Canada’s Temporary Foreign Worker Program (TFWP) has come under serious criticism during the past several weeks.
The program is being charged with taking jobs away from Canadians and permanent residents, leaving locals unemployed while depressing the wage levels of those who are employed. The criticism of the program has been both severe and swift. The pressure has been so great that the federal government has just this week proposed various reforms to the program.
Throughout the latest fi restorm there has not been enough debate of substance. Rather, and unfortunately, the bulk of the discussion on this issue has consisted of overreaching claims regarding the apparent damage this program is doing to Canada’s labour market and the impact it has on foreigners.
While this can be partly explained by the emotions that this topic has ignited, it is of paramount importance that policy relating to the Temporary Foreign Worker Program be formed in an atmosphere of reasoned and informed debate.
WHAT IS THE TEMPORARY FOREIGN WORKER PROGRAM?
The Temporary Foreign Worker Program is the set of rules and regulations governing the entry of temporary foreign workers into Canada. The program was created in order to address chronic and ongoing skilled labour shortages. There are several avenues in which foreigners can come to Canada to work on a temporary basis and the program describes the rules governing the entry of these individuals through various categories.
For example, a person may enter Canada through provisions of the North American Free Trade Agreement (NAFTA) which simplifi es the entry of individuals from a list of professions who have a pre-existing contract with a Canadian employer. Individuals may also enter as intra-company transferees, moving from a foreign offi ce to a Canadian offi ce for a few years. Employers may alternatively apply to the Canadian government to hire a foreigner where they cannot fi nd a Canadian or permanent resident, despite sustained eff orts to fi nd a local candidate.
The TFWP is both sophisticated and well developed. It recognizes that the entry of foreigners can have an impact on the local labour market and, potentially, take away an opportunity from a Canadian or permanent resident. There are accordingly strict rules in place to ensure that foreigners are only granted entry where there is a genuine gap in the labour market that cannot be fi lled by a Canadian or permanent resident.
The program is managed through close coordination between Citizenship and Immigration Canada (CIC) and Human Resources and Skills Development Canada (HRSDC). Local labour market conditions are reviewed as are an employer’s recruitment eff orts before an “opinion” is produced as to whether the entry of a foreigner will have a positive or negative impact on the labour market. Once this result, known as a Labour Market Opinion (LMO), is produced, the employer and foreigner must provide this to CIC which then makes its own determination as to whether an individual should be granted entry to Canada.
The program thoughtfully assesses the potential impact of the entry of a foreigner in the Canadian labour market. Contrary to the accusations of several commentators, the TFWP is already geared fi rst and foremost at protecting local labour markets, meaning jobs for Canadians and permanent residents.
CANADA HAS IN PLACE STRICT RULES
Some commentators have suggested that the TFWP should be removed in its entirety. Unfl attering comparisons have also been made between the TFWP and temporary foreign workers in places such as Dubai and Singapore. Specifi cally, Canada has eff ectively been accused of creating an underclass of foreigners who are shipped into Canada, exploited, and left to languish and/or get thrown out of the country unceremoniously.
There is no basis for this comparison. While some other programs have been the subject of often legitimate criticism relating to the treatment of foreign workers, Canada’s program has in place a strict set of rules aimed at protecting foreigners.
Further, individuals who come to Canada under the TFWP are often able to apply for permanent residency and, eventually, citizenship. For example, Canadian experience gained while in Canada on a temporary work permit can often form the basis for an application for permanent residency. There are several programs at both the provincial and federal levels that provide opportunities for individuals to turn a temporary permit into permanent status. Also, since these individuals are already working in Canada, they often have an easier time integrating into the workforce. This can help to reduce the incidents of mismatches between the skills which a new Canadian brings and their employment in Canada.
Canadian employers also face serious sanctions in the event they are found to not be treating foreigners in accordance with the applicable employment standards legislation. To put it simply, temporary foreign workers benefi t from the same employment standards protection as Canadians.
WE REALLY DO NEED TEMPORARY WORKERS
It may be tempting to dismiss concerns about ongoing labour shortages in Canada. After all, this issue has been discussed for years and arguably has still not hit crisis point. In light of the recent recessionary period in which unemployment rates have increased across the globe, such concerns may also appear misplaced.
However, Canada faces serious labour shortages across various regions and sectors of the economy. This includes, but is not limited to the oil and gas sectors, raw material extraction such as potash and diamonds, as well as the technology sector. While there are some skills uniformly in shortage across the country, most needs are regionally specifi c and change over time depending on fluctuations in various industries.
To suggest that there is no skilled labour shortage would be to turn a blind eye to well documented labour market data.
Further, unless governments across the country decide to mandate individuals to train in areas where skills shortages exist or force Canadians to pick up and move to areas where there are skills shortages, the problem will continue to exist. And even if such draconian policies were implemented, there would still be signifi cant and sustained labour shortages.
Perhaps the best way to understand the gravity of the issue is to look at the raw numbers. Specifi cally, the following fi ndings from Statistics Canada demonstrates that Canada is a nation that will need more, not less, immigration in the years to come:
- For the fi rst time in recorded history, there are just as many workers over the age of 40 as there are under the age of 40. According to Statistics Canada, 15.3 per cent of Canadian workers are 55 or older and nearing retirement
- The number of young workers replacing older workers is rapidly diminishing. In 1983, there were 3.7 replacement workers for every retiree; in 2003 there were 2.7 replacement workers for every retiree, and in 2006, 1.9 Canadians aged 20-34 were entering the workforce for every person aged 55-64 leaving it
- In the period leading up to the most recent recessionary period, between 2001 and 2006, Canada’s overall annual employment growth was top among G7 nations, rising at an average of 1.7% per year
There is also an immense and growing skills gap in Canada's labour market. The Conference Board of Canada has estimated that by 2020 there could be a skilled worker shortfall of up to three million. This means that there will be an enormous number of unfi lled jobs in Canada as a direct result of skills which cannot be found.
Another important factor is the coming retirement of the socalled baby boomers which, although delayed by the latest recession, will begin shortly in earnest.
Further, the world’s almost insatiable demand for Canada’s raw materials, and the accompanying growing need for Canada’s products and services, means there will continue to be a growth of demand for the broad range of labour skills required to support Canada’s growth.
Given these trends, along with the realities of Canada’s labour force, more and more employers will need to look to foreign labour in order to fill shortages.
There are serious consequences when employers cannot fi nd employees with the appropriate skills needed. Specifi cally, their businesses suff er as they cannot produce the goods and services needed in order to compete at a global level. Without access to the best skills companies are left in a position where they are unable to grow and thrive. This situation threatens everyone’s employment, the vast majority of whom are Canadians.
RULES AND CONSEQUENCES
Although each program suff ers from a subset of individuals and businesses that do not follow the rules, the vast majority of employers abide by the TFWP rules and the temporary foreign workers they employ are genuinely needed.
Employers do not seek temporary foreign workers because they prefer to hire from abroad. Rather, they do so because they genuinely struggle to fi nd Canadians to fi ll the roles. Employers are not in the business of denying jobs to Canadians, but instead are in the business of running their business. And the fact remains that thousands of employers are struggling to fi nd Canadians and permanent residents to fi ll available roles.
There are several underlying reasons to explain employers’ struggles in fi nding the right employees. Sometimes there are simply not the people with the right skills looking to work in a role which needs to be fi lled. In other circumstances, although a Canadian candidate may have the right skills, they may live thousands of kilometers away and be unwilling to relocate. Employers are also fi nding that Canadians are simply not willing to do lower skilled jobs even with relatively high wage levels.
Hiring temporary foreign workers is also both a costly and time-consuming process. In most cases, by the time an employer is looking outside Canada for labour, they have already spent signifi cant time looking for Canadians or permanent residents. They then need to carry out what is most often a lengthy process to fi nd an appropriate foreigner for the job. Once this is done, they must then apply to HRSDC and wait for their determination. Assuming the employer receives a positive LMO, the foreigner must then make an application to CIC to be granted a work permit, a process that can take months.
Employers that hire foreigners are then subject to audits on the part of HRSDC to review the manner in which foreigners are treated while employed. In summary, the vast majority of employers do not take the hiring of foreigners lightly.
NEED FOR REASONED REGULATION
The federal government has announced this week that the TFWP be the subject of further regulation. The simple fact however that the TFWP is subject to reform does not mean that the program is inherently fl awed. To the contrary, programs should be consistently reviewed, revised and modernized. The TFWP has in fact been subject to constant review and adjustment since its inception.
There is no doubt that the TFWP should continue to prioritize the preservation of job opportunities for Canadians and permanent residents. Canada should therefore look at a wide variety of avenues to address labour shortages. One option is to promote domestic job retraining programs. While this should be encouraged, this at best presents a partial solution to what is a large and chronic national issue. Canada could also signifi cantly increase the annual intake of permanent residents. This however is likely to be unpopular among Canadians and may not solve the problem of the mismatch between available skills and the needs of the Canadian labour market. Further, as discussed, the TFWP already provides several opportunities for foreigners with temporary work permits who are employed and fi lling labour shortages to remain in Canada as permanent residents.
No matter what policy mix is proposed, a top priority must be to ensure that employers are able to secure employees with the skills needed to grow their businesses. Doing so will help to provide the economy with the required fuel to propel it into the future, providing more and better jobs for all Canadians.
The bottom line is that Canada’s immigration and economic policies should be geared at growth and expanding job opportunities across the country. To do this we must continue to look at all avenues to fi nd the labour needed to drive this growth, whether this exists in the local labour market or abroad.