the immigration system. I emphasize the words “long view”, because that is really important.
The next area of economic immigration is permanent residence. The largest of our economic programs are based on long-standing human capital criteria, sometimes referred to as the Canadian “points system”, which are now administered through express entry. This means that not only do economic immigrants arrive here quickly—the service standard is six months or less—but they are also among the best-scoring candidates from a large pool of candidates. Almost half of the economic-class admissions in 2018 were through express entry. Outcomes are particularly strong for this group, as 95% are employed one year after admission, income is about 20% higher than that of immigrants admitted prior to the express entry process, and 83% report working in their primary occupation.
The next largest component of the economic immigration system is the provincial nominee programs, which are geared toward distributing the benefits of immigration across Canada and meeting specific regional and labour market needs prioritized by the provinces. Quebec administers its own economic selection program under the Canada-Québec Accord.
Recently, with a view to spreading the benefits of immigration, the government introduced new pilot programs to test new approaches to immigrant selection and retention. These include the Atlantic immigration pilot, which uses an employer-settlement focused model; the rural and northern immigration pilot, which uses a community economic development model right now in 11 communities across Canada; and the agri-food immigration pilot, which experiments with a particular sector-driven approach. These are about innovating so that the immigration system continues to meet both general and more targeted objectives, including labour force and economic objectives. The municipal nominee program, which is a mandate commitment of the minister, is a further opportunity to innovate within the system.
To round out the overview of our economic immigration programming, we also have more targeted programs like the start-up visa program, which is targeted at entrepreneurs to come into Canada and start up an opportunity. The caregiver program, as I think many on the committee know, is a long-standing pathway, though with several adaptations over recent years.
I'll just say a word on some of the numbers. Through the immigration levels plan tabled annually in Parliament, you will note that permanent resident admissions have been climbing steadily in recent years. Admissions now stand at approximately 340,000, whereas five years ago they were routinely in the neighbourhood of about 270,000 admissions. The economic-class numbers have climbed in step with that, comprising almost 60% of the total immigrant admissions. The economic targets are 195,800 for 2020. In 2021 they will be about 202,000. Most of the principal applicants being admitted through the economic class meet Canada's high-skilled needs. In 2018, 81% were in the higher-skilled occupations. That breaks down to about 37% in the professional occupations, 13% in managerial positions, and 30% in skilled and technical skill levels.
Obviously, temporary foreign workers are another source of labour supply. This is largely a demand-driven area, by which we mean that employer demand to hire workers on a temporary work permit can fluctuate and drive the numbers, as opposed to a target set by government. Here too the numbers are up. In fact, the number of temporary work permits issued in 2019 was about 405,000, up by about 20% from 2018.
With respect to temporary workers, there are two broad streams of programming. One is the temporary foreign worker program, which is administered by ESDC colleagues, and the international mobility program, which is administered by Immigration, Refugees and Citizenship Canada. I'll conclude my remarks with a few words on the international mobility program before turning to ESDC on the temporary foreign worker program.
Under the umbrella of the international mobility program are several streams that have the common feature of not requiring a labour market test because of the other policy goals they target. The largest categories here are former international students entitled to work for a period after graduation; foreign youth in Canada under bilateral youth mobility; and workers covered by trade agreements, such as CUSMA, and inter-company transfers.
I'll end my remarks there and turn to ESDC on some of the temporary labour market programs.
Thank you for the opportunity to present on the Temporary Foreign Worker Program. As mentioned earlier, I am the director general. With me is Katie Alexander, who is responsible for program operations at Service Canada.
The objective of the program is to provide employers with access to foreign workers on a temporary basis when qualified Canadians or permanent residents are not available. It also aims to ensure that foreign workers are protected while in Canada.
In 2019, Employment and Social Development Canada approved approximately 120,000 positions under the program. The program has a very small footprint in the labour market in general. Less than 2% of all Canadian businesses use the program and temporary foreign workers comprise less than 1% of the Canadian labour force.
However, it is very important to certain sectors that tend to face recurring labour needs, including the agriculture and agri-food, tourism and hospitality sectors. It is also important in supporting the growth of emerging sectors, such as digital media, environmental technologies and artificial intelligence.
The global skills strategy, for example, which became permanent in 2019, seeks to streamline the process for businesses to be able to attract and retain the talent they need. To date, more than 60,000 people have come to work in Canada under this program, with many in key information technology and engineering occupations.
In seeking to address labour and skills shortages, the program also strives to balance the interests of Canadian workers and the protection of foreign workers. To ensure that Canadians continue to have the first opportunity at available jobs, employers must submit an application for a labour market impact assessment before being permitted to hire workers through the program.
Applications are reviewed to ensure the employers and job offers are genuine, and that employers have complied with program rules and applicable labour laws. Applications are assessed against a number of labour market factors to ensure that the hiring of temporary foreign workers will not have a negative impact on the Canadian labour market.
Among these factors, employers are required to demonstrate they have advertised to and recruited Canadians and permanent residents, for example, through common online platforms such as Canada's Job Bank. This includes targeted efforts to reach out to under-represented groups who may be underemployed in the labour market.
In addition, employers must certify that the hiring of foreign workers will not lead to offshoring or job losses for Canadians or permanent residents, and will not negatively affect the settlement of labour disputes.
To ensure temporary foreign workers are protected while in Canada, the program has a comprehensive compliance framework in place and continuously works to enhance the protection of vulnerable workers.
The cornerstone of the compliance regime is the authority to conduct inspections, including unannounced inspections.
When an employer fails to meet program conditions, a range of consequences can be imposed, including administrative monetary penalties ranging from $500 to a maximum of $1 million, program bans of various lengths from one to 10 years and permanent bans for egregious cases.
The government is also making greater efforts to support workers more directly. For example, the government launched the migrant worker support network pilot in British Columbia in the fall of 2018, which brings together a diverse group of stakeholders involved in the protection and support of migrant workers, including workers themselves. The goal of the network is to better support workers to understand and exercise their rights, as well as supporting employers, and understanding and meeting program conditions and requirements.
Finally, service to clients is a key priority area for the government. The program is committed to reviewing its operations to ensure that it provides eligible employers with efficient and timely access to foreign workers. Beginning in April 2018, the department experienced a significant increase in employer applications for workers, which led to the creation of an important backlog and processing delays.
To improve service delivery, the government is investing additional funds to reduce inventories and improve processing times, including $8.1 million this fiscal year, and an additional $5.1 million in each of the next two fiscal years.
The department is also investing in a new online application system that will reduce administrative burden, and also accelerate the process.
Because of these investments, the application inventory has been reduced by 38%, and processing times have decreased across all program streams since April 2019. For example, for the seasonal agricultural program, processing times fell from the peak of 17 days to 10 days in February 2020. For those applying in the low wage stream, it went from 144 days to 52 days for employers currently applying for the program.
We're hopeful that these times will continue to decline as the impact of these investments is maximized, and that it will make it easier and faster for employers to use the program to fill their shortages.
ESDC is committed to continuing to improve the program to ensure that it works for employers, workers and the Canadian economy.
I would be pleased to answer your questions.
Madam Chair, committee members, thank you for giving me this opportunity today to present some key observations on the Canadian labour market.
I would like to use my time to focus on the country's labour supply and demand dynamics, and particularly the contribution of immigrants to the recent changes observed in the labour market.
According to different observations on labour supply and demand in Canada, it is clear that labour markets were tighter in 2019. If we look at labour demand, a number of provinces posted record-high job vacancy rates in the first three quarters of 2019. Across the country, several industries, such as health care and accommodation and food services, also posted their highest-ever job vacancy rates last year.
With respect to labour supply, the national participation rates for the core-working-age population, or individuals between 25 and 54 years old, were also at their highest level.
In May 2019, Canada saw its lowest unemployment rate since 1976, when comparable data from the labour force survey became available. Similar records were also observed in Quebec and Nova Scotia.
If we look at recent labour supply and demand dynamics in Canada, there are considerable variations, especially for specific occupations, levels of education and geographic areas.
First, the most recent results of the job vacancy survey show a tightening of the labour market in a number of occupations, such as health care professionals, where the number of unemployed individuals was lower than the number of vacant positions. We have observed similar scenarios at the provincial level as well. For example, there was less than one unemployed person for each vacant position in manufacturing occupations in Quebec and in sales and service occupations in British Columbia.
Second, if we examine the skills sought by employers, the labour market is obviously tighter for workers with lower levels of education. For example, in the third quarter of 2019 in British Columbia, there was less than one unemployed person with a high school diploma or lower for every vacant position requiring a similar level of education.
Lastly, we have also observed considerable regional differences in the aging of the labour supply. In 2009, just under one in six people in the labour force in Canada were 55 years and older, compared with more than one in five in 2019.
In some regions of the country, particularly northern British Columbia, southern Newfoundland, and Gaspésie, around one in three people in the labour force were over the age of 55. These regions, like most others outside large urban centres, also had some of the lowest retention rates of immigrant tax filers.
Given the aging population in many regions across Canada, immigrants are playing an increasingly important role in the renewal of labour supply.
Over the past five years, the number of Canadian students enrolled in a post-secondary institution has fallen by more than 40,000. Meanwhile, the number of international students has grown by more than 120,000.
Similarly, the most recent population estimates indicate that the numbers of births in Canada is stable and that the number of immigrants has increased.
In 2019, just over one in four individuals in the labour market was born outside Canada. By 2036, this figure could be one in three.
In recent years, most of the annual employment growth was driven by increases observed among landed immigrants.
In 2019, close to two-thirds of the overall employment growth in Canada was led by permanent residents, though they represented roughly a quarter of the working-age population. In particular, among women, three-quarters of the employment growth in 2019 was driven by permanent residents.
In some provinces, such as Alberta and Manitoba, permanent residents were responsible for all the employment growth observed in 2019. They represented a little less than a quarter of the working-age population in those provinces.
Labour supply and demand variations are one thing, but we are also very aware of the need to shed light on the quality and security offered by those jobs. Quality of employment is one issue we are delving into further at Statistics Canada.
For example, we are working closely with the United Nations Economic Commission for Europe, with whom we recently contributed to the development of an international statistical framework for measuring employment quality.
Quality of employment comprises various dimensions, including job security, decent wages and the right to work without discrimination.
One aspect of job security is the extent to which jobs are permanent or temporary. In 2019, recent landed immigrants were less likely to have a permanent job than their Canadian-born counterparts. Conversely, landed immigrants who had been in Canada for more than 10 years were more likely to have a permanent job than individuals born in Canada. This was observed among both men and women.
These results highlight the importance of looking at the entire employment trajectory when examining employment quality.
Another aspect of job security is the unionization rate. For example, landed immigrants, especially those who arrived in the country recently, had much lower unionization rates than Canadian-born individuals, both among women and men.
Statistics Canada is working closely with a number of provincial, federal and international partners, including Employment and Social Development Canada, or ESDC, and Immigration, Refugees and Citizenship Canada, or IRCC, to enhance, refine and standardize employment quality indicators and get a better understanding of the employment trajectory.
Thanks to information from the longitudinal immigration database, which was developed in partnership with IRCC, we can analyze the employment trajectory of immigrants to better understand their labour market reality.
Finally, I'd like to mention some of Statistics Canada's recent initiatives to enhance the information available on the labour market. First, we understand that communities throughout the country, from large urban centres to rural areas, need reliable, timely information on the labour market.
We are currently exploring innovative statistical methods to provide more labour market information to more communities across Canada. We are also working closely with our colleagues at IRCC to refine labour market information on immigrants, using administrative data, for example.
We are also evaluating the possibility of producing reliable, timely data on the labour market status of immigrants based on their immigrant category. Third, together with ESDC, we recently made administrative data on temporary foreign workers available to our researchers. This information on labour demand enriches the information on the labour supply of temporary foreign workers. These data will help our researchers analyze the employment situation of these workers in the context of a tighter labour market.
That concludes my presentation, Madam Chair.
I hope that this brief overview of Canada's recent labour market supply and demand dynamics will be useful to the committee.
I would be more than happy to answer your questions.