Author: Farahnaz Bandali
The 2014 changes to the Temporary Foreign Worker Program (TFWP) have created an unprecedented situation for western Canadian employers.
Canada’s immigration policies target high-skilled workers and Canadians often avoid work in low-wage jobs. With the redesigned foreign worker program that limits employers’ use of low-wage temporary foreign workers, it is unclear how employers will continue to fill these jobs and whether the consequences will ultimately be more or fewer jobs for Canadians.
The impact of the changes could be severe. Without enough workers, businesses could be forced to have shorter hours, service will suffer, workers will be stressed and businesses could shrink. Some may be forced out of business altogether.
Ironically, this policy change will hit the provinces with low unemployment hardest and will only slightly affect provinces with higher unemployment rates where there are more potential workers to fill jobs vacated by foreign workers.
This paper confirms that recent changes to the TFWP will hurt western Canadian employers in particular. Alberta will bear the brunt of the changes; that province will be allowed to bring in fewer temporary foreign workers by 2016 than anywhere else in the country. Alberta relies on temporary foreign workers more than any other province or territory and has had the second lowest unemployment rate. Although the recent drop in oil prices will ease the impact, it is too soon to say by how much. When oil prices rise again, this policy could also impair Alberta’s economic recovery.
Saskatchewan will also be hurt. It has the lowest unemployment rate in the country and relies on temporary foreign workers more than most provinces. There are also few options to find replacements for the temporary foreign workers they will not be able to hire, because the province is close to fully employing everyone who is willing to work.
British Columbia also relies heavily on temporary foreign workers, and is expected to have the second-highest reduction in low-wage TFW entrants by 2016. Unlike Alberta, however, it may be able to find other workers. There are more Canadians out of work there than in the other three western provinces, and the jobless ranks are expected to grow as British Columbians return home from Alberta during the downturn in oil prices.
Manitoba relies less on temporary foreign workers than most other regions of the country, with the exception of in a couple of sectors. Manitoba has focused on attracting permanent immigrants, and will lose the fewest low-wage temporary foreign worker entrants of the four western provinces. Other provinces can learn from Manitoba, which has a good system to manage the temporary foreign workers they employ.
Federal changes have made it more difficult, even in cases of genuine need, to access the TFWP. The impact of the changes should be reviewed to ensure that valid policy goals, such as enabling economic growth, can be met. In this case, a flawed but flexible program has been replaced by a flawed and inflexible program. This paper shows that one size does not fit all. In the short term, the loss of foreign workers will leave employers with limited options. Not all unemployed people are willing to take a job that does not interest them or that they are not good at. Over the medium to long term, employers may find ways to adapt by bringing underrepresented populations – such as Aboriginal or disabled people – into the workforce. Governments may need to offer training and support to make this happen.