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MP Jason Kenney, Minister of Employment and Social Development meets with The Globe and Mail's editorial board in Toronto, Ontario, Tuesday, Jun 24, 2014. (Photo by Kevin Van Paassen/For The Globe and Mail) (Kevin Van Paassen For The Globe and Mail)
MP Jason Kenney, Minister of Employment and Social Development meets with The Globe and Mail's editorial board in Toronto, Ontario, Tuesday, Jun 24, 2014. (Photo by Kevin Van Paassen/For The Globe and Mail) (Kevin Van Paassen For The Globe and Mail)

Globe editorial

Temporary foreign workers, and the kind of Canada we want Add to ...

Give the Harper government credit: It may have been the lead author of a quietly growing mess known as the Temporary Foreign Worker program, but it is now reversing course and completely overhauling the scheme. Changes to the rules introduced last week by Employment Minister Jason Kenney and Citizenship and Immigration Minister Chris Alexander promise to dramatically scale back the parts of the program most open to abuse.

The long-standing program of temporary farm workers will remain; many in agriculture have grown dependent on it. The live-in caregiver program is under review. But the stream that allows employers to bring in low-skill workers to perform low-wage jobs, usually in service industries, is being cut back to a fraction of its current size, with Mr. Kenney telling The Globe editorial board in a meeting this week that he can foresee a day in the not too distant future when that part of the program could be eliminated entirely.

There are countries in the world that rely on guest workers to do almost all of the unpleasant work that needs doing. Qatar is perhaps the most extreme example – a state where most of the labour force is made up of foreign guests who can never become citizens, and who face abuse, exploitation and the threat of being deported if they make trouble for the boss. Qatar is not a model to emulate.

The model for Canada should be … Canada. This country has for decades consistently had the developed world’s highest or near-highest levels of legal immigration. Those immigrants are able to relatively quickly become Canadians, going from strangers to neighbours, and enjoying all of the legal rights of their fellow citizens. It’s a fair bargain for newcomers to Canada, and an even better arrangement for the rest of us, because a society with a permanent underclass of second-class non-citizens is a coarse and mean place. There are compelling social reasons to want to live in a country where immigrants are Canadians, not permanent guests.

Are there economic arguments for a program that brings in a lot of cheap, temporary foreign labour? Yes. And arguments against it, too. The case in favour has been made time and again by the food service industry in Western Canada, where labour markets are tight: Without cheap foreign labour, says the industry, restaurant wages will rise, and your steak will cost more. The government’s response? It largely agrees.

Mr. Kenney has been going around the country pointing out that higher wages aren’t necessarily a bad thing, particularly in a growing economy, and particularly for those who might be earning those higher wages, not to mention that it’s how free markets naturally balance tight supply and rising demand. He’s right. The objective of government policy should not be to drive down market wages.

And the Temporary Foreign Worker program, at least when it comes to some low-skill jobs in Western Canada, does appear to have had exactly that effect. According to Mr. Kenney, median wages in Alberta have grown at far above the rate of inflation since 2006 – that is, we remind you, a good news story – but over the same period, wages in the food service sector, which leans heavily on the TFW program, have barely budged.

As Mr. Kenney put it, if the McDonalds in Fort McMurray has to pay a higher wage than its counterparts in other parts of the country, because the economy there is booming and labour is tight, that’s the free market in action.

Free markets are dynamic systems, and the price signals they send out cause both workers and employers to make constant adjustments. If there are more jobs in Alberta offering higher wages – and there are – then Canadians outside Alberta will have an incentive to move there, and Albertans not in the labour force will have an incentive to join. And that’s exactly what’s happening in most sectors of the Western economy. Alberta, along with Saskatchewan, is pulling in high levels of both immigrants and interprovincial migrants. What’s more, the two provinces have the country’s lowest levels of unemployment, and the highest levels of labour force participation.

Mr. Kenney thinks that Western Canadian employers in food service and accommodation, two big users of the foreign worker program, will respond not only by raising wages, but also by actively recruiting new workers from some available but untapped pools. Those include students who want that first part-time job, large numbers of natives who want in to the work force but are currently shut out, and Canadians living in areas of high unemployment – which at this point covers virtually all of the country east of Manitoba.

Faced with the possibility of higher market wages, employers can also respond with one of the things that drives our capitalist system, and which leads to even higher living standards: They can innovate. They can become more efficient, which means figuring out how to get more output from each input of labour. In a low-wage economy, most gas stations would be full-service – as they once were – and not self-service, because labour would be cheaper than the technology that allows customers to dip their credit cards and pump the gas themselves.

Canada has grown and prospered by being an immigration country. The problem with temporary foreign workers is not that they are workers. It is that they are temporary and foreign, tied to their employers like indentured servants, and constantly under threat of losing their right to work, and their right to remain in Canada, if they displease that employer. Canadians in the work force, including immigrants, suffer from none of those disabilities. Canada needs more citizens, fewer guests.

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