Report calls for cap on temporary foreign workers

Posted on in Policy Context – news/national
October 17, 2013.   Tobi Cohen

A new report is calling for a cap on the number of temporary foreign workers admitted to Canada on an annual basis, pending wholesale changes to the beleaguered program that currently risks taking jobs away from young Canadians entering the labour market and lower-skilled Canadian workers.

The Institute for Research on Public Policy, a non-partisan think-tank, calls preliminary changes to the program announced by the federal government earlier this year a “step in the right direction.”

But as the government considers other options as part of a full program overhaul, author and Carleton University economics professor Christopher Worswick said a cap is needed to “ensure the program does not grow too large.”

He’s particularly concerned about those entering Canada with a positive labour market opinion, essentially confirmation from the Ministry of Employment and Social Development that there are, indeed, no Canadians that could do the job. It’s considered a first step before a work permit is issued. In 2012 there were a little over 80,000 foreign workers in that category and Worswick said that would make a reasonable cap.

He also applauded the government for eliminating a 15 per cent wage differential that allowed employers to pay workers less than the going rate for their particular labour market, and welcomed the introduction of a $275 fee to recover administrative costs related to the issuing of permits.

That said, Worswick called for some flexibility.

“There are potentially some cases where no fee should be charged and perhaps even some where firms should be subsidized to hire temporary foreign workers,” he said, noting this might happen if an individual’s employment is found to benefit not just themselves and their employer, but also other Canadians.

In situations where a temporary foreign worker is hired for a low-wage, low skilled job — such as those in food services — Worswick suggested employers be charged more.

He also recommended a sliding fee scale that would “create an incentive for firms to either train Canadian workers or invest in new technologies that raise workers’ productivity.

“One could imagine a fee structure where the fee rises with the number of temporary foreign workers hired in a given year and with the number of years for which an employer hires temporary foreign workers,” Worswick said.

“This would send employers the message that they should seek medium-term alternatives to hiring temporary foreign workers.”

Worswick also raised concerns about a government plan to crack down on employers that abuse the program. While a good idea, he said, monitoring and enforcement will be a challenge.

“Improvement is needed on both fronts and must be factored into the program’s administrative costs,” he said. “If the monitoring costs prove too high, then it may be necessary to end the program.”

Worswick said the program should ultimately be a “two-step” approach to immigration. Successful temporary foreign workers, he argued, should be granted a share of the permanent immigration pie.

The program has come under fire in recent months after a B.C. mining company was allowed to hire 201 Chinese workers after an ad seeking Mandarin-speaking miners failed to turn up Canadian candidates. In another incident, a group of Royal Bank of Canada employees found themselves training foreigners to replace them after their jobs were outsourced by a contractor.

Many have complained that companies have become too reliant on the program and are not doing enough to ensure qualified Canadians get first crack at jobs. Designed to fill high-paying, high-skill jobs, some say it’s also being abused by fast-food franchises that are hiring foreigners to peddle burgers and doughnuts in booming regions such as Alberta.

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