January 29, 2018 8:00 pm
Updated: January 29, 2018 8:48 pm

Temporary foreign workers staying longer regardless of unemployment levels

Does Canada want temporary workers to remain temporary? Current regulations aren't clear, experts say.

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Temporary foreign workers (TFWs) are more likely to remain in Canada than they were in the past, according to a report published by Statistics Canada on Monday. And whether or not they stay appears to have little to do with unemployment levels in the regions where they are living and working, the research suggests.

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The number of TFWs present in Canada has increased from 52,000 in 1996 to 310,000 in 2015, according to StatCan. And while the majority of TFWs leave within two years, “the tendency to stay longer has increased among more recent arrivals,” write Elena Prokopenko and Feng Hou of the Social Analysis and Modelling Division at StatCan.

Of the roughly 264,000 foreign workers admitted to Canada between 1995 and 1999, nearly 15 per cent, or just under 35,000, were still in the country after five years. Of the roughly 500,000 workers who came between 2005 and 2009, over 35 per cent, or around 186,000 remained for at least five years. The “overwhelming majority” of those who remained in Canada over the long term became permanent residents, reads the study, which analyzed arrivals between 1990 and 2009.

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The report also suggests a weak correlation between the presence and length of stay of temporary workers and unemployment levels in various parts of Canada.

“Some of these results are independent of regional unemployment levels,” said Parisa Mahboubi, who leads the research on human capital at the C.D. Howe Institute. That’s cause for concern since tapping into temporary foreign workers is meant as a “last resource” for employers who can’t find domestic workers to fill urgent, short-term job vacancies.

“This is something government needs to pay attention to,” she added.

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The share of temporary workers employed in regions with unemployment below six per cent did rise substantially in the late 2000s, as employers in Western Canada turned to foreign labour amid the oil boom. But the increase also reflects the mere fact that unemployment levels went down in several provinces during that period, as the economy improved, according to the study.

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Are temporary foreign workers a source of cheap labour?

The rules about wages for TFWs changed after a number of media reports in 2013 revealed instances where high-profile Canadian companies had turned to temporary work permits to replace Canadian workers with cheaper foreign labour. Back then, Canadian employers were allowed to pay TFWs up to 15 per cent less than the median wage for high-skilled jobs and up to five per cent less for low-skilled jobs, as long as that remained above the minimum wage.

READ MORE: RBC scrambles to explain hiring practices

The Harper government reacted to the public uproar by swiftly reinstating the rule that Canadian companies should offer temporary workers at least the median wage, along with a series of other, stricter regulations.

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Still, offering the median wage doesn’t entirely eliminate the temptation for domestic employers to use TFWs as lower-cost employees, said Dominique Gross, a professor at Simon Fraser University’s School of Public Policy. That’s because when companies are competing to attract Canadian workers, they normally have to offer more than the median wage, she said.

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Canada should decide what temporary foreign workers are for

Among low-skilled temporary foreign workers, those most likely to stay are the ones who come in through a work-permit program that offers a pathway to gain permanent residence. For example, among live-in caregivers, who can apply for permanent residency after a number of years, the share of TFWs who are still in Canada 10 years after arrival is over 85 per cent. Among seasonal agricultural workers, for whom there is no established path to residency, the share of those who stay long-term is close to zero.

That suggests that the system is working pretty much as the rules intended. The problem, however, is Canada’s current regulations on the foreign workers program are a mishmash of federal and provincial provisions with no clear, overarching goal, Gross said.

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For a number of TFW programs, it’s up to the provinces to decide whether or not to establish a path to permanent residency. This often results in temporary workers with the same kind of job being eligible to remain in Canada in certain regions but not others, Gross told Global News.

Canada needs to decide whether it really wants temporary foreign workers only to plug extreme, short-term labour shortages or wants them to eventually become permanent residents.

In the first case, the federal government should consider shortening the duration of all or most foreign worker permits to one year, said Gross. In the second scenario, it should establish paths to permanent residency for all temporary workers and include them in its yearly target for new permanent residents, she added.

The Trudeau government has set a goal of permanently admitting 340,000 new immigrants by 2020, but some of those immigrants might find themselves struggling to compete against temporary foreign workers who already have plenty of experience in the Canadian workplace, said Gross.

READ MORE: The case for taking ‘temporary’ out of ‘Temporary Foreign Worker’

If Canada decides to stick with its original idea of temporary workers as a short-term fix for labour shortages, it should also consider forcing domestic employers to train Canadian youth who aren’t going to university, as Germany does with its famous apprenticeship programs.

Otherwise, Gross said, temporary workers programs “can become a disincentive for employers to train locals.”

© 2018 Global News, a division of Corus Entertainment Inc.

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