Temporary Foreign Workers and Regional Labour Market Disparities in Canada

Temporary foreign worker programs are typically seen as short-term solutions to shortages of regional or occupational labour. During the past decade, Canadian regions experienced unequal economic growth, and some suffered from significant excess labour demand. The Canadian Temporary Foreign Worker Program was thus expanded and conditions to access it made easier. During the same period, the pattern of regional disparities in unemployment rates became more persistent. This paper shows that some of the persistence is due to the increased availability of temporary foreign workers. This suggests that policy makers did not price them correctly to avoid adverse effects on the Canadian labour market.