Beginning Thursday, Canadian companies will have a harder time using non-Canadians to fill jobs.
In late August, Ottawa tightened the eligibility criteria for its Temporary Foreign Workers Program in response to mounting criticism over the program’s dramatic expansion in recent years. On Sept. 26, three key program changes take effect.
Critics contend the program does not serve the interests of workers and was only expanded due to pressure from corporate interests. Lobbyists say temporary foreign workers remain essential to addressing critical labour shortages and the tighter rules make it harder for beleaguered companies to operate.
“[T]his government is committed to evidence-based policymaking,” said Duff Conacher, co-founder of Democracy Watch, a non-profit that advocates for government accountability.
“But they made these changes [to the Temporary Foreign Worker Program] without consulting with all stakeholders … And if they had done that, they likely would not have made the changes that they made. Instead, they made a secret deal with big business lobbyists.”
Dramatic expansion
To use the Temporary Foreign Worker Program, employers must complete a Labour Market Impact Assessment that demonstrates they have been unsuccessful in trying to hire “qualified Canadians” to fill specific roles.
The program has been in place since 1973. But in 2022, the government changed some of the eligibility criteria, resulting in a dramatic expansion of the number of people admitted under the program. In 2023, Ottawa approved nearly 240,000 temporary foreign workers, up from about 133,000 approvals in 2021 and 90,000 in 2016.
In a statement to Canadian Affairs, the government explained the rationale for changing the program as follows:
“In the immediate wake of the pandemic, the Government responded to low unemployment rates of below 5% and historically high job vacancies of over 1 million by temporarily adjusting a number of policies to enable employers to have access to the workers they needed in a recovering economy,” said Maja Stefanovska, a spokesperson for Employment and Social Development Canada.
However, Mikal Skuterud, an economics professor at the University of Waterloo, says labour shortages are generally not a good justification for bringing in foreign workers.
“When there’s more supply than demand for labour, then there’s a scarcity — not of workers, but of jobs. In that situation, we say to workers that they have to do what they can to compete for those jobs — to get out there with their résumés. That’s a very healthy part of the economy,” he said.
“But for some reason when there’s more demand for labour, we don’t tell businesses that they need to compete. We don’t say, ‘Well if you can’t compete, then you’re just going to fail,’ which is also a healthy part of the economy. That’s capitalism.”
Frances Woolley, an economics professor at Carleton University, agrees.
“If you hear somebody say, ‘I’m facing a labour shortage,’ there’s a second part of that sentence which is often unstated, which is, ‘I’m facing a labour shortage at the wage I’m offering.’
“So there’s always two parts to that. There’s the part about the workers who are available, but it’s also about the wages that are being offered and the other expectations of the employer,” she said.
In Conacher’s view, powerful industry groups — combined with lax lobbying laws — are what enable corporations to persuade Ottawa to respond to labour shortages.
The changes to the Temporary Foreign Worker Program were “facilitated by Liberals who used to be cabinet ministers or playing other senior roles in the party,” he said. “[T]he lobbying laws and ethics rules allow for these kinds of decision-making processes that really are corrupting and not democratic or ethical.”
‘Ain’t no such thing’
Going forward, Ottawa will no longer process Labour Market Impact Assessments for low-wage jobs in metropolitan areas where the unemployment rate is six per cent or higher. (The rules include some carve outs for industries such as construction and health care.)
Employers will be prohibited from hiring more than 10 per cent of their workforces through the program in low-wage jobs — down from a current cap of 20 per cent. And employees hired through the low-wage stream will be permitted to work at most one year for a firm, down from a previous two.
“The [labour market] conditions have shifted, and the number of job seekers in key sectors now often exceeds available positions,” government spokesperson Stefanovska told Canadian Affairs.
Some of Canada’s largest corporate advocacy organizations, which lobbied for Ottawa to expand the Temporary Foreign Worker Program, oppose the recent changes.
“In remote, rural and touristic areas where there [are] chronic labour shortages, the 10% cap and the 1 year maximum employment means that legitimate use of the program will cost twice as much (since the process will need to be done every year),” said Maximilien Roy, vice-president at industry advocacy group Restaurants Canada, in an emailed statement to Canadian Affairs.
“It is making the life of restaurant operators harder, in an already challenging context.”
Darrel Reid, vice-president of public affairs at the Progressive Contractors Association of Canada, told Canadian Affairs in an emailed statement that the program changes will not affect the construction industry, due to it being high-wage work in an exempt industry.
“[T]here ain’t no such thing [as low-wage work] in the construction sector — or at least with our members,” he said, referring to the 140 contractors that the association represents.
“TFWs are paid the same rate as local workers. So labourers might start at $29-30/hour — or more, depending upon the job and location. Also, it is my understanding that the construction sector has been exempted from these changes.”
Both Roy and Reid say their organizations have been lobbying Ottawa to make other reforms to the Temporary Foreign Worker Program.
“We’ve been lobbying federal government for at least 10 years,” Reid said. “Our major concerns have been the shortage of skilled workers in a number of fields … [This shortage] is becoming a limiting factor in the work our members are able to take on.”
“We have been urging easier access to people within the skilled trades categories, more allowable workers within the overall program, more flexibility for provinces to bring in the candidates needed for construction in their jurisdiction, a smoother path to citizenship, more streamlined application processing, and some sort of mitigation for the $1000 application fee,” he said.
Roy says the government should be placing a greater emphasis on helping newcomers and workers who are already in Canada to acquire the language and skills training they need to join the workforce.
“[T]here’s over a million open work permits right now in Canada — people with open work permits that are not working,” said Roy.
“We’re really trying to ask the government, let’s find a way to get these people to work and join our industry.”
