Surge in foreign workers shows challenge for job training

DEMOGRAPHICS REPORTER — The Globe and Mail

Temporary foreign worker David Beattie, from Scotland installs cladding while working on the construction of a new police station in Edmonton, Monday April 30, 2012.

(Jason Franson for The Globe and Mail)

Over the past decade the number of temporary foreign workers in Canada has tripled.

The rise of temporary foreign workers, who now occupy one in 50 jobs, has become a source of controversy as the economy sputters. Critics of the program argue that it depresses wages and fosters unsafe work conditions. Employers say it provides a reliable stream of labour and fuels economic growth.

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As the government prepares a budget focused on addressing what it sees as a shortage of skills and labour, the number of jobs being filled by temporary workers can only fuel concern about Canada’s ability to train its own people.

What has not been clear is how often the government approves employer requests to import a foreign worker. Through access to information laws The Globe and Mail has learned that 79 per cent of all requests to hire a temporary foreign worker were approved in 2011, the last year for which figures are available. That’s up from 72 per cent in 2010 and 66 per cent in 2009.

With 1.3 million Canadians unemployed, critics say employers and the government have been too quick to call for temporary help from abroad.

The issue was given added political urgency after a recent B.C. court case suggested Chinese mine workers were hired ahead of experienced Canadians. In another case in Manitoba a subcontractor on a hospital project brought in foreign tradesmen, leading a union to ask how that could happen when local tradesmen are looking for work. From skilled trades to ski-lift operators and fast-food workers at companies such as Tim Hortons, temporary foreign workers now make up nearly 2 per cent of all those employed in this country.

In a prebudget letter to the Conservative caucus, Finance Minister Jim Flaherty emphasized the importance of tackling the perceived mismatch of jobs and people, saying that skills will be one of the pillars of the budget.

“There are too many jobs that go unfilled in Canada because employers can’t find workers with the right skills. Training in Canada is not sufficiently aligned to the skills employers need,” the letter states. “We will take steps to address this important issue.”

The federal government declined for weeks to divulge the rate at which foreign-worker applications are approved.

Alyson Queen, spokeswoman for Human Resources Minister Diane Finley, said the government is committed to ensuring that “Canadians always have first crack at the jobs available.”

“The temporary foreign worker program exists to help fill acute labour market needs,” Ms. Queen said in an e-mailed statement. “There is a review under way to ensure that the program is operating as we intended it to work.”

About a third of the temporary workers in Canada require a Labour Market Opinion to obtain a work permit. The LMO is the key piece of regulation that protects the Canadian labour market and before issuing an approval the government has to ensure that there really are no Canadians to fill the job. The rules say employers must advertise the job for two weeks on a national job bank and in local publications. They must also submit the number of Canadian applications they received and the reason they were rejected. If there’s a genuine job at a reasonable wage that can’t be filled by a Canadian, then an LMO is granted.

In 2011, Ottawa received roughly 100,000 requests to hire someone temporarily from overseas and gave the green light to eight in 10 applications. Those newcomers helped set a record for the number of temporary foreign workers in Canada, which hit 338,000 on Dec. 1, 2012, up from 101,000 in 2002.

The TFW program was placed under review late last year shortly after the hiring practices of HD Mining hit the headlines in B.C. In that case a Chinese company was given approval to hire 200 Chinese miners, while the union alleges it deliberately overlooked qualified Canadians. That case is still before the courts. It’s not known how many similar cases may exist. In Manitoba the Construction and Specialized Workers Union recently objected to the way a subcontractor brought in foreign workers to build part of a new hospital. With major projects such as the new museum and football stadium nearing an end, plenty of tradespeople are looking for work, according to the union. The employer, Alex Pagnotta, said he followed the rules and obtained seven or eight LMOs for Irish workers. Mr. Pagnotta said that’s not at all unusual in a province with low unemployment like Manitoba.

“The question is why would an LMO have been granted? That’s a question nobody has answered,” said Victor DaSilva, business manager with the union Local 1258 in Winnipeg. “They would have had to show proof there’s no available skilled labour in Manitoba. Where’s the proof?”

There are signs of change emanating from Ottawa. Recently Ms. Finley and Citizenship and Immigration Minister Jason Kenney held a closed-doors consultation with labour and business groups that hinted at reform. The first item on the agenda asked how the government could ensure “genuine efforts are being made to consider Canadian citizens and permanent residents for jobs prior to hiring TFWs.”

Arthur Sweetman is an economist at McMaster University and an expert on immigration policy. Although he supports the government’s recent changes to the economic immigration stream, he said it has mishandled the temporary worker file.

“I would argue the government didn’t protect Canadian workers quite as much as they should have,” Prof. Sweetman said. “I suspect they’ve been giving out LMOs a little too easily.”

Employers aren’t required to justify in detail why the Canadian applicants were turned down, Prof. Sweetman said. The process is also entirely paid for by the Canadian public, since companies pay no user fees to have their applications assessed. That should change, he said.

“To a large degree these LMOs are just rubber stamped,” said Naveen Mehta, general counsel for the United Food and Commercial Workers Canada. “There’s no checks and balances to ensure there’s a genuine labour shortage.”

In 2005, under a Liberal government, the approval rate was 87 per cent. It climbed slightly above 90 per cent in the first year of Conservative government. It remained above 80 per cent until the recession hit. The 2011 figure is just below the seven-year average of 80 per cent.

Not every approved LMO position is filled by a temporary foreign worker, though. Applicants still have to be approved for entry by Citizenship and Immigration Canada, the agency that grants the final work permit, and many abandon the process before a worker arrives.

Economist Armine Yalnizyan of the Canadian Centre for Policy Alternatives argues the program interferes with market mechanisms. If an employer needs to hire a new worker the labour market will determine the price of that work. If workers aren’t available at advertised wages, then wages may need to rise. Under new rules brought in last year, employers in some cases can now pay temporary workers 5 to 15 per cent less than the prevailing wage paid to Canadians.

“It kind of corrupts the way a market would work,” Ms. Yalnizyan said.