A discrepancy of around a million temporary residents between official figures from two federal bodies is leaving Canada in the dark about how many of those residents actually have jobs, an economist is warning.
Mikal Skuterud, a professor of economics at the University of Waterloo, also says Statistics Canada may be dramatically undercounting the number of temporary residents, including international students and temporary foreign workers, employed in Canada. He describes the findings in a report to be published later this week by the C.D. Howe Institute.
The report notes that Statistics Canada’s Labour Force Survey – which is used to set Canada’s unemployment rate – suggests there were 503,079 temporary residents with jobs in Canada in December last year.
But Mr. Skuterud says information from Immigration, Refugees and Citizenship Canada, the federal department that issues work permits and study visas to foreign nationals, suggests there were 1,585,664 temporary residents with jobs at that time.
“The problem is that the margin of the difference has become so large, now exceeding one million workers, that labour market analysts are increasingly in the dark,” Mr. Skuterud says in a summary of the report.
A million more non-permanent residents live in Canada than official figures say, ministers told
He told The Globe and Mail that he believes the true number probably falls somewhere between the survey figures and the IRCC numbers.
“I want to know the truth,” he said. “What’s the true number here? The reality is that nobody knows what the truth is – nobody. And that’s a problem.”
The report says undercounting of temporary residents in labour force figures could have a serious impact on planning to alleviate labour shortages, and could also affect wages.
Mr. Skuterud said accurately assessing the contribution of temporary residents in alleviating labour shortages is crucial for policy-makers.
“As this population continues to surge, the significance of this measurement issue is critical,” he added.
The report, Canada’s Missing Workers: Temporary Residents Working in Canada, says there has been a large increase in the number of temporary residents working in Canada since 2006. Since then, the report says, the discrepancy between the IRCC and Statistics Canada figures has widened.
Mr. Skuterud’s analysis found that Statistics Canada’s labour market survey suggests an increase of 391,600 temporary residents with jobs from 2006 to December, 2022.
But IRCC data – which include information on international students permitted to work, as well as temporary residents in the temporary foreign worker program and the international mobility program – suggest an increase of 1,330,404 over the same period, the report says.
The report does not account for undocumented people working illegally in Canada.
“Since the inflow of temporary residents shows no signs of slowing, it is imperative and urgent that Statistics Canada and IRCC revise their data collection to obtain better estimates of employment in the temporary resident population,” the report concludes.
Benjamin Tal, deputy chief economist at CIBC Capital Markets, cautioned federal ministers at their August cabinet retreat that there may be around one million more temporary residents living in Canada than government estimates suggest. He reiterated this in a report, published last week.
Melissa Gammage, a spokesperson for Statistics Canada, said in a statement last week that the agency’s statistics on non-permanent residents “are accurate, produced using robust mechanisms and in collaboration with many stakeholders.”
But she said the agency constantly reviews its methodology, and that starting on Sept. 27 it will publish new data tables on non-permanent residents “computed using a revised methodology and going back to 2021.”
The new tables will include new details on non-permanent residents, “such as their estimated numbers and permit types, as well as other methodological improvements,” Ms. Gammage said.
Mr. Skuterud said it is if unclear if this new methodology will include better estimates of employment in the temporary resident population.
The Labour Force Survey samples around 60,000 Canadian households every month and identifies the work activities of people 15 and older. It has lower response rates in certain subpopulations, which may lead to a downward bias in its estimates, Mr. Skuterud’s report says.
The report says there are also serious questions about the accuracy of the IRCC figures, which it says may have an “upward bias.” This could have partly to do with the fact that holders of valid work permits and study permits are not always employed for the entire time their papers are valid. And some temporary residents might hold both types of permits, potentially leading to double counting.
“Unfortunately, with available data sources, it is impossible to determine the magnitude of the upward bias in the estimates based on the administrative data from IRCC,” the report says.