Foreign worker scandal serves up controversy

Government crackdown on McDonald’s franchises puts TFWP back under microscope
By Liz Bernier
|Canadian HR Reporter|Last Updated: 05/06/2014

A recent government crackdown is sparking renewed controversy around temporary foreign workers.

Three Victoria, B.C., McDonald’s restaurants, owned by a single franchisee, are facing government investigation for alleged misuse of the Temporary Foreign Worker Program (TFWP). The franchisee was added to a federal blacklist in early April.

“Within 24 hours of becoming aware of these allegations, inspectors from my department did an on-site inspection at the location in Victoria and I suspended all labour market opinions and work permits in process for this franchise pending the outcome of the investigation,” Jason Kenney, federal minister of employment and social development, said in a statement.

“Any employer found to have broken the rules will face serious consequences. Our message to employers is clear and unequivocal — Canadians must always be first in line for available jobs.”

Two other franchises — one in Parksville, B.C., and one in Lethbridge, Alta. — are also facing investigations after being brought to the ministry’s attention later in the month.

McDonald’s immediately distanced itself from the franchises and launched its own investigations.

‘Canadians first’

The scandal, which comes just one year after RBC faced a similar controversy around the TFWP, sees questions arising again about hiring temporary foreign workers for low-skill jobs that many Canadian workers could qualify for.

“There’s no doubt that we don’t condone any abuse of the program,” said Mark von Schellwitz, Vancouver-based vice-president for Western Canada at Restaurants Canada.

“We support any sort of new penalties for those who abuse the program, with the proviso that there is an appeals process involved as well.”

In the restaurant and food service industry, it’s critically important that organizations follow the rules so the TFWP remains available to those employers that really do need it, he said.

“There’s a lot of misconceptions, I think, out there about how somehow hiring temporary foreign workers or immigrants is a preferred option. We want to hire Canadians first. It’s our most cost-effective option and, by and large, we’ve been very successful,” said von Schellwitz.

“It should be kept in mind that of the 1.1 million people that we employ, less than two per cent are actually temporary foreign workers — and they’re usually focused in a few regions of the country where unemployment rates are very low.”

Unfortunately, employers that abuse the program are seriously undermining those organizations that do follow the rules.

The McDonald’s case is far from an isolated incident, according to Jim Sinclair, Vancouver-based president of the B.C. Federation of Labour, which has threatened to organize a boycott of the restaurant chain.

“This example has been repeated over and over again and under the program, once you bring temporary foreign workers in, they have to have 40 hours a week,” he said.

“So when they’re laying people off or cutting back hours, they cut back Canadian residents, because under the program they can’t cut back the temporary foreign workers… it’s just one more fundamental flaw in the program.”

Regional, demographic differences

Despite any flaws or abuses, the TFWP can be invaluable for employers in certain regions with very low unemployment rates, according to Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB) in Toronto.

“We have to recognize that while the unemployment rate in Canada is higher than the percentage of positions that are sitting vacant, it doesn’t much matter if you’re in a region of the country or a sector of the economy where there are skills or labour shortages,” he said.

“So, at the macro level, some of the economists who are saying that there are no skills or labour shortages are correct but, at the micro level, that doesn’t really give you much sympathy if you’re in Estevan, Sask., looking for somebody to work at a quick-service restaurant and can find nobody.”

In many communities — particularly in resource-heavy provinces — some employers really are encountering a shortage of workers for low-skilled, entry-level positions, he said.

“With respect to sectoral labour shortages, we have to admit in Canada that there are jobs that Canadians are not terribly excited to do. And this is one of the things that we dance around, and it’s politically incorrect to talk about. But I can understand why somebody who is $40,000 or $50,000 in debt after going through a liberal arts university program — I can understand why they’re not terribly excited to go and work at a quick-service restaurant.”

It used to be that the only labour market opinions you’d see were for seasonal agricultural workers or very high-skilled workers, said Alex Stojicevic, managing partner at Maynard Kischer Stojicevic in Vancouver.

“Nowadays, there’s been a huge expansion of the program — largely because of factors that have nothing to do with government policy particularly but ones that government policy is trying to grapple with, like development in Northern Alberta and the tar sands and various projects like this, as well as to some extent a declining Canadian birth rate,” he said.

“The problem with the great expansion of such a program is that there are abuses. With more and more of these workers here, there are more and more issues.”

What needs to change?

Stepped-up enforcement efforts may not be enough to make the TFWP work as well as it could, said von Schellwitz.

“We would love to see an accelerated labour market opinion process again that’s regional in nature,” he said, adding that this would target only those regions with low unemployment that really need the program.

Employers are also concerned about the elimination of the so-called “15 per cent discount,” which allowed smaller firms — which often couldn’t pay the industry average wage — access to the program, said Kelly.

Rules around high- and low-skilled workers could also be amended and clarified, said Stojicevic.

“(We need) much clearer sets of rules in terms of advertising for higher skills and much more rigorous ones for lower skills. We have under-used or under-developed sectors in our labour pool — First Nations People, seniors, et cetera… there has to be some mechanism where employers have to go and train those people first or really show that they’ve spent some money trying to recruit before can we take them at their word at these lower skills levels,” he said.

“In these higher-skill areas, I think you can take the employer at their word that they’re struggling to find an engineer with a particular skill set, and there’s less opportunity for exploitation when the base salary is $50,000 a year or $70,000 a year or $80,000 a year. But when you’re bringing in workers for $12 an hour, or $11, and you’re saying you can’t find Canadians to do that? Well, go train some.”

But no matter your opinion on what changes must be made, the crux of the controversy is that the program isn’t working as intended, said Sinclair.

“This program was never designed or meant to be used to bring in tens of thousands of people to work in low-skilled jobs when we have high unemployment rates.”

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