Are Offshoring and Immigration

SUMMARY NDUSTRY CANADA ORIGINALLY PROPOSED the question in the title as the basis for a research paper. Because of the lack of data suitable for framing and testing a quantitative model, the resulting paper instead provides some tentative estimates of the relative sizes of immigration and offshoring in the Canadian context, specifically in the context of skilled services. Very approximate estimates suggest that immigration and offshoring each currently add in the neighbourhood of 20 000 to 25 000 full-time equivalent employees every year to the supply of high-skill services in Canada. Substitutability between the two types of supply is suggested by evidence that the difficulties faced by recent immigrants in finding jobs in their intended occupations are especially prevalent in highly skilled engineering and IT services. These are activities where there have been significant increases in the level of offshoring. Over the longer term, continued growth of offshoring is likely to reduce the relative importance of immigration as a source of skills, while both immigration and offshoring are likely to proceed more efficiently and flexibly because of the existence and sizable scale of the other.