Temporary Foreign Workers Commentary

Terry Glavin’s well-placed rant in the Citizen on the temporary workers program. The government in its efforts to please its small business and franchisee base is surprised that the program has encouraged hiring foreign workers, as it would appear, at the expense of Canadians:

But harder still is the work of believing all those things we are told in order to dissuade us from the reasonable conclusion that the entire edifice of the Temporary Foreign Workers program has been subverted to the purpose of a racket, and the whole point of it is to defraud the Canadian public, suppress the wages of the people and distort the national labour markets to the unearned advantage of some employers.

You will be expected to believe that the stagnation of real median wages since the 2008-09 recession is by some voodoo mechanism wholly unrelated to the roaring trade in easily-exploitable foreign temps that has been underway, simultaneously, as documented by the Labour Market Assessment 2014 report the Parliamentary Budget Office released last month.

You will be asked to take it as normal that there are nearly a half million foreign workers in Canada, and that a quarter of all the new jobs filled across Canada last year were taken by these vulnerable migrants, and similarly there is somehow nothing especially worrisome about the rate of temporary foreign workers in Canada exceeding the number of permanent residents being admitted into this country as prospective citizens.

You will be further obliged to agree that the routine eruption of all those scandals is merely a matter of an otherwise proper system being gamed and foully abused, spoiled by a few grifters and bad apples, and that in actuality the program is unfair to employers owing to its burdensome encumbrances by way of inordinate fee-paying and form-filling and application-submitting, and Employment Minister Jason Kenney is just being mean.

You need not be more than a run-of-the-mill moron to believe such propositions, but you would have to be uniquely possessed of a special type of gall to actually traffic in them, and whatever name you want to give that rare quality it is in no short supply around the offices of the Canadian Federation of Independent Business.

How to fix the foreign-workers program.

Campbell Clark has a more reasoned approach in the Globe, but essentially comes to the same conclusion:

The number of people in Canada under those labour-market opinions grew from 82,210 people in 2005, before the Conservatives took power, to 202,510 in 2012, according to statistics from Mr. Kenney’s department, Employment and Social Development Canada.

The number one occupation group isn’t engineers, it’s” food counter attendants, kitchen helpers, and related occupations,” with 17,755 people. Waiters, cooks, and cashiers are all in the top 20.

Immigration policy does play a role in the labour markets, by determining the number who come and the qualifications they need to come. But the government should have a good public-policy reason before it intervenes to tinker with supply and demand at employers’ request.

There could be a gap in a highly-specialized or highly-skilled profession that Canadians just can’t fill for the time being. There’s always been a separate stream for agricultural workers, and that’s perhaps justified because it’s back-breaking seasonal work and the farm sector can’t risk a labour-shortage at harvest….

But there’s no compelling public-policy reason to help a fast-food franchise find workers at the wage they want to pay. Can a McDonald’s in Victoria really claim no Canadian will take a job there, no matter what the wage?

Yes, some employers like this program. Dan Kelly, of the Canadian Federation of Independent Business, said a lot of employers say it’s increasingly difficult to “find people who are available to work and will show up with a smile on their face, and not be on their phone for half the shift.” But the government can’t justify guest-worker programs because some employers think these kids today have the wrong attitude.

Politically, it’s not going to be easy to justify the expansion of temporary foreign workers. Most Canadians thought it was a program to fill temporary skills shortages, not to have the government micro-manage the labour pool in jobs Canadians can do. Each case of alleged abuse underlines not simply that the program is open to abuse, but that it’s gone off the rails.

Foreign worker abuses expose Harper’s hollow commitment to free markets

Terrence Corcoran in the Financial Post notes the CD Howe study showing that the program led to an increase in unemployment:

And now comes a heavy-duty economic analysis from the C.D. Howe Institute claiming that the TFWP caused increased unemployment in Alberta and British Columbia. The paper could put a serious crimp in the federal government’s program that has proven wildly successful. As of December, an estimated 338,000 temporary foreign workers held jobs in Canada.

The increase in unemployment in Alberta and B.C. is said to have occurred between 2007 and 2010 when the program was relaxed and a pilot project introduced to allow “cheaper access to foreign workers because of purportedly deep shortages of labour in some occupations.” The program worked, but maybe too well.

The author of the C.D. Howe report does not condemn the TFWP as a whole. Dominique Gross, a professor at the School of Public Policy at Simon Fraser University, says in her study, Temporary Foreign Workers in Canada: Are They Really Filling Labour Shortages, the idea is economically sound but only if the program is well designed. In an interview, Ms. Gross said the unemployment rates in B.C. and Alberta were on average 1% higher per year over the 2007-10 period than they would have been had the government not relaxed the rules of the TFWP.

To fix the problem, Ms. Gross calls for a number of reforms, including collecting much better data on whether shortages actually exist, increasing the corporate cost-per-worker of a TFW permit (now $275 each compared with $2,500 in the United States) and imposing tougher rules that would force companies to prove the labour shortages are real.

Pending reforms, Ms. Gross says Ottawa should impose a “temporary quota” on the total number of temporary workers allowed into Canada.

Ms. Gross’s reforms may be hard to implement without gutting much of the initiative. Temporary worker programs are a relative success in Europe, she says, in part because labour supply and demand is vigorously monitored through detailed employment vacancy surveys. Europe also makes use of expensive government-run “local labour offices” that serve as matchmakers between workers and employers. Canada has never been hospitable to greater state involvement in day-to-day management of the labour market, whether provincial or federal.

Bit odd however that Corcoran should be citing temporary worker programs in Europe as a relative success given some of the longer-term integration challenges resulting from these programs.

Terence Corcoran: How Canada’s temporary foreign workers program became a victim of its own success