Stephen Harper should have known that the politics of the temporary foreign worker program would overwhelm its economics. It has everywhere else. In this age of rising job insecurity and slow-growing wages, did he think Canadians would simply roll over?
Bringing in 200,000 foreign workers every year to perform jobs Canadians are supposedly unable or unwilling to take was a controversial idea well before the Royal Bank of Canada (with a record $7.5-billion profit in 2012) turned out to be one of the beneficiaries. When the CBC revealed the bank was using a foreign IT worker as a precursor to outsourcing jobs to India, a simmering debate exploded into national outrage.
Maybe it was the bank CEO with a $12.6-million pay package defending his actions that did it. The contrition, when it came, could not put the genie back in the bottle. Suddenly, the story wasn’t about Filipino nannies or Chinese miners. It was middle-class office jobs leaving the country.
Canadians are now participants in a global labour market in which employers have access to a limitless pool of workers from whom they can demand extreme flexibility. This is seen as the key driver of income inequality, depressing wages for everyone except for those at the very top. How did Mr. Harper think Canadians would feel about the massive expansion of this country’s temporary foreign worker program?
Whether or not there’s an economic need for more foreign labour – and serious shortages in some sectors makes it hard to deny there is – governments must be sensitive to the zeitgeist. Canadians are anxious about the future. They haven’t had a raise in ages and never felt so overworked or expendable.
Mr. Harper can take comfort that he isn’t the only leader trying to balance the demands of labour-starved businesses with the fears of an apprehensive work force. Australian Prime Minister Julia Gillard, who is up for re-election this fall, was facing a voter backlash as the number of visas awarded to temporary foreign workers ballooned to 125,000 in 2011-12, a 52-per-cent increase from the year before. It was an electoral disaster in the making for her Labor Party, which counts on the support of the country’s unions. In February, Ms. Gillard tightened the eligibility rules for foreign worker visas, saying the program was “out of control.”
In the U.S., the biggest obstacle to immigration reform may not be Republican resistance to providing a path to citizenship for the country’s 11 million illegal immigrants. It could be Democrats’ unwillingness to increase existing quotas for temporary foreign workers.
Republicans want to double the number of high-skilled workers brought in on so-called H-1B visas. U.S. employer demand for foreign tech workers is so high that applications for the visas exceeded this year’s quota of 85,000 within five days. A lottery system was used to award the permits.
Democratic opposition to expanding the program stems from fears that many employers are using H-1B visas with the ultimate aim of moving jobs overseas. In many cases, temporary foreign tech workers enter the U.S. to prepare companies to outsource IT functions, just as RBC appeared to be doing here.
Mr. Harper has promised to reform the temporary foreign worker program “in very short order.” Among the changes he should consider is the introduction of a cap on the number of foreign workers in each category of employment. Employers shouldn’t be allowed to pay foreign workers less than Canadians. And employers seeking to use the program should face a hefty application fee whose proceeds should be used to train Canadian workers.
It goes without saying that stepping up compliance is needed to ensure that employers don’t abuse the program, or the workers in it. Canadians need to know their government is looking out for them and isn’t complicit in undermining labour standards. Or as Ms. Gillard put it, in her best Australian, the government must “crack down on the rorts.”