The Temporary Foreign Workers program is about to get an overhaul, with Employment Minister Jason Kenney expected to bring in new rules in the coming weeks. The question is whether the minister will go in for window dressing, or whether he’ll deliver a deep and fundamental reform. The program needs the latter. It needs to be completely rethought.
The main goal of Canadian economic policy is raising Canadian living standards, including achieving an unemployment rate low enough to be called full employment, raising labour productivity and raising wages. There are real arguments over how to get there among politicians – see election, Ontario, 2014 – economists and central bankers. It’s a complicated, long-term story. But any redesign of the TFW program has to start by asking some simple questions about whether it is helping to further Canada’s economic goals: Is this program benefiting Canadians? Is it likely to raise productivity and living standards? Is it likely to lower wages?
The current system is not working as promised, but it is working as expected. In theory, the Labour Market Opinion system is only supposed to allow employers to bring in temporary foreign workers for jobs where no Canadians can be found. But in a dynamic labour market with millions of workers, it’s almost impossible for a small government bureaucracy to know how many Canadians are or are not willing and able to work the short-order cook night shift at a burger shack in Prince Albert, Sask. As a result, the process seems to have often become a rubber stamp.
A growing number of abuses of temporary foreign workers have also come to light – unpaid wages, substandard working conditions, threats of being booted from the country if they complained. These are also a logical consequence of the current system.
Not every employer is abusive. But the TFW program is almost designed to encourage abuse. Employers have far more power over temporary foreign workers than they do over Canadians or landed immigrants. An employer who is unhappy with a temporary foreign worker can get rid of them quickly and easily – and if they lose their job, the only job they are legally allowed, they will be deported. The employer brought them here – and he effectively holds the power to kick them out. People from Third World countries, working under a legal regime that practically begs their employers to bully them will – no surprise – sometimes agree to work for less and put up with more than Canadian citizens.
For most of the period from 1945 to the early 1970s, Canada enjoyed an unemployment rate that approached zero, along with rising wages and rising living standards. There are historical reason why that was so, and why replicating that story is so difficult. But there is at least one thing about the experience of the postwar economic boom that is relevant to today. In that situation of ultra-low unemployment, Liberal and Conservative governments sought to encourage immigration, including bringing more highly skilled immigrants to Canada. They did not create a massive program of importing low-wage, temporary, non-immigrant workers. Canada enjoyed extremely low unemployment for years, and that was not seen as a problem. It was an achievement. It was the whole point of a successful economic policy.
The growth of the TFW program is a recent story. Its explosion in size, covering hundreds of thousands of workers, many low-wage and low-skill, happened suddenly, over the past few years. Through a recession, the program kept on growing. Though most of the country still suffers from high unemployment and low labour-force participation, the program has continued growing. Yes, the Temporary Foreign Workers Program needs to be rethought.
What should Mr. Kenney do?
Study the issue: Take the time needed to get this right. Commission a group of experts and give them at least six months. Bring the other parties in, and borrow their best ideas. Don’t just introduce legislation in the next few weeks, backed up by nothing more than a thin press release and no actual evidence, and try to hustle it through Parliament. Learn from the fiasco of the Fair Elections Act.
Be principled: A temporary worker program should be for jobs that are temporary. There’s a logic to bringing in seasonal agricultural workers. There may be a logic to some highly skilled workers being brought in under the program, in cases where no trained Canadians exist or where the job is temporary. But burger flippers?
Shrink the program: Make it smaller. Much smaller. Cap the number allowed in each year. Let Canada’s labour market work. If employers in low-wage fields find that they have to offer compensation in excess of minimum wage to attract short-order cooks, customer-service agents and retail sales people, that’s a good thing. It will lead to higher wages for people at the low end of the wage scale, and it will also spur innovation and productivity gains. We want the market to work and to self-correct as it is supposed to, with a tight labour supply in one area of the country forcing up wages, thereby drawing in the underemployed, be they part-time students from down the road or the unemployed from across the country.
Give temporary workers more rights: Shrink the program – but expand their rights. Why not give them the right to change jobs, and even complete labour mobility within Canada, just like Canadians? Give them the power to fight back against abuse and raise their own wages.
More citizens, fewer guests: Canada was built by immigrants who became citizens, not visitors who went home. That’s our future, too.Report Typo/Error
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