Why so many temporary foreign workers in southwest Ontario?

A common defence of Canada’s ballooning temporary foreign worker program is that it’s needed in areas with severe labour shortages. Despite this, there has been an influx of TFWs to a very surprising place: Southwestern Ontario.

Any increase in TFWs in Southwestern Ontario should be seen as a surprise, as the labour market has been in decline in the region over the last decade, with London, Windsor and Hamilton experiencing significant declines in their full-time employment rates:

With the possible exceptions of Guelph and the Kitchener-Cambridge-Waterloo CMA, one would have to look for a very long time to find a “severe labour shortage” in Southwestern Ontario. Despite this, the number of TFWs has risen dramatically across the region. Here are the number of TFWs across seven communities in Southwestern Ontario on December 1 of each year:

Note the increases in TFWs in Hamilton and London, along with a spike in Windsor in 2012. These were the same communities that experienced the sharpest declines in their full-time employment rates. Here is the data on TFWs expressed as a total over the seven communities:

So what are all these TFWs doing in London, Hamilton and Windsor? We really cannot say thanks to limited data.

There are at least two publicly available data sets on TFWs. The data posted in the above charts is from Citizen and Immigration’s Immigration Overview. The data set also includes TFW data sorted by source country, yearly sub-status and gender and occupational skill level. Unfortunately those data items are not divided up by city or province, so there is no way to tell what types of jobs TFWs are taking in places like St. Catharines-Niagara.

The second publicly available data set is the Employment and Social Development Canada’s Labour Market Opinion Statistics. An LMO is often needed before a firm can “hire a foreign worker or get pre-approval to hire a large number of workers.” The LMO Statistics does break the skill level and occupational groups data to the province level, but not the city or CMA level. However, even the provincial data is of limited use, as there is no direct way to correlate the data from the immigration set to the LMO set (or vice versa), since as the LMO Statistics point out, “not all Temporary Foreign Workers (TFWs) require a labour market opinion (LMO) to obtain a work permit.” Restricting our examination to TFWs that have an LMO gives us an incomplete picture, but using the immigration data set prevents us from analyzing skill and occupational data at the provincial level.

The temporary foreign workers issue is just another example of why Canada needs to keep better labour market data. There may be very good economic reasons why the number of TFWs has doubled in Southwestern Ontario in the last decade, but without proper data there is no real way of knowing.