Government Urged to Improve Data Quality on Temporary Resident Workforce

February 11, 2025 – Canada’s rapidly growing population of non-permanent residents (NPRs), particularly international students, is increasingly undercounted in government labour market data, according to a new report from the C.D. Howe Institute. This underrepresentation in Statistics Canada’s Labour Force Survey (LFS) distorts critical economic indicators such as unemployment rates and nominal wage growth, creating challenges for policymakers and economic analysts.

In “The Growing Data Gap on Canada’s Temporary Resident Workforce,” Mikal Skuterud highlights the discrepancies caused by the LFS’s failure to adequately account for NPRs, also called temporary residents. The report notes that NPRs comprised 7.4 percent of Canada’s population as of October 2024, whereas prior to 2020, they never exceeded 3 percent. The LFS, however, underrepresents this group, estimating 1 million fewer NPRs than official government data suggests. International students, who have grown six-fold since 2006, are particularly undercounted.

“Canada’s temporary resident population has more than doubled in recent years, yet our labour market surveys fail to reflect this shift accurately,” says Skuterud, Professor of Economics at the University of Waterloo. “This data gap is no longer a technical issue – it has broad implications for informing the Bank of Canada’s monetary policy decisions and collective bargaining negotiations across the country.”

Skuterud recommends immediate reforms to the LFS, including revising survey questions to better identify NPRs by asking about study and work permits, conducting supplemental surveys to assess current measurement errors, and exploring the possibility of linking survey data to immigration records. These changes would enhance the accuracy of labour market metrics, providing a clearer picture of how NPRs influence wages, employment, and economic trends.

“Canada’s labour market is evolving rapidly, and our data collection methods must evolve alongside it,” says Skuterud. “Failing to address this issue makes it harder for policymakers to create effective economic policies and understand our workforce.”

Read the Full Report

For more information, contact: Mikal Skuterud, Fellow-in-Residence and Roger Phillips Scholar of Social Policy, C.D. Howe Institute, and Professor, University of Waterloo; Percy Sherwood, Communications Officer, C.D. Howe Institute, 416-407-4798, psherwood@cdhowe.org.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.