CIMM Committee Report

Introduction

There are restaurants closing their doors because they have no workers. McDonald's is closed at lunchtime because they have no people serving, so they just open their window.[2]

For the first time in the history of Alberta, in 2006 there were more temporary foreign workers than permanent immigrants arriving in our province.[3]

There is a new immigration and labour market reality in some regions of Canada. Labour needs are being met by growing numbers of temporary foreign workers and by people working in Canada without legal status. This new environment and the substantial expansion of the temporary foreign worker program prompted the Committee to embark on a study of temporary foreign workers and non-status workers.

In December 2007, there were 201,057 temporary foreign workers in the country, 115,470 of whom entered Canada for the first time that year (57%). While initial entries have increased overall, the increase in provinces such as Alberta (3.6 times since 2003) and British Columbia (1.8 times since 2003) is most pronounced. The table below shows entry and stock data[4] on temporary foreign workers and the number of new permanent residents for each province in 2007.

Table 1: Temporary Foreign Workers (initial entry, re-entry, and stock)[5] and permanent residents by province, 2007

These numbers suggest that temporary foreign workers are playing a role in Canadian society like never before. In the midst of the program’s widespread expansion, policy makers need to stop and ask how we got to this point and identify a vision for the future. These are the two questions addressed in this chapter.

How we got to this Point

The simple answer to this question is that there are not enough workers in Canada to satisfy the demands for labour experienced in certain sectors. However, the reality is much more complex and involves exploring the reasons for labour market shortages as well as current opportunities for immigration to Canada. These phenomena are two of the main drivers of the demand for temporary foreign workers.

A. Labour market shortages

It has reached a point... and as an economist, this is something I have never seen, and frankly, never expected to see. Businesses sometimes don't operate because they can't get money, and businesses sometimes don't operate because they can't get customers, and businesses sometimes don't operate because prices for their products aren't high enough for them to make a profit. But now, for the very first time, I am seeing businesses where all these conditions are met and they aren't operating because they can't get enough workers to do their particular business.[6]

While people perceive labour market shortages differently, they are generally in agreement that Canada faces certain demographic realities that are shrinking the available labour market pool. Disagreement arises over the question of whether enough has been done to fully take advantage of the labour force in light of this labour market reality. The Committee heard divergent views on this issue—on the one hand, witnesses suggested that employers choose to bring in temporary foreign workers rather than offer more lucrative remuneration and benefits or invest in training and recruitment. On the other hand, employers outlined significant measures taken to hire from within the local labour pool that still left them short-handed and struggling to compete.

Making the best possible use of the labour force is a shared responsibility. Witnesses identified many areas for improvement that would help to lessen the demand for temporary foreign workers. For instance, labour mobility within Canada could be improved through the use of tax incentives for relocation and harmonized occupational standards.[7] Improved foreign credential recognition would speed up employment of new immigrants.[8] Support for training and apprenticeships would help to attract young Canadians,[9] while extending employment for retirees would help to retain those more experienced.[10] Witnesses encouraged the use of various measures to reach out to under-employed groups, such as women and Aboriginal people, and gave examples of successful programs in these areas.[11] Finally, witnesses suggested that employers need to examine why certain jobs are unattractive and improve working conditions.[12] Witnesses who raised these labour market alternatives feared that temporary foreign workers provide an easy short-term solution, possibly jeopardizing investments in these other areas.[13]

Some of the employers and employer associations that appeared before the Committee gave another perspective. They underlined that labour shortages restrict business opportunities and explained how access to temporary foreign workers has been essential to stabilizing and growing business.[14] Some referred to extensive local recruitment efforts that yielded few new hires or reliable, long-term employees.[15] Others mentioned long-term recruitment investments, such as hiring a coordinator to improve First Nations relations and recruitment—measures that do not help with current shortages.[16] Several witnesses stated that temporary foreign workers are not a cheap or easy alternative, and that it would be preferable to meet the demand for labour locally.[17]

B. Immigration

We should not look to the temporary foreign worker program to deliver more than it can. Canada has a number of policy tools that can do more to increase the performance of our labour market than a dramatically expanded temporary foreign worker program. Similarly, improvements in other areas of Canada’s immigration program may produce larger and more lasting benefits.[18]

Two aspects of Canada’s immigration system may contribute to the increasing demand for temporary foreign workers. They are the backlog in processing applications for permanent resident status, and the current requirements for economic immigrant selection.

According to Citizenship and Immigration Canada (CIC), in the spring of 2008 there was a backlog of 925,000 applications for permanent residency waiting to be addressed, 585,000 of which were potential immigrants in the skilled workers category. This backlog translates into long waiting times—currently 80% of federal skilled worker applications are processed in 62 months, with 30% of cases being finalized in 21 months.[19] These waiting times are not compatible with the fast-paced business environment, so employers are turning to the temporary foreign worker program to bring workers to Canada faster.

Employers also turn to the temporary foreign worker program because it allows them to bring in a different kind of worker than that provided for in the economic immigration stream. Canada’s temporary foreign worker program began with three streams: one for seasonal agricultural workers, one for live-in caregivers, and one for people with highly specialized skills that were not available in Canada. In 2002, the federal government recognized the need for unskilled labour and introduced a pilot project (now a temporary worker program) for people with lower levels of formal training. Workers coming to Canada through these programs may not meet the selection criteria for economic immigrants in the areas of official language proficiency, level of schooling, or occupational classification.

Witnesses regularly referred to these immigration challenges in their discussion of the temporary foreign worker program. They encouraged the Committee to push for a more efficient immigration system that responds to labour market demands.[20] Some expressed concern about the emergence of what is perceived to be a two-tiered system, providing access to permanent residency to the educated and highly skilled while leaving low skilled workers with only temporary employment options.[21]

I had the owner of the Tim Hortons restaurant along Albert Street say to me, “John, I don't need a doctor, I don't need a lawyer, I don't need an accountant, but I do need somebody who can pour coffee. That's what I need.”[22]

We know that quite often our agricultural workers do not even meet the basic admissibility criteria. I think that in future it might be worthwhile to develop this gateway, to enable these people to become Canadian citizens.[23]

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Vision of the Future

Immigration is not about filling labour market shortages with just-in-time labour. CIC is not a temp agency. We should be building a nation of active citizens.[24]

Temporary foreign workers contribute to the Canadian economy, and all Canadians, indirectly, are beneficiaries.[25]

After hearing from more than 100 witnesses, the Committee believes that the temporary foreign worker program has changed considerably from its roots as a focused program for rare instances of genuine labour market shortage. Instead, for many participants (employers and workers alike), the temporary foreign worker program has become the faster and preferred way to get immigrants to Canada to meet long-term labour shortages.

The expansion of the temporary foreign worker program represents a failure of the economic stream of immigration to bring in the type of workers needed and in a timely fashion. The Committee heard repeatedly that the “immigration system is broken” and that if it were amended, the demand for temporary workers would lessen. There was widespread agreement that permanent immigration was more desirable and better for nation building than using increasing numbers of temporary workers. The changes introduced in the Second Session of the Thirty-Ninth Parliament through Part 6 of Bill C-50, the Budget Implementation Act, 2008, attempt to address deficiencies in the economic immigration program. It is still too early to evaluate the impact those changes will have. Accordingly, the Committee believes that further study of, and changes to, the skilled immigration program may be required. In the meantime, it is clear that employers, communities and even sectors of the economy have come to rely on temporary foreign workers.

The Committee believes that temporary foreign workers represent only one solution to resolving labour shortages. Other measures must also be implemented, such as improving the economic integration of immigrants and others on the margins of economic participation; improving labour mobility; investment in training, apprenticeships, and retraining; and improving productivity. The recommendations included in this report reflect this multifaceted approach and what the Committee believes is the rightful place of the temporary foreign worker program. Hiring temporary foreign workers should complement, rather than replace, investments in the local labour market named above. Further, the cost to the employer of hiring a temporary foreign worker should reflect the true cost of ensuring a safe and healthy workplace where temporary foreign workers enjoy the same working conditions as Canadian workers.

Because employers rely on the temporary foreign worker program for the short-term and because it takes time to implement more sustainable solutions, the Committee proposes no change to the current temporary foreign worker programs in terms of scope or purpose. Instead, the bulk of our recommendations are intended to improve the current programs, strengthening protections for workers and facilitating requirements for employers. Our proposals fill in gaps that should not have been allowed to develop in the first place. However, the Committee wishes to underline that our goal is a functional immigration system with a much more limited scope for temporary foreign workers. Future temporary foreign worker programs should be focused and subject to sunset clauses precipitating regular reviews of labour market conditions.[26]

Recommendation 1

The Committee recommends that the Government of Canada maintain the current Temporary Foreign Worker program, possibly enhanced by the recommendations of this report, in order to fill labour needs that are of a temporary nature, such as labour needs that are seasonal or likely to be of a cyclical nature.

This report acknowledges that there are problems with Canada’s temporary foreign worker programs, some that have been known for some time, and some that have arisen along with the program’s rapid expansion. While we make recommendations to address many of these problems, the Committee believes that monitoring and evaluation is required on an on-going basis, allowing the programs to evolve and adjust to changing conditions. An independent body could consider additional concerns, monitor program or policy changes, and help with the eventual closure of most temporary foreign worker programs.

Recommendation 2

The Committee recommends that the Government of Canada create a temporary foreign worker advisory board comprised of various stakeholders to provide it with periodic feedback and recommendations. The advisory board should be given a broad mandate, including on-going monitoring, oversight, and review of the temporary foreign worker programs.