Changes to Foreign Worker Program could strangle Canadian economy

Changes could also lead to rise in illegal workers

Changes to Foreign Worker Program could strangle Canadian economy FREE to subscribers

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VANCOUVER, BC, Apr 15, 2015/ Troy Media/ – Canada’s recent changes to the Temporary Foreign Worker Program (TFWP) are slamming the door on low-skilled workers trying to come to Canada, and in some cases to stay in the country. To some, this might not seem to be a bad thing, but a shortage of low-skilled workers will have consequences in both the short and longer terms.

A recent Canada West Foundation report describes the history of foreign workers programs and the effects of the 2014 changes, including the increased cost in money, time and administrative process to bring in a low-skilled worker who then cannot stay in Canada as long.

Changes to Foreign Worker Program lead to classic Catch-22

Starting this year, not more than 10 per cent of the workforce (based on hours worked) of any company can be TFWs. In other words, Canadians have to do 90 per cent of the total work.

But there is also a catch-22: To hire foreign workers, an employer will now have to hire more Canadians. But the reason the employer is hiring more foreign workers in the first place is because he cannot find Canadian workers, who are already the first choice anyway.

foreign worker program
If workers in the Temporary Foreign Worker Program do a good job, maybe we should give them an easier path to becoming Canadian workers

According to a survey by the Alberta Chambers of Commerce, it costs companies between $200 and $1,000, mainly for advertising, to hire a Canadian worker who can be put to work at once. The cost of hiring a foreign worker for a year, again according to the survey, is $11,055 to $14,605. The government processing fee alone has increased from $250 to $1,000 and is payable regardless of whether permission is given to bring in the worker. (The good news is that the fee will cover monitoring costs to prevent abuses.) And the time between beginning the process to (perhaps) having the worker on site is measured in months. No employer would pay this high a price in money, time and hassle if they didn’t have to.

And reducing the number of foreign workers available for low-skilled jobs does not necessarily mean there will be more work for Canadians. Most serious labour shortages are in small centres and remote locations where there are few unemployed people to draw on. Often, these centres have high costs of accommodation and other expenses to meet on a relatively low salary. I expect that most adult Canadians would choose to stay close to home and wait for a better paying positon than relocate. Our Employment Insurance system was designed to give them that option.

In the short term, the shortage of low-skilled workers will leave businesses understaffed. Remaining workers and business operators will be asked to work longer hours, which in turn could lead to employee burnout, reduced hours of operation, a decline in service levels, and even business closures. I have heard of hotels in Fort McMurray which, before the availability of TFWs, left sheets and towels out for the guests to make their own beds as room cleaners were simply not available.

These effects will be more noticeable outside of major cities, the very places where we find many of our best investment opportunities. In the case of B.C.’s Liquefied Natural Gas developments, such projects already face the challenges of managing the environmental impact, dealing fairly with First Nations and attracting a project workforce. If an absence of low-skilled workers leads to a drop in the quantity and quality of basic community services, like coffee shops, it may be the last straw.

In Japan, with its low birth rates and virtually no immigration, the impact of worker shortages has led to long-term economic stagnation. Much of the country’s manufacturing has moved to more populous countries. But the demand for human beings to do basic work persists: people are smuggled in as undocumented illegals.

Closing the door on economic growth

Canada could also find itself facing a similar problem of illegals doing work that we all agree needs to be done, but have no one else to do it, if we bar the door too tightly against low-skilled workers.

It would be far better to open our door to less skilled people from other countries, while implementing an adequate monitoring system to ensure they are protected by our laws and standards. If, as in the past, the foreign workers do a good job, maybe we should even drop both the T and the F and give them a path to becoming Canadian workers.

Troy Media BC’s Business columnist Roslyn Kunin is a consulting economist and speaker and can be reached at www.rkunin.com.

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2 Responses to "Changes to Foreign Worker Program could strangle Canadian economy"

  1. Avatar
    k peredo   April 15, 2015 at 10:41 pm

    Supporters of the TFWP can not have it both ways. You can not say to those who criticize the TFWP that their concerns are exaggerated, because it is used to fill “less than 2%” of jobs, and then turn around and say that any changes to it could “cripple Canada’s economy”. You just can’t have it both ways. The 10% cap will have even less effect, because it does not apply to probably the largest user of TFW, agriculture, or jobs in Quebec, or small-businesses with fewer than 10 employees.
    Then there is the statement that Canadians were “already the first choice anyways” for employers using TFW, truly absurd to anyone with first-hand experience with this program. Also absurd is the cost given to hire a TFW $11055 to $14605, based on figures from the Alberta Chambers of Commerce, an organization which is hardy unbiased. The truth, again apparent to anyone on ground level, is that not only is this cost greatly exaggerated, but that much of it is in reality clawed back from TFW, either illegally through outright kickbacks or unpaid overtime, or legally through greatly inflated charges for employer-provided housing.
    Lastly, as someone living in a rural area I am greatly offended by this repeated assertion made by supporters of the TFWP, often living in urban areas, that we of all people benefit from this program. Yes there may be “few” unemployed here, but there are even fewer available jobs! It is not like an urban area where there are hundreds of employers within driving distance. Here there is a limited economy, with limited employers, and limited jobs not filled through word of mouth. There is also limited assistance available for the unemployed, since we do not have the educational or job training programs available in larger communities. Tell me how the TFWP helps us, since there is hardly a “surplus” of jobs here. Our biggest problem, shared by many rural and isolated communities, is that there is a lack of jobs, which causes young people especially to leave. Why are we bringing in TFW when people have to leave to find work?

  2. Avatar
    KimLe1   April 17, 2015 at 1:09 pm

    If the lazy & spoiled people in this country will not work, then there’s no reason why the Canadian government should shut the doors on hard working foreigners who are willing to work and contribute to our society.  The new TFWP laws favours lazy Canadians.  Many who were born and raised in Canada feels they’re entitled.  When given opportunities to work in low-skilled jobs; they come to work with a bad attitude, can’t work as a team, don’t get along with fellow co-workers, won’t committ, and slack off.  If they’re asked to work longer hours, they whine and complain.  These are the same people who would rather stay home and collect welfare or disability benefits.  These behaviours make it less attractive for employers to hire local.  Therefore businesses prefer to seek diligent and genuine hard working people from abroad.  I am Canadian.  However, I ashamed and embarrassed of lazy Canadians.

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