Bank of Canada Governor Mark Carney stepped into the debate over the expanded use of Canada's temporary foreign workers, advising against developing "overreliance" on using labour from abroad to fill low-paying jobs.
The outgoing Bank of Canada governor made the comments in his final appearance before the House of Commons finance committee. In July, Mr. Carney will take on a new assignment as governor of the Bank of England.
The Conservative government is in the midst of reviewing the controversial Temporary Foreign Worker Program, and reforms are expected to be announced in coming months. Recently released data show the program is now heavily used across all sectors of the economy, including by fast-food restaurant owners who say they can't find enough Canadians to fill vacant positions.
But Mr. Carney countered that the answer to low-skilled labour shortages is to offer better pay for workers.
"One doesn't want an overreliance on temporary foreign workers for lower-skilled jobs," he said. "It is important over a reasonable time period to ensure that the market adjusts, and then there will be productivity and other adjustments that ensure that Canadians are paid more and that we are a more productive economy as a whole."
Mr. Carney didn't comment on the Canadian program specifically.
In general, he said the main purpose of the foreign worker program should be to help companies fill high-skill jobs for which there simply are too few Canadians who are adequately trained. The program also should fill "temporary gaps" in the labour market, but avoid creating incentives for companies to avoid training Canadian workers, he said.
He added that the government must guard against abuse; otherwise, the effect will be to put downward pressure on wages, which in turn leaves companies with an excuse to avoid becoming more productive because they can keep up with demand by hiring cheap labour.
Prime Minister Stephen Harper recently expressed concern with the growth of the program and has said changes are in the works.
The number of foreign workers in Canada is actually higher than is often reported. Recent media reports have focused on one Citizenship and Immigration statistic, which shows the number of temporary foreign workers has more than tripled, growing to 338,000 as of Dec. 1, 2012, from 101,000 in 2002.
But that statistic uses Dec. 1, 2012 as the date for yearly comparisons, meaning it leaves out the large number of agricultural workers who come to Canada during the summer months and leave before the Dec. 1 head count.
The department also counts the total number of foreign workers who came to Canada at some point during a calendar year. By that measure, the department counted 446,847 foreign workers in 2011, up from 186,753 in 2001.
Ashley Zavisha, general manager of Zavisha Sawmills in Hines Creek, Alta., said recent criticisms of the program should not overshadow its value. "When you do see articles or newsclips, it's disturbing because it's a very important program for small business and if we were to lose it, I would fear the survival of many businesses, even the Alberta economy in general."
Generally, about 12 of his sawmill's 50 employees are temporary foreign workers.
Though critics say the program allows employers to keep wages low, Mr. Zavisha says he often pays foreign workers more than Canadians because he must promise the government he will pay them the average wage – which is higher than what entry-level workers would normally make.