Foreign workers now harder to hire

Employers facing increased costs, red tape and enforcement
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 07/14/2014

Major changes to Canada’s Temporary Foreign Worker Program (TFWP) are being received with mixed reviews but will definitely have an impact on those employers that make use of the government program.

The reforms are meant to ensure the TFWP is only used as intended — as a last and limited resort to fill acute labour shortages on a temporary basis when qualified Canadians are not available — according to the government. That means limiting access to the program, tightening the labour market assessment and implementing stronger enforcement with tougher penalties so businesses will have to make greater efforts to recruit and train Canadians for available jobs, including increasing wages.

It’s a monstrosity, according to Sergio Karas, principal and lawyer at Karas Immigration Law.

“There is absolutely no dispute by anyone that some elements of the program were being abused,” he said. “But that doesn’t mean that you can use a sledgehammer in order to deal with problems that require a scalpel.”

The changes will undermine Canadian companies’ competitiveness because employers are going to quit using the program altogether and look for other ways to bring in workers, such as international treaties, said Toronto-based Karas, adding the government is being disingenuous in not mentioning the impact of other programs such as open work permits.

“Instead of having a comprehensive approach that makes sense, what (governments) do is they devise these ad hoc measures that respond to political pressures.”

The reforms are not a move in the right direction, according to Richard Truscott, director of provincial affairs in Alberta at the Canadian Federation of Independent Business (CFIB).

“Had these changes taken place in the context of broader reforms to our immigration system, to make sure that it aligns more closely with the needs of employers, then it might be a different story. But since they’ve shut off access to temporary foreign workers for employers, especially in places like Alberta, it’s going to do serious damage to our economy.”

It seems like there is a real bias in that we only want engineers and scientists and highly skilled tradespeople to come to the country on a permanent basis, he said.

“(The CFIB wants) to see things like more pathways to permanent residency for temporary foreign workers at all skill levels.”

The TFWP has been a critical lifeline for a lot of businesses, said Truscott.

“Now that they’ve shut that off, it’s certainly going to cause major disruption within the economy and prevent employers from having access to people that they have a verified need for. So it’s pretty much bad news all around, certainly for smaller firms.”

But the changes, on the whole, are not that bad, according to Howard Greenberg, partner at KPMG Law in Toronto.

“The ministers of employment and skills development and citizenship and immigration could have imposed draconian measures to limit or suspend the Temporary Foreign Worker Program. Given the possibility, the measures taken were, for the most part, balanced and reasonable in the circumstances,” he said.

“Employers must take a balanced view of a program which has been under high scrutiny and which requires additional controls in order to gain the confidence of Canadians.”

New programs created

As part of the overhaul, the TFWP is being reorganized and new International Mobility Programs (IMPs) are being created. The TFWP will now refer to those streams under which foreign workers enter Canada at the request of employers following approval through a new Labour Market Impact Assessment (LMIA). The IMPs will incorporate those streams in which foreign nationals are not subject to an LMIA, and whose primary objective is to advance Canada’s broad economic and cultural national interest, rather than filling particular jobs, said the government.

Under an LMIA, employers must provide information on the number of Canadians applicants, interviews and rejections. The LMIA fee is also increasing from $275 to $1,000 for every temporary foreign worker position requested by an employer.

The fees appear to be going up sevenfold, said Truscott, as applications have to be made more often because timeframes are shortened. So the costs are going to be a lot higher and require a large volume of additional paperwork.

“They’ve taken a bad program that was costly and bureaucratic and slow and made it even worse,” he said. “The program has been tightened considerably, it’s been made much more expensive and more difficult to use.”

The good news is the high-end foreign labour force is going to enjoy 10-day processing, said Greenberg.

“It’s not the old ALMO (Accelerated Labour Market Opinion) but it certainly is business-friendly,” he said. “The bad news is that there has been a substantial increase in fees. However, in the context of other countries, it is a fraction of what is charged by government agencies.”

However, offside employers could face administrative fines of up to $100,000, said Greenberg.

Caps, shorter stays

Employers with 10 or more employees applying for an LMIA will be subject to a cap of 10 per cent on the proportion of the workforce that can consist of low-wage temporary foreign workers. Those rules will be transitioned in for employers already over the cap, said the government.

LMIAs for low-wage temporary foreign workers will be reduced from a two-year standard duration to one year. And applications for the lowest-wage, lowest-skill, entry-level occupations in the food services, accommodation and retail trade sectors will be barred from the TFWP in areas of high unemployment (six per cent or higher).

Employers seeking to hire high-wage temporary foreign workers (with limited exceptions) must submit transition plans to demonstrate how they will increase efforts to hire Canadians.

The government will also publicly post data on the number of approved positions for temporary foreign workers on a quarterly basis, and post the names of corporations that receive permission to hire these workers through LMIAs.

Employers are going to have to make their case in the arena of public opinion, said Greenberg.

“The scrutiny will not be merely a matter of compliance. That said, there are many projects undertaken by foreign workers that would have the confidence and approval of Canadians if appropriately explained by Canadian employers — the challenge is going to be one of communication,” he said.

“Employers should not be concerned about compliance if they put the appropriate checks and balances in place, innovate their processing procedures and create specific paths of accountability within their businesses.”

Improved enforcement, data

In addition, the number and scope of inspections will increase so one in four businesses employing temporary foreign workers are inspected each year.

“That’s something our members believe is a good step because a few bad apples are certainly causing major problems for a long list of employers who have a verified needs and are following all the rules,” said Truscott.

The ability to publicly blacklist employers that have been suspended and are under investigation will be expanded, as well as those that have had an LMIA revoked and are banned from using the program.

That’s a bit of a double-edged sword, said Truscott.

“Transparency is typically a good thing but we also don’t want a big target on the backs of employers who are using the program so that unions can organize boycotts and protests — we’ve seen some of that in the last couple of months, so that certainly worries us.”

The government also announced funding for two new surveys by Statistics Canada. A quarterly job vacancy survey will be based on a sample of 100,000 employers, not the current 15,000, and provide data by local areas, occupations and skill levels. A national wage survey will also double the sample size from 56,000 households to 100,000 employers, and data will be available by region instead of only at the provincial level.

“Everybody, without exception, has been skeptical of the use of the surveys — they are too blunt and out of date. If the program is about filling labour market shortages as a last resort, then clearly data is the key,” said Greenberg.

Better data is appreciated, according to Truscott.

“It’s always good news to hear governments are looking for better information with which to make public policy, and perhaps that’s one critique here — they’re making these decisions in the absence of good information.”

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