Temporary Foreign Worker Program in the Spotlight

Written by on May 16, 2013 in Employment Law Blog
Global Team

Some employers are hiring temporary foreign workers in the same occupations and locations as Canadians who collect employment insurance (EI).

The temporary foreign worker program sparked controversy earlier this year, when two labour unions took Huiyong Holdings Group to court, after the mining company hired more than 200 temporary foreign workers from China for its coal mine in northeastern B.C. The program remained in the spotlight in April, when over 40 employees at RBC lost their jobs to temporary foreign workers.

When employers can’t find Canadian workers for specific jobs, Citizenship and Immigration Canada may give them permission to hire foreign workers. However, in many instances, employers are not searching hard enough to find Canadian workers, especially in higher unemployment areas. In 2012, approximately 213,516 people entered Canada via the temporary foreign worker program, more than three times the number admitted a decade ago.

A study by the University of Calgary suggests the program could be distorting the natural supply and demand of the labour market. The report titled “All the workers we need: debunking Canada’s labour shortage fallacy” suggests Canada is not facing a wide-scale labour shortage. Instead, the country is experiencing a significant mismatch between the skills of its labour force and the demands of the labour market. The lead author of the study, Kevin McQuillan, said improving the balance in the labour marketplace does not require an increase in the labour supply.

The federal government recently stated the temporary foreign worker program is due for an overhaul. Under proposed changes, employers will no longer have flexibility to set the wages for foreign labour. This would put an end to a rule that allows businesses to pay foreign workers up to 15 per cent below median wages for Canadians. The government also called for a temporary freeze to the program that fast-tracked the ability of some companies to bring in foreign workers through an accelerated labour market opinion. The two key changes are part of a larger overhaul of the program that also includes stricter rules for applications, new fees for employers who apply and a promise of stricter enforcement.

Impact on Employers

Employers should count on their labour costs for hiring non-foreign workers, as opposed to foreign workers, to increase up to 15 per cent. While this may at first glance seem like yet another increase, in the big picture it may reduce unemployment and the burden on our tax system with wages being paid to Canadian workers for redistribution within our economy.

Impact on Employees

Employees should view this as the opening of a job market with immediate opportunities. With concerns that Canadians are losing jobs to foreign workers, these job will now be available to all Canadians lessening the burden on our tax system. While perhaps these jobs may not be the sort of work that is most popular, the job is there and the reward is there – a much better option than EI.

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