Employers are rushing to fill jobs with temporary foreign workers

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Canadian companies are ramping up their use of the Temporary Foreign Worker program to fill jobs after its contentious expansion by the federal government.

In the second quarter of this year, employers received approval to hire about 45,200 positions through the TFW program – the most since at least 2017, according to a Globe and Mail analysis of figures recently published by Employment and Social Development Canada, or ESDC. The April-to-June quarter tends to be a slower period for approvals: Many companies seek authorization in the winter, ahead of seasonal hiring for the summer.

This past spring period, however, was booming: TFW approvals were more than double those of the same period in 2018 and 2019.

The second quarter coincided with the largest changes to the program in many years. In April, Ottawa broadened access to temporary foreign labour – and in particular, low-wage workers – which it said was aimed at alleviating labour shortages.

In one of the changes, companies could hire up to 20 per cent of their staff through the TFW program’s low-wage stream, up from the previous 10-per-cent cap. And in seven industries with acute labour shortages – such as restaurants, construction and hospitals – the cap was moved to 30 per cent for a year.

The move was cheered by business lobby groups, who have complained about labour availability for much of the past two years. At times this year, there were roughly one million job vacancies in Canada, but also the lowest unemployment rates on record. Vacancies have recently started to drift lower as the economy slows.

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But the TFW expansion was also criticized by many economists and labour advocates. They argued that it amounted to a kind of corporate bailout, shielding employers from raising wages or making investments in their business that boosted productivity.

It “is a wage subsidy to the least productive sectors of our economy,” said Miles Corak, an economics professor at City University of New York and a researcher of Canadian social policies, by e-mail.

“Labour shortages are not a problem to be solved,” he added, but “an opportunity to increase the use of capital and new technologies in some sectors, and enhance the skills and pay of workers in others.”

As usual, farms were the biggest source of TFW demand. In the second quarter, companies were approved to hire more than 10,000 general farm workers, easily the highest of any occupation. Food processors were also very active. Olymel LP, a Quebec-based meat packer, was approved for 386 hires, the most of any company.

The restaurant industry is increasingly turning to the TFW program. In the second quarter, employers were approved to hire 3,100 cooks, an increase of 116 per cent from a year earlier. They were also authorized to hire more than 2,500 food-service supervisors, an increase of 135 per cent. Krawchuk Enterprises Inc., the owner of McDonald’s Corp. restaurants in British Columbia, was approved for 45 of such roles, all in the low-wage stream.

To hire through the TFW program, employers must submit a Labour Market Impact Assessment to the federal government to demonstrate that they can’t find local workers to fill positions. The ESDC numbers reflect positive assessments. The employment department removes employers of caregivers and business names that include personal names from its public dataset of positive LMIAs.

After an approval, temporary foreign workers must get the appropriate work permits. The ESDC numbers show the number of approved positions, rather than the number of workers who received permits.

Of late, the immigration system has been stymied by a backlog of applications, causing frustration for employers, hopeful workers and international students as they await decisions.

“The processing has become outrageously slow,” said Mario Bellissimo, founder of Toronto-based Bellissimo Law Group. “Employers are really struggling, as are workers, trying to get the papers and it’s just not moving fast enough.”

The federal government has made other decisions to bolster the pool of foreign labour. Earlier this month, Ottawa said it was temporarily lifting the 20-hour weekly limit on the number of hours that international students could work off-campus while postsecondary classes are in session. Mr. Bellissimo said foreign students are ripe for exploitation and that the expansion devalues their reason for being in Canada: to study.

“We’re already seeing individuals calling us, worried that if they don’t work the extra hours, they’re going to lose their jobs,” he said.

Jim Stanford, director of the think tank, Centre for Future Work, was critical of recent government decisions to boost the availability of low-cost labour.

“Immigration done well can be a huge source of economic progress, including for our labour market,” he said. “But viewing immigrants as a short-term solution to a shortage of cheap labour is absolutely the wrong way to do it.”

Editor’s note: An earlier version of this story attributed the temporary foreign worker approvals data to the immigration department. In fact, they came from the employment department.