A recent peer-reviewed study by Canadian economists has uncovered compelling reasons why employers across Canada increasingly prefer hiring temporary foreign workers over domestic employees. The research reveals that foreign workers typically work longer hours, take fewer absences, and accept lower wages than their Canadian counterparts.
The Productivity Advantage
According to the study conducted by economics professors Pierre Brochu, Till Gross, and Christopher Worswick, temporary foreign workers demonstrate significantly different work patterns compared to domestic workers. Foreign workers work longer hours, are less absent and are less likely to be laid off than domestic workers, creating a clear preference among employers seeking reliable, cost-effective labor.
The research indicates that many of Canada's approximately three million temporary foreign workers display exceptional motivation, often accepting compensation packages that domestic workers would find inadequate. This trend spans multiple industries including hospitality, fast-food, security services, supermarkets, and construction.
Economic Incentives Behind the Preference
One key factor driving this dynamic is the substantial wage differential between Canada and workers' countries of origin. Research from the London School of Economics shows that temporary migrants from developing nations like India, the Philippines, and Mexico can earn over 400% higher wages in North America compared to what they would earn for similar work in their home countries.
This economic reality creates a workforce willing to accept conditions that Canadian workers might refuse. The study's authors note that their model explains why firms might prefer hiring temporary foreign workers even when domestic workers are available at the same wage level.
Impact on Canadian Workers and Wages
The research identifies significant consequences for Canada's domestic workforce. The temporary foreign worker program unintentionally lowers wages and employment opportunities for Canadian workers, creating downward pressure on compensation across multiple sectors.
Since the Liberal government took office, the proportion of temporary residents in Canada has tripled, now accounting for 7.1% of the population compared to just 2.3% in 2013. British Columbia shows the highest concentration at 9.1% temporary residents.
While the Temporary Foreign Worker Program receives most media attention, it represents only a fraction of Canada's guest worker population. The majority enter through the International Mobility Program or as international students, many of whom can work in Canada for up to three years after graduation.
This expanding temporary workforce continues to reshape Canada's labor landscape, raising important questions about wage suppression and the long-term effects on Canadian workers' earning potential.
