Foreign worker cuts will trigger massive labour pains

By Mata Press Service

Prime Minister Justin Trudeau's proposal to reduce the intake of temporary foreign workers will have catastrophic economic consequences for companies and limit their growth potential, warns

Canada's independent business advocate.

In a letter to three ministers in Trudeau’s cabinet, the Commissioner for Employers, Nancy Healey urged the government to maintain the number of workers admitted to the country under the Temporary Foreign Worker (TFW) program, improve processing times, simplify application processes and requirements, and provide the option of multi-employer work permits.

“Labour shortages persist and will continue in the next decade. More people are set to retire than enter the labour force. Canada’s declining fertility rate leaves us with the lowest number of young people to enter the labour force and take on entry-level jobs,” Healey said in her letter.

Her letter, supported by the Canadian Chamber of Commerce and the Canadian Federation of Independent Business, among others, reflects the concerns of the broader business community.

Sector after sector have raised alarm bells about labour shortages, said Healey pointing out that small businesses are facing a particularly acute problem.

According to the Federation of Independent Business, 53% of Canadian small business owners have reported that labour shortages are hindering the growth of their business.

Emploi-Québec reported that by 2030 there will be 1.6 million vacant jobs in Quebec. British Columbia is expected to have over a million job openings between 2022 and 2032. Ontario too is anticipating over a million job vacancies.

Healey argued that criticism of the TFW program is often based on “unsubstantiated anecdotes.”

"Implementing more stringent controls on the Temporary Foreign Worker Program is essential to ensure that only genuine employers can access the labor market. " said Sunil from Allway Canada Immigration.

In her letter, Healey urged the government to maintain the current number of workers admitted under the program, expedite approval processes, and avoid increasing the $1,000 fee for permit applications, which she noted is already burdensome for small businesses.

“The narrative around Canada’s Temporary Foreign Worker program is being driven by unsubstantiated anecdotes,” said Healey.

“The facts prove that the Temporary Foreign Worker Program has the necessary controls in place to protect foreign workers and to ensure that these foreign workers complement Canadian workers and sustain viable business operations. Employers are doing their part to drive the Canadian economy and would greatly benefit from a federal government that enhances coordination between departments and champions evidence-based public policy.”

Healey called for better immigration pathways that allow newcomers to stay in Canada, emphasizing that immigration streams linked to job offers tend to result in better outcomes for both employers and workers.

The influx of temporary residents, including international students, foreign workers, and asylum seekers, has contributed to Canada’s population growth rate of 3.2%, one of the highest globally.

This increase has intensified housing shortages and affected Trudeau's popularity. The government has already started capping student visas, and businesses are now concerned about potential reductions in temporary worker programs

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 -- an 88 percent increase.

Economists have raised concerns that making it too easy to bring in temporary foreign workers can hinder wage growth domestically and discourage businesses from investing in productivity-enhancing technology.

Despite these concerns, the number of temporary foreign workers in Canada continues to rise, even as the unemployment rate reached 6.4 percent in June, with a particularly high rate of 13.5 percent among young workers.

Many temporary workers are employed in low-wage, unskilled positions in sectors such as retail and hospitality, reported Canadian Press.

The top five jobs that saw the greatest number of TFW approvals last year were:

1. General farm workers - 81,500

2. Nursery and greenhouse workers - 15,400

3. Cooks - 12,000

4. Food service supervisors - 10,400

5. Food counter attendants, kitchen helpers and related support occupations - 8,300

Randy Boissonnault, Minister of Employment, Workforce Development and Official Languages, convened representatives from Canada’s largest business associations last week with one clear message: the TFW Program cannot be used to circumvent hiring talented workers in Canada, and the federal government will take further action to weed out misuse and fraud within the system.

“I’ve been clear over the last year; abuse and misuse of the TFW program must end,” he said in a press statement following the meeting.

“The health and safety of temporary foreign workers in Canada is a responsibility I take very seriously. Bad actors are taking advantage of people and compromising the program for legitimate businesses. We are putting more reforms in place to stop misuse and fraud from entering the Temporary Foreign Worker Program.”

Boissonnault outlined the following actions that are being implemented to reduce the use of temporary foreign workers in Canada:

• Enforcing consistent application of the 20 percent cap policy for temporary foreign workers. This includes the policy for the “dual intent sub-stream”, which applies to temporary foreign workers who intend to apply for permanent residency. Employers using this stream will be subject to more stringent guidelines;

• Applying a stricter and more rigorous oversight in high-risk areas when processing Labour Market Impact Assessments (LMIAs) and when conducting inspections;

• Considering LMIA fee increases to pay for additional integrity and processing activities; and,

• Looking to implement future regulatory changes regarding employer eligibility (factors such as a minimum number of years of business operations or history of layoffs by the employer).

The Temporary Foreign Worker Program began in 1973 as a way for employers to hire foreign workers for low-skill jobs.