Just like doctors, the guiding principle of governments should be “do no harm.”
And yet the federal government is now belatedly acknowledging that two of its signature workplace programs may be making the country’s employment landscape worse, not better.
With the changes to the temporary foreign workers program and last year’s employment insurance reforms, Ottawa is making it clear that it isn’t happy with the results, nor the public backlash.
The Conservative government announced on Monday changes to the temporary foreign worker program, which has become a lightning rod in the wake of awkward revelations about the outsourcing of IT jobs by Royal Bank of Canada and a B.C. mining company’s use of the scheme to import 200 Chinese miners.
With MPs hearing it from angry voters, the government said it will suspend permits handed to companies that are found to be abusing the system and will make it much tougher for employers to pay temporary foreign workers less than Canadians would make.
Ottawa also plans to introduce fees so that employers will help cover the administrative costs of the program.
There is now evidence that the two programs may be inhibiting labour mobility, depriving Canadians of opportunity, preventing the untrained from acquiring skills and driving down wages.
Business groups are already warning that the changes to the temporary foreign worker program go too far, tying their hands in a tight job market.
Ottawa’s foreign worker program has doubled in the past six years, enabling employers to import more than 446,000 workers in 2011 into a country where 1.4 million people are officially unemployed. And yet experts say they are shocked to hear stories of landscapers in Calgary who can’t find labourers and building owners in Ottawa struggling to find janitors – even at wages as generous as $20 an hour.
“If Canadians can’t fill low-skilled jobs in hotels and restaurants, the labour market is not working as well I thought,” lamented David Gray, a labour economist and professor at the University of Ottawa. “It really does speak to the need for structural reforms that go beyond just the EI program.”
Last year, Ottawa tightened the rules for frequent EI claimants, including seasonal workers. Some will be required to go further afield or accept lower wages.
The extent of the problem dwarfs the changes announced so far, according to Prof. Gray. He pointed out that the EI changes target mainly seasonal workers, who make up less than 5 per cent of the Canadian work force.
The temporary foreign worker program has become a convenient “out” for employers unwilling to pay higher wages, he argued. “It should just address only acute labour shortages,” he said The objective, Prof. Gray said, should be to fill gaps among highly skilled workers and find people to do very low-skill work that Canadians won’t do for any wage, such as farm labourers.
The proposed changes to EI may also prove inadequate – in spite of loud protests, mainly in Quebec and Atlantic Canada, that the reforms go too far.
The problems of EI may be even more intractable. EI’s fundamental failing is that it helps too few workers and employers. As a 2011 study by the Mowat Centre at the University of Toronto concluded, the program’s benefits are spread far too unevenly across the country because they’re determined by the local unemployment rate. The rules also unfairly penalize younger and part-time workers. A majority of Canadian workers will never enjoy the benefits of EI, even though they pay dearly for it.
“The federal government has moved forward with tepid changes that will do very little to encourage a more efficient labour market,” Mowat said of last year’s EI changes.
Just like the temporary foreign worker program, too many employers have learned to bend the system to meet their own needs, at the expense of the country’s best interest.
Auto makers, for example, use EI to subsidize the retooling of their plants by essentially mothballing their work force. Municipal school boards use it to lay off bus drivers, cafeteria workers and cleaners every summer.
The government has more work to do.