The truth about Canada’s Foreign Worker Program

The businesses that drive Canada’s economy say there is, in fact, a labour shortage, and those that hire Temporary Foreign Workers, including restaurants, only do so after looking far and wide for Canadian talent.

Survey data from the Canadian Federation of Independent Business (CFIB) corrects a number of misconceptions about labour shortages and how small and medium businesses use the Temporary Foreign Worker Program (TFWP). These misconceptions have added fuel to a public backlash against the TFWP stemming from stories of alleged abuse, and have led government to close off the program to small businesses in the restaurant sector, some of which may not survive without it.  

“Eight out of ten small businesses looking to hire staff in the last three years had difficulty doing so. Among restaurants and other hospitality businesses looking to hire, 85 per cent had trouble,” said CFIB president Dan Kelly. “There are some jobs that Canadians are not flocking to and wages are only part of the story.”

Even businesses that turned to the TFWP left no stone unturned looking for Canadian workers first.  After expanding their recruitment efforts across the country, 72 per cent increased the wages they were offering before turning to foreign workers (83 per cent in hospitality). Another 55 per cent of hospitality firms introduced or expanded employee benefit programs – a considerable challenge in a sector known for tight margins and high business failure rates.

“The notion that employers are hiring temporary foreign workers to save money is, quite frankly, laughable,” added Kelly. “Hiring through the TFWP is complicated, it’s time-consuming, and much more costly than hiring local. Employers much prefer to hire Canadians if local staff are willing and able to do the job.”

Also clear from the survey, small business owners do not condone abuse of the system. When asked, 85 per cent said misuse of the TFWP should result in that business losing access. “Small businesses want the program to be used appropriately,” concluded Kelly, “but shutting down access for sectors that need the workers and follow the rules is deeply unfair and will do serious damage to the affected firms.”

Here is a summary of the findings:

 

Reality #1: There is a labour shortage 

 

Out of 5,457 respondents looking to hire staff  in the past three years, almost eight out of ten (79%) entrepreneurs found it was “somewhat”  or “very” difficult to do so. Concern about the shortage of labour has increased nationally  since 2008, and is most acute in Alberta and Saskatchewan. Utilization of the TFWP is also  higher in these provinces. In terms of type of worker requested through the TFWP, the two  most frequently cited are trades (55%) and entry-level positions (54%).

 

Reality #2: Small firms look to Canadian workers first 

 

Small businesses want to hire Canadian workers first. Business owners who attempted to access the TFWP take many steps to attract or retain Canadians: 73% say they recruited beyond their region, 72% increased wages, 46% added flexible hours, and 41% introduced or expanded employee benefits.

 

Reality #3: TFWs are far more expensive to hire than Canadians 

 

One of the most common myths about  TFWs is that they are a cheap form of labour. The reality is just the opposite. 68%  of business owners using the program say the overall cost of hiring and retaining  TFWs is higher than Canadian workers. It should be noted that before an employer can hire a foreign worker, they must advertise locally and across Canada. Once  they are cleared to hire a TFW, they must pay the government-approved wage rate for the industry, pay for return airfare, pay an application fee to government, assist  TFWs with finding accommodation, as well as pay fees to recruit a worker overseas. These fees can routinely exceed thousands of dollars per worker.

 

Reality #4: TFWs help preserve Canadian jobs 

 

Small businesses that apply for the TFWP see many benefits for them and their employees. Almost six in ten (59%) respondents agree that having access to temporary foreign workers allowed them to keep their businesses open and keep the Canadian workers in those businesses employed. Another 48% believed it allowed them to expand their businesses.

 

Reality #5: Business owners agree: abuse should not be tolerated 

 

The views of the general public and entrepreneurs – including those that use the program – are much closer than some may believe. Business owners are overwhelmingly supportive of imposing consequences on abuse: 85% of respondents agreed that abusers of program should see their access revoked. In addition, 82% of businesses agree the program should never be used to replace Canadians who are willing and able to work.

 

What they are saying

 

Here are some CFIB member comments 

 

“The program has allowed business not only to stay open, but to expand and to add value to our very small community, and without the program we would not be where we are today. “ 

– Recreation member, Toad River, BC 

 

“Our main problem is finding workers who are reliable, skilled and willing to work…In our area there is a severe shortage of qualified workers in all trades.” 

– Construction member, Northwestern Alberta 

 

“The abuse by some sectors of the economy does not justify the government’s one size fits all approach. Availability of skilled trades people in Saskatchewan and Alberta in particular are at a severe level. We have been trying to hire ten more welders for three years. Only two or three positions have been filled with Canadian workers. It has become critical since there are some projects we cannot quote due to our labor shortage.” 

– Manufacturing/Machinery member, Saskatoon, Saskatchewan 

 

“…In rural BC it is almost impossible to fill my staffing needs with Canadians who want to work here. In spite of tremendously expanded advertising efforts, I simply don't get the resumes…” 

– Food services member, Balfour, BC