Justin Trudeau has some advice for Justin Trudeau.
Mr. Trudeau, in 2023, leads a federal government that has overseen a surge in the country’s reliance on low-wage temporary foreign workers. The federal Liberals stoked this increase: they loosened the rules early last year. According to the latest data, reported by The Globe last week, Ottawa has approved the hiring of almost 80,000 low-wage foreign workers in the year after the rules were eased. That’s triple the level of the 12 months before the change.
The Mr. Trudeau of 2014 would not be happy. Amid debate at the time over rising reliance on foreign workers, Mr. Trudeau’s position on the opposition benches was clear. “The Temporary Foreign Worker Program is broken,” he declared. He argued that it “drives down wages” and called for the program to be “scaled back dramatically.”
Mr. Trudeau circa 2014 was exactly right, on both moral and economic considerations. First, bringing in vulnerable people from abroad to work low-wage jobs, for short stints rather than as a road to citizenship, runs counter to the values of this country’s immigration system. Second, the use of such workers by businesses undermines the broader economy. It’s a hidden subsidy, one that discourages innovation and artificially depresses the pay of low-wage workers.
The renewed reliance on low-wage foreign workers comes as immigration to Canada is at its highest sustained level since the early 20th century. The population in June cracked 40-million, after the country grew by more than one-million people in 2022, a first, according to Statistics Canada. But Canada hasn’t properly prepared for such an influx. Meanwhile, economic growth per capita has stalled, and productivity is in decline.
There are some positive categories of temporary foreign workers. The International Mobility Program includes people such as postgraduate workers. Some people are working with student study permits. Among other foreign workers, some are truly temporary, with seasonal work in agriculture, and some garner higher-wage roles in industries like technology.
It is low-wage foreign workers who are of particular concern, in 2014 and today. These are people employed as cooks and in other service jobs. From 2011 through 2013, the Harper government approved about 65,000 low-wage temporary foreign workers annually. In 2014, Ottawa tightened the rules. Approvals in 2015 fell to about 10,000. From 2019 through 2021, approvals hovered around 20,000 a year. Now it’s at more than 20,000 every three months, after the federal Liberals allowed businesses to more easily hire foreign workers.
To hire a low-wage foreign worker, a business has to show Ottawa it cannot find a local to fill a job. But it’s a rubber-stamp system. Ottawa relies on what’s submitted by the companies; almost every request is approved. Previously, there’s been weak oversight. In 2017, the Auditor-General said Ottawa wasn’t doing enough to ensure foreign workers were hired only as a last resort.
Relying on low-wage foreign workers is an easy answer that avoids hard questions, for the country and businesses. Because workers are tied to their employers, “they can be exploited very easily,” University of Waterloo economist Mikal Skuterud has said. Businesses are able to avoid investments in worker training, higher pay, and technical innovation by resorting to low-wage foreigners. Everyone hears a lot about the labour “shortage” but in a properly competitive economy, businesses would have to offer more to potential employees rather than claim they can’t find anyone here and bring someone in from elsewhere.
Further, new research that looks back at the 2010s shows how the use of low-wage foreign workers pushes down earnings of low-wage Canadians employed at the same company, who themselves are often recent immigrants.
This space has long been against the reliance on low-wage foreign workers. In 2014, we called out a “permanent underclass of second-class non-citizens.” This year, as the same problems re-emerged, this space again argued that the country must not rely on a Band-Aid approach. The bottom line is low-wage foreign workers allow inefficient businesses to stay inefficient. Canada needs to once more end its growing dependence on low-wage temporary foreign workers. It’s bad for workers, bad for the country today and bad for the country’s future.
Mr. Trudeau needs to take Mr. Trudeau’s advice.