Social Policy in Ontario

Why are companies competing with EI for workers?

Posted on March 28, 2016 in Debates

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TheGlobeandMail.com – Opinion
Mar. 28, 2016.   Kevin Lacey

Kevin Lacey is Atlantic Canada director with the Canadian Taxpayers Federation.

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Charlotte County in southwestern New Brunswick is one of those places in the Maritimes where every town is pretty enough to put on a postcard. From the port city of Saint John to the border town of St. Stephen, picturesque small towns line the shores of the Bay of Fundy and Passamaquoddy Bay.

The fishing industry is a major economic driver here. Blacks Harbour is home to Cooke Aquaculture as well as Connors Brothers, the last producer of canned sardines in North America, and Paturel on Deer Island processes lobster. During the season, they employ hundreds of people in fish plants.

But like most Maritime small towns, they are struggling economically. Charlotte County’s official unemployment rate is 9.5 per cent. That’s 30 per cent higher than the national average. New Brunswick as a whole has the third-highest unemployment rate in all of Canada. The province averaged 32,208 people a month collecting regular employment insurance (EI) benefits in 2015.

Yet, despite an overabundance of people not working, some New Brunswick businesses, like fish plants, say their job ads go unanswered.

Fish plants have responded over the years by bringing in hundreds of temporary foreign workers (TFWs) from Romania, Vietnam or the Philippines to fill vacant jobs. Now owners of some fish plants say a policy by the previous federal Conservative government that limited the number of TFWs in areas of high unemployment to promote the hiring of local workers has choked their supply of cheap and reliable labour.

The problem is apparently so bad that one fish plant simply chucked 3,000 pounds of lobster into the garbage because they claimed they couldn’t find people to process it.

Temporary foreign workers are attractive to an employer because the worker has virtually no rights. Once they come to Canada to work, a TFW can’t leave one company for a better job elsewhere and they can’t quit or they’ll be sent home. Unlike Canadians and other newly arrived immigrants, temporary foreign workers have one choice to make every morning: do the work for the pay on offer or be sent home.

The plea for more TFWs has been answered, at least temporarily, by the Trudeau government. Just before the Liberals introduced their first budget, they eased the TFW restrictions on the seafood industry, allowing fish processors to bring in unlimited foreign workers for six-month periods instead of the previous four.

But a temporary solution is not what users of the TFW program really want. What they want is to be able to bring in workers year round to avoid Canadian workers all together.

This policy would drive down wages and cause more people looking for a decent paycheque to move to bigger centres, or Central and Western Canada. This, in turn, would reinforce the argument of Atlantic Canadian seafood processors that they cannot find enough local workers and increase pressure on Ottawa to further increase the number of TFWs.

It does not make sense to allow these companies to fly in hundreds of workers from around the world while Canadians are at home unemployed and collecting benefits. Foreign workers should be a last resort to a company’s labour-market problems, not the first.

Rather than opening the gates to more TFWs, the government and fish-processing companies should look for ways to incentivize work and get people off EI.

A recent advertisement for shellfish processors at Paturel says they’ll pay $11.25 to $13.93 an hour.

Unemployed Canadian workers have choices – they can work for those low wages, work elsewhere or work for a few weeks a year and collect EI. In Charlotte County, you need to work only 20 weeks to get 44 weeks of benefits.

In effect, companies are competing with the EI program in order to convince people to come and work. After all, why work for $11.25 if you can collect EI instead? Fixing EI is where Ottawa should focus its policy reforms instead of making it easier for companies to bring in more TFWs.

This problem is well known in this region, but politicians and companies sense EI is a touchy subject. So rather than address it, they find it easier to just fly in workers to fill vacant jobs.

< http://www.theglobeandmail.com/opinion/why-are-companies-competing-with-ei-for-workers/article29388671/ >

Tags: economy, featured, ideology, immigration, participation, standard of living

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