Temporary Foreign Workers: Helping Or Hindering Canada’s Unemployment?

Explaining the Temporary Foreign Workers Program

Ever since the outsourcing scandal at RBC where 45 Canadian workers lost their jobs, temporary foreign workers have been a hot button issue. The Temporary Foreign Worker Program (TFWP) was created to help fill short-term skill shortages in industries with a need for highly skilled workers. Instead it appears some employers are abusing the program by bringing in workers from abroad to fill low skilled jobs. Is the TFWP working or are employers just using it to avoid paying Canadians a higher wage and investing in training?

A  Job Skills Mismatch

There’s a job skills mismatch in the Canadian labour force. This has led to unemployment and underemployment with today’s university graduates. Provinces like Alberta are begging for workers for industries like the oil sands, while provinces like Ontario are facing a labour oversupply in positions like teachers. If only more Canadians were trained for positions in demand, there wouldn’t be just a chronic labour shortfall in certain industries.

Employers are posting highly skilled positions with excellent pay and benefits, but few Canadians are taking them up on their offer. Faced with the prospect of scaling back operations, some employers are using the TFWP as a last resort. While foreign workers are being brought in to fill highly skilled positions, this isn’t the full story. Some employers are bringing in foreign workers to fill low skilled positions in the fast food and retail sector. This goes against the purpose of the TFWP and is leading to lower wages. Imagine this: instead of paying Canadians $20 per hour to attract Canadians to work at Tim Hortons in Alberta; foreign workers are being brought in at a fraction of the cost.

Changes to TFW Program

The controversy surrounding RBC lead to several recently announced changes to the TFWP. Employers are no longer allowed to pay foreign temporary workers at 15 per cent wage discount; their wages must now be the same as Canadian workers. There is more red tape being added, as the Accelerated Labour Market Opinion process has been suspended and the application fees have increased. The government is also scrutinizing employers more closely by asking additional questions on applications and is more willing to revoke any work permits where there’s proof employers are abusing the program.

Addressing The Employment Gap

According to former Bank of Governor Mark Carney, the solution to the foreign workers shortage is to pay Canadians a higher wage and to improve productivity. This is a sentiment echoed by many think tanks like the C.D. Howe institute, who constantly mention the importance of closing the productivity gap between Canada and the U.S. The new rules are a step in the right direction, as the government will keep a close eye on whether foreign workers are being brought in to fill jobs in the oil sands or the sector. Canada’s labour force needs to be more mobile and willing to move to provinces that are booming like Alberta where jobs are in abundance. Employers also have to be willing to invest in training for their employees to acquire the skills.

Both Sides Of The Coin

While a lot of Canadians see the TFWP as a threat to Canadian jobs, it can actually save jobs from going abroad. By allowing employers to fill positions with foreign workers, it can help save the positions of Canadian workers and avoid employers from moving their business to another country. If Canada is looking to attract foreign capital in the form of business, the TFWP could help encourage businesses to open shop here. If businesses simply can’t fill the positions and are handcuffed with the new rules for bringing in foreign workers, they may simply to choose to take their business elsewhere, which definitely does not help the Canadian economy.


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