Flawed foreign worker rule changes hurt western employers

CALGARY, AB March 9, 2015 – A revised policy that was meant to put Canadians first for jobs disproportionately affects western provinces with low unemployment, the ones that need foreign workers the most, according to a report from the Canada West Foundation.

The recent changes to the Temporary Foreign Worker Program (TFWP) have potential to harm western employers by restricting the supply of low-wage foreign workers in regions with tight labour markets, reveals the report, entitled Work interrupted: How federal foreign worker rule changes hurt the West. The revised policy has little impact, meanwhile, in regions with higher unemployment rates and more potential workers to fill spots vacated by foreign workers.

“Instead of helping Canadians who are looking for work, the rule changes create new hiring difficulties for employers in the West where unemployment rates are the lowest in the country,” says report author Farahnaz Bandali, Senior Policy Analyst for the Foundation’s Centre for Human Capital Policy.

The report examines the impact of the federal government’s June 2014 overhaul of the TFWP following public concerns that foreign workers were replacing Canadian workers. According to Bandali’s analysis, under the revised policy, close to 75 per cent of the reduction in low-wage TFW entries will take place in the four western provinces, compared to eight per cent in Ontario, where unemployment rates are much higher. Alberta will bear the brunt of the changes, with half of the country’s foreign worker reductions coming from that province alone. That’s six times as many low-wage TFWs as Ontario will need to give up, despite the fact that Ontario’s labour force is three times the size and the province has much higher unemployment than the West.

“It’s unclear how employers will be able to manage their need for hotel staff, food servers and other low-wage workers,” says Janet Lane, Director of the Foundation’s Centre for Human Capital Policy. “Some employers in the West may have to operate fewer hours, scale back expansion, or in the worst-case scenario, close their doors. Service may suffer.”

The report follows the December 2014 Shedding Light on the TFW program paper, which traces how the program has evolved since it was created in the early 1970s.