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Immigration Trends: Temporary foreign workers Retention in Canada’s Hospitality Industry

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Canada's Hospitality Industry low income workers

The study by Stats Canada offers a comprehensive overview of the trajectory of temporary foreign workers in Canada’s AFS industry, highlighting the complexities of their journey towards permanent residency and subsequent industry retention. The findings underscore significant differences based on skill level and entry cohorts, providing valuable insights for policymakers, industry stakeholders, and immigration strategists.

The report’s analysis presents a nuanced understanding of how temporary foreign workers integrate into the Canadian labor market and their mobility within it. It emphasizes the need for targeted policies to support these workers, ensuring their successful transition and retention, which is crucial for addressing labor shortages and fostering a diverse and dynamic workforce in Canada.

The study conducted by Jianwei Zhong, Yuqian Lu, Youjin Choi, and Jue Zhang, released on January 24, 2024, delves into the dynamics of temporary foreign workers (TFWs) in lower-skill occupations within Canada’s accommodation and food services (AFS) industry. Spanning from 2000 to 2020, it sheds light on their transition to permanent residency and subsequent retention in the industry. This study stands out by juxtaposing these outcomes with those of TFWs in higher-skill occupations and study permit holders employed in the same sector.

Key Findings:

  1. Demographics and Trends:
    • The AFS industry saw a significant contribution from temporary residents eligible to work in Canada, constituting 7.2% of total employment in 2017.
    • COVID-19 disrupted this trend, but post-pandemic recovery saw rising job vacancies, peaking at 12.7% in Q3 of 2021.
    • Lower-skill TFWs in the AFS industry remained relatively stable in numbers during the 2010s. In contrast, the number of higher-skill TFWs and study permit holders surged, particularly after policy reforms in 2014 that allowed off-campus work.
  2. Sociodemographic Characteristics:
    • A significant portion (about 90%) of lower-skill TFWs were under 34 years old, with nearly 60% being women.
    • The majority were employed in Ontario, British Columbia, Alberta, and Quebec. Notably, Alberta and British Columbia saw a higher influx due to specific pilot projects.
    • The primary source regions varied over time, with significant representation from East Asia, Western Europe, Northern Europe, and Oceania.
  3. Transition to Permanent Residency:
    • Lower-skill TFWs had lower cumulative transition rates to permanent residency compared to their higher-skill counterparts and study permit holders.
    • Despite lower transition rates, the actual number of lower-skill TFWs transitioning to permanent residency was higher, attributed to their larger population size in the industry.
    • The transition rates varied across entry cohorts, with notable differences in rates and numbers post-transition.
  4. Retention in the AFS Industry Post-Transition:
    • Lower-skill TFWs showed lower retention rates in the AFS industry after obtaining permanent residency, compared to higher-skill TFWs.
    • Around 60-70% of lower-skill TFWs remained in the industry during the landing year, but this percentage dropped significantly within five years post-landing.
    • Higher-skill TFWs had better retention rates, with a significant percentage remaining in the industry five years after landing.
    • Study permit holders were more likely to transition to other industries post-landing.
  5. Industrial Mobility:
    • The study observed a trend where a considerable percentage of TFWs, especially those with lower-skill occupations, transitioned to other industries within a few years of achieving permanent residency.
    • This trend indicates a dynamic movement within the labor market, with implications for industrial staffing and labor policies.

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