The Temporary Foreign Worker program (TFWP) has recently become a hot-button issue as stories of employers abusing the system roll in. The government is scrambling to identify reforms that will satisfy both employers and the broader public. Offering more prospective foreign workers citizenship is the ultimate solution.
Opponents of the TFWP argue it takes jobs away from Canadians and drives down wages. Proponents argue that not enough Canadians are willing to work certain jobs or relocate to certain communities, particularly resource boomtowns in Alberta and Saskatchewan.
Both sides have valid claims. Some industries have indeed become overly dependent on the program and as a result, have abused it to the point where it is negatively affecting domestic wages. The C.D. Howe Institute recently released a report that found the program negatively affects both domestic wages and employment levels.
But the fact that Canadians aren’t moving in sufficient numbers from high unemployment regions to communities with labour shortages suggests that there is a legitimate need for foreign workers – especially in industries such as mining, where there is a nation-wide long term shortage of qualified workers.
Foreign labour can be a compliment, rather than a substitute to domestic labour if there are jobs that residents cannot or will not do. By taking jobs Canadians aren’t filling, they allow Canadians to perform jobs dependent on those vacancies being filled. For instance, a hotel manager wouldn’t have a job without maids and workers in Fort McMurray need restaurant workers since they cannot do their jobs without sustenance.
The State of Georgia found this out the hard way. In 2011, the state introduced measures to scare off undocumented workers. This succeeded in chasing off many undocumented workers as well as legal immigrants who simply began to feel unwelcome in America. Farmers could not find enough domestic labourers to replace Mexican workers even at $15-$20 per hour. One survey suggested that farmers were short 11,000 workers during the 2011 harvest. Crop revenue lost was estimated at $140 million, and the state lost an estimated $390 million in economic activity. The State of Alabama passed similar measures the same year with similar results. Fortunately the Supreme Court overturned some key elements, leading some migrant workers to return.
Some Canadian provinces and industries have the same need for foreign workers, and so it’s crucial that the appropriate program is in place to meet these needs. The TFWP may be the right model in some instances, but permanent immigration is generally preferable.
While a new regulatory structure for the program seems necessary given the recent controversies, it may also make sense to scale back the program. It is, after all, only a temporary fix to the problem of labour shortages in Canada. What we really need is more foreign workers to become citizens.
The Canadian government is catching onto this notion. It recently announced that, starting in 2015, a new “Express Entry” program will be launched with the goal of identifying labour demands that can’t be satisfied domestically and matching them with qualified foreign workers. The intention is for these workers to permanently reside in Canada. Expanding this program while contracting the TFWP makes sense.
Some argue that low skilled immigrants can put a strain on public finances since they require healthcare, education, and other social services that other Canadians receive while paying less in taxes. But where real labour shortages exist, the only options are providing less services, automating them, or paying foreign workers. If the first isn’t desirable and the second isn’t feasible, the third is the only option. It may be expensive in some cases, but we need to ensure that jobs go filled without displacing Canadians.
Having over 300,000 temporary workers with no bargaining power shifts costs from the public treasury to working class Canadians. Making most of them permanent would allow them to move from firm to firm, boosting their potential earnings and allowing them to walk away from potentially abusive situations. That would mitigate the competition between foreign workers and Canadians.
Lastly, making more temporary workers citizens will help with our long-term demographic imbalance. Canada is on pace to have two workers per retiree by 2056 compared to roughly five to one in 2006. That will erode Canada’s tax base, putting an enormous burden on young workers to finance our unfunded healthcare system, among other things. Adding more taxpayers will help.
Immigration shortages in Alberta and Saskatchewan may require temporary workers in some cases. But in most cases permanent immigration is a better approach.