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Ban on temporary workers will likely spur local employment
Editorial by Christian Saint Cyr
National Director / Canadian Job Development Network
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In recent year's, Canadian employers have become increasingly reliant on temporary foreign workers, bringing in nearly a quarter of a million (239,646) TFWs in 2023. This compares with just 130,680 in 2018.
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From a labour market perspective, I've never been a big fan of hiring temporary foreign workers. An inability to find workers forces employers to raise wages, innovate and bring in new technologies, which increases the skill-level of jobs, resulting in better wages and greater job security. Relying on temporary foreign workers suppresses wages and innovation, leaving employers less competitive internationally and domestically. Our reliance on TFWs is straining our economy and the federal government has stepped in to institute changes.
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To address impacts on housing and other social supports, on August 26th, Employment and Social Development Canada (ESDC) announced that they would temporarily suspend the processing of Labour Market Impact Assessments (LMIAs) under the Low-Wage stream of the Temporary Foreign Worker Program (TFWP)—for employers that are located in Census Metropolitan Areas (CMAs) with an unemployment rate equal to, or higher than 6%.
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While housing is an important consideration, this change in rule is just as much a recognition that employers continue to use the TFWP while the unemployment rate is rapidly rising in their own community.
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To qualify as a CMA, an area must have a total population of at least 100,000, with at least 50,000 residing in the centre (known as the core).
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While the news announcement from ESDC detailed the steps the department would be taking to curb misuse of the program, the announcement did not confirm which CMAs would be impacted by name.
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This said, according to Statistics Canada, the following is a list of CMAs with an unemployment rate equal to, or higher than 6%:
- Abbotsford-Mission, British Columbia 6.7
- Barrie, Ontario 6.2
- Brantford, Ontario 6.3
- Calgary, Alberta 7.6
- Edmonton, Alberta 8.5
- Greater Sudbury, Ontario 6.2
- Halifax, Nova Scotia 6.1
- Hamilton, Ontario 7.4
- Kingston, Ontario 6.6
- Kitchener-Cambridge-Waterloo, Ontario 7.6
- London, Ontario 7.5
- Montréal, Quebec 7.3
- Oshawa, Ontario 8.5
- Ottawa-Gatineau, Ontario 7.1
- Ottawa-Gatineau, Quebec 6.9
- Regina, Saskatchewan 6.8
- Saint John, New Brunswick 6.8
- St. Catharines-Niagara, Ontario 7.5
- St. John's, Newfoundland and Labrador 7.2
- Toronto, Ontario 8.6
- Trois-Rivières, Quebec 6.5
- Vancouver, British Columbia 6.2
- Windsor, Ontario 9.8
- Winnipeg, Manitoba 6.3
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Essentially, 24 of Canada's 42 CMAs now post an unemployment rate of more than six per cent, but the list excludes some important centres such as Victoria, Kelowna, Saskatoon, Peterborough, Guelph, Quebec City and Sherbrooke, Quebec.
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So, what are the important considerations for career professionals. Probably the most important consideration is this only applies to employers hiring inside a Census Metropolitan Area, which are typically the largest concentration areas in the province. And while Ontario has 16 CMAs, BC and Alberta only have four each, New Brunswick has just two and Manitoba only one. For example, this means the ban on TFWs will apply in Winnipeg but no where else in Manitoba.
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This said, since Canada's three largest cities are represented (Toronto, Montreal and Vancouver) as well as other major cities such as Calgary, Edmonton, Regina, Winnipeg, Ottawa and Halifax, the rule is still likely to impact the largest portion of Canadian employers. This will be of little assistance to job seekers in small- to medium-sized communities such as Prince George, Medicine Hat, Prince Albert, Brandon, North Bay and Charlottetown where they have unemployment rates exceeding 6% but aren't a CMA.
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Other changes taking effect restrict employers to hire no more than 10% of their total workforce through the TFW Program across the country. Also, the maximum duration of employment for workers hired through the Low-Wage stream will be reduced to one year down from two years.
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Looking at the coverage of this announcement, much of the attention has focused on the employers' desire to pay low wages, but since the employer must match local wages, hiring through the TFWP costs quite a bit more than hiring someone locally. The employer must pay for the round-trip transportation of the workers as well as a $1,000 fee for the LMIA for each position. Employers will also often pay recruiters to help source the international workers.
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We need to recognize that employers often pursue temporary foreign workers not because there it's less expensive or because local staff isn't available, but because they prefer TFWs. International workers are perceived to be harder working, more loyal, better at taking direction and more reliable.
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To be fair, I'm not excusing employer behaviour. Immigrants and youth have experienced the fastest and largest increases in unemployment in the past six months. Employers are abrogating their responsibility to mentor both youth and in helping acclimate newcomers to the Canadian workplace. This is an investment employers have historically made that has not only benefited the workers but also all of the other employers these workers continue to be employed with in the future.
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Without these initial first jobs, one report said this results in "long-term career scarring for youth."
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Are temporary foreign workers more loyal, reliable and harder working? Yes! They are these things because for many of them, they hope to apply for permanent residency at the conclusion of their employment and don't want to run afoul of their employer.
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Now, for many employers who've hired nothing other than temporary foreign workers for years, this will no longer be an option as of September 26th, for the foreseeable future.
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As this major change occurs, how does this impact the work of job development? If loyalty, hard-work, reliability and taking direction are important considerations for employers, I believe we need to ensure clients are communicating this in their resumes, how they complete job applications, in their elevator pitch and in all of their communication with employers.
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I believe these terms should also be important talking points in our communication with employers. When marketing clients and students we need to under-score our candidates' value and demonstrate these qualities as well.
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And while the communication piece is important, it should also be noted that once hired our clients understand they must demonstrate these qualities to be successful in their work. This means not being late for the first day of work, not texting on the job and seeking opportunities to demonstrate more commitment whenever possible. Certainly, clients are not going to be on top of these things all the time but now that employers are forced to hire locally or go out of business, once again employers can take on the mentorship and staff development role they've historically occupied.
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We’ll be discussing these changes to the TFWP at our #MotivatingMondays meeting of the Canadian Job Development Network, Monday Sep. 16th at 8:30am Pacific; 9:30am Mountain; 10:30am Central; 11:30am Eastern; 12:30pm Atlantic and at 1pm in Newfoundland.
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On the morning of Monday September 16th, 'Click this Link' to join the session LIVE.
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