Gord Nixon, the CEO of the Royal Bank of Canada, may have indirectly sealed the fate of hundreds of small-and medium-sized businesses across the country last month when he decided—no doubt at the urging of the bank’s public and government relations staff—to apologize for RBC’s decision to outsource 45 information technology positions, including at least one job that ended up being handed over to a temporary foreign worker.
Faced with public outrage at a time when unemployment is stuck at 7.2 per cent, the normally business-friendly Conservative federal government moved quickly to make its Temporary Foreign Worker Program more difficult and expensive for companies to access. But for all the populist headlines about foreigners being parachuted into the country to steal jobs from Canadians, the reality is that many businesses remain desperate for employees and, more often than not, the jobs going to temporary foreign workers are positions Canadians are either unable, or simply unwilling, to fill. “The real effect of this is going to be frustration of business owners,” says Audrey Guth, the director of Toronto’s Diamond Global Recruitment Inc., which specializes in helping Canadian businesses bring in foreign workers. “If you make it too difficult, businesses are going to close down.”
Many of the 213,516 temporary foreign workers who came to Canada last year filled low-paying, menial jobs, according to data provided by Citizenship and Immigration. More than 31,000 were agricultural workers. Another 6,200 were nannies, while 4,000 became counter staff or fast-food cooks. Others filled higher-paid skilled positions—often, recruiters say, because there aren’t enough Canadians with the necessary training, or because the jobs are located in smaller, more remote communities that don’t appeal to Canada’s highly urbanized population. They include truck drivers (1,620 workers), mechanical engineers (1,490) and computer programmers (2,005). The trend has created a distorted labour market. In Newfoundland and Labrador, for example, employers brought in 2,285 temporary foreign workers last year, up 75 per cent from 2008, despite an unemployment rate of 12 per cent in the province, nearly double the national average.
While figures like that lead critics to question whether Ottawa’s program is being abused, Guth and others argue that, with few exceptions, employers would prefer to hire locally, saving themselves time and money. The problem, Guth says, is that applicants are nowhere to be found. “You can’t say we’re taking jobs away from Canadians when we’ve giving them every opportunity to fill these jobs first.”
It’s doubtful the reforms being introduced by Ottawa will do much to address the underlying issues. Among other things, employers seeking to tap temporary foreign workers will now pay more for work permits and higher fees to obtain a “labour market opinion” from Human Resources and Skills Development Canada, which is needed to verify a lack of available workers. Employers will also be barred from paying foreign workers as much as 15 per cent less than the prevailing wage for skilled positions, and five per cent less for lower-skilled work—a measure originally intended to offset the artificially high wages some employers were being forced to pay to attract applicants in boomtown communities.
Industries facing a chronic lack of workers say most companies are already using the program the way it was intended. The roughly two per cent of the 1.1 million restaurant jobs in Canada filled by temporary foreign workers are concentrated in the Prairies, where the lure of the oil sands has peeled unskilled staff from other employers, according to the Canadian Restaurant and Foodservices Association. (Alberta’s unemployment rate is just 4.4 per cent.) “In Ontario, virtually none of our members are using the program,” says Garth Whyte, association president. “But there was a major hotel in Alberta who phoned us almost in tears because a big oil company just snatched up 40 of their employees.”
Whyte argues it’s a myth that foreign temporary workers are cheaper to use. Companies must first pay to advertise the positions locally in newspapers and on national job boards. They then incur the costs associated with navigating the government’s program, often with the help of a recruitment agency.
Finally, they must pay for the workers’ travel to and from Canada. The entire process can take up to six months, while the position sits vacant, resulting in lost sales. “If you’re spending thousands of dollars to bring in temporary foreign workers, you’re obviously not doing it to save money,” Whyte argues.
It’s not just that the Temporary Foreign Worker Program is expensive for employers to use. The bigger hurdle is the lack of Canadians willing to take on the kinds of jobs the program is used to fill. Mobility is one concern—a high rate of home ownership means fewer people are freely ready to pull up roots and move for work, while some have suggested cold weather in places like northern Alberta is also an impediment. But Employment Insurance is another. There is a demonstrated reluctance of people to move for jobs. Consider the hue and cry that went up when Ottawa sought reforms that require recipients to look for work within a one-hour commute from their home. If unemployed people aren’t willing to drive an hour for a job, they aren’t going to move across the country. For that matter, there’s evidence many Canadians would rather pick up EI than take a job in their own community. Diane Finley, the minister of human resources and skills development, was informed that Alberta employers received 1,261 confirmations for temporary foreign-worker food-counter positions in January 2012 just as 350 people made a claim for EI in the same occupation and province, according to documents obtained by the CBC.
Having to turn to foreign workers to fill McJobs is one thing, but as the data from Citizenship and Immigration shows, even engineers and computer programmers are in short supply in parts of the country. It all points to what Kevin McQuillan, a professor of sociology at University of Calgary, and others say is a widening “mismatch” between what employers are looking for and the types of jobs Canadians workers want to fill. “We are turning out huge numbers of Canadians out of our colleges and universities, and the great majority of people we bring in as permanent immigrants are well-educated,” he says. “But we need to look at how well our educational institutions are preparing students for the labour market. We need to convince young people and their parents to pay attention to the labour market when deciding what to study.” While he doesn’t dispute that many employers have a difficult time filling positions, McQuillan questions whether leaning on temporary foreign workers is anything but a Band-Aid solution. “I don’t think we want a society where a big part of our economy is being cycled in and out for a few years at a time,” he says.
Employers will need to do their part too. In the case of skilled work, many companies have decided it’s more cost-effective to hire skilled workers on a temporary basis rather than face the prospect of having to retrain them or pay for skills upgrades down the road. A recent study by the Conference Board of Canada found that investment in employee training has fallen nearly 40 per cent in Canada since the early 1990s—a trend that obviously needs to change. Meanwhile, fast-food restaurants and retail stores may need to consider offering better wages and benefits if they’re ever going to attract Canadian employees in the numbers they require to staff their businesses, McQuillan argues.
That won’t be easy in a country where a price hike of a few cents at the local gas station or coffee shop is a recipe for angry customers. “It’s easy to say that,” said one manager of a busy oil and lube chain in Alberta that sources half of its employees through the Temporary Foreign Worker Program (he asked his name not be published lest it generate an RBC-like backlash for his business). “But if everything you purchased in a day suddenly went up 20 per cent, what do you think people would do?”