Skills mismatch or ‘labour market failure’? Canada’s newcomer conundrum

In the past seven years, the number of people brought to Canada to do a job and then leave has eclipsed the number of people moving here annually planning to stay.

Canada’s Temporary Foreign Worker program came under scrutiny this week amid claims Royal Bank of Canada was replacing Canadian workers with cheaper, contracted workers brought from overseas. Human Resources and Skills Development Canada approved the Labour Market Opinions outsourcing company iGate needed for permission to bring in temporary foreign workers, but says it’s reviewing that approval, citing “discrepancies between RBC’s public statement and information which has previously been provided to the government.”

The program, designed for employers to bring in people for a specific job they can’t find Canadians to do, has more than doubled since 2006. This past December there were 388,189 temporary foreign workers across Canada.

At the same time, it’s become harder for immigrants to find work – and especially tough for any skilled immigrant, as most of Canada’s are, to do the work he or she was trained to do.

If you’re a university graduate and you’ve come to Canada in the past five years, you’re 50 per cent more likely to be out of work than a Canadian-born worker with a high-school diploma.

And – you are more than four times as likely to be jobless than a Canadian with equivalent credentials.

Amid a stalling recovery, numbers from Statistics Canada’s Labour Force Survey indicate new Canadians are still among those hit hardest by unemployment. They’re still more likely to be out of work than they were five years ago.

“It’s not necessarily a ‘skills mismatch,’” says Joan Atlin, director of programs at the Toronto Region Immigrant Employment Council.

“We talk about it as being a labour market failure – a failure to make the right connections.”

Last month’s federal budget promised as-yet-unspecified changes to the Temporary Foreign Workers program. On some people’s wish list is simply better enforcement of the rules that are already in place, and making sure employers really check for workers here – “”not just by posting a job but reaching into those programs and services where there are candidates … before they look abroad,” Atlin said.

“Just putting a job up on Monster doesn’t make the connection.”

In some cases, the gap between immigrants and Canadian-born workers is shrinking: People who came to Canada more than a decade ago and have at least some post-secondary experience have slightly better job prospects than their non-immigrant counterparts.

But the gap gets bigger the more schooling you have. Canada’s highest-achieving newcomers are still those most likely to be unemployed or underemployed – unexploited skills that have been estimated to cost the country billions annually.

These unemployment figures also starkly illustrate the ironies of Canada’s credentials trap: Recent immigrants have a way better chance at finding work with a high-school diploma than some post-secondary experience. And university grads who’ve been here for several years are more likely to be unemployed than people with partial post-secondary experience.

At the same time, employers are bringing hundreds of thousands of people to Canada for short periods of time to fill critical labour shortages, doing jobs they say no one here has the skills to do.

In some ways, argues Armine Yalnizyan, economist at the Canadian Centre for Policy Alternatives, the Temporary Foreign Workers program acts as a disincentive for employers to take a risk and hire an immigrant who’s here for good, has unfamiliar credentials and fewer local connections to vouch for them.

“You’ve got this public policy architecture that tells you, ‘Why hire an immigrant when you can hire a disposal newcomer?’

“You’ve introduced this toxic element into the mix,” she argues: The influx of short-term labour adds a sense of precarity to an already uncertain workforce.

Some labour organizers say temporary workers create a reluctance for anyone to agitate for better working conditions. “It’s got this spillover effect,” Yalnizyan said. “What you can ask for? Can you ask for a raise? Can you ask for better working conditions? Oh, look at what happened to that guy.”

Use the arrows at the bottom right to compare unemployment rates between years:

Use the boxes at the bottom left to compare unemployment trends for different groups since 2006:

Compare Canada’s influx in temporary foreign workers with new immigrants annually: