Is Canada becoming dependent on temporary foreign workers?

Dave Kaiser owns and operates McDonald's restaurants in Cranbrook, B.C., and Fernie, near the Alberta border — two towns less than an hour's drive from each other, but with workforce challenges that stand a world apart.

In Cranbrook, Kaiser has no trouble finding local staff. But in Fernie, home to about 5,000 people and five coal mines, Kaiser said he's so desperate for workers he would "hire virtually anybody who comes in my door, if they've got a pulse."

"Here we have a ski resort town that sits next to an enormous employer that has a coal mine," Kaiser said. "There are a lot of restaurants … and there are a lot of hotels, and we're all looking for the same people. There's just not enough people to do those jobs."

It's a surprising dilemma for a country that has 1.4 million jobless people out of a total eligible workforce of 18 million, according to figures released Wednesday by Statistics Canada as part of the latest release of data from the National Household Survey, formerly the long-form census.

The permanent solution? Temporary foreign workers.

Currently, more than 330,000 workers live and work in Canada as part of the federal temporary foreign worker program — a number that has nearly tripled over the last 10 years, with the bulk of those job-seekers going west in search of work.

But B.C. has struggled to keep pace with Alberta, Saskatchewan and the territories when it comes to attracting would-be employees. Fewer than five per cent of those working in B.C. moved there in the last five years, compared with 7.6 per cent in Alberta and double-digit percentages in Yukon, N.W.T. and Nunavut, the Statcan survey shows.

Shift to low-skilled workers

The program was originally designed to attract skilled employees, agricultural workers and live-in caregivers in order to address temporary labour shortages. The emphasis shifted in 2002 to low-skilled workers, such as those in the food and beverage industry, construction and retail.

'The way the rules work, you're supposed to only have temporary foreign workers if you cannot find Canadians to fill the position.'—Jason Foster, Athabasca University

The federal government's decision to open the program to lower-skill occupations came in response to pressure from employers, said Jason Foster, an Athabasca University academic co-ordinator who has researched the program's transformation.

"There was no evidence of any particular labour shortage in those occupations at the time," Foster said. "It was simply a matter of trying to provide these employers with other labour supply options in terms of how to address their labour concerns."

Foster said Western Canada's economic boom during the early 2000s did result in labour shortages in certain industries, such as construction, but the trend was not universal. When the global recession hit in 2008, the expected drop-off in temporary foreign workers never happened.

"The way the rules work, you're supposed to only have temporary foreign workers if you cannot find Canadians to fill the position," said Foster.

"However, we now know that that didn't happen. The numbers levelled off for a year or two, and continued to rise."

That suggests employers have become addicted to the program, said labour economist Erin Weir.

"Temporary foreign workers are tied to the specific job and the specific employer," he said. "It's often very convenient for employers to have people who they know aren't going to be able to take other jobs, and have little ability to push for better wages."

Manipulating Canada's economy

Critics of the program say it undermines the natural economic forces in Canada's job market by artificially filling low-paid, low-skill positions and removing the impetus for higher wage demands.

"In some areas of the country, the need is dire for workers, they have serious trouble attracting people, and it is urgent to find people immediately," said Catherine Connelly, an associate professor at the DeGroote School of Business at McMaster University. "That's mostly in Alberta."

The opposite problem exists in hard-hit Ontario cities like Windsor and St. Catharines, to say nothing of Newfoundland and Labrador, which ranked dead last among all the provinces and territories in the 2011 survey with an employment rate that barely cleared 50 per cent.

"If you look at St. Catharines, there are a hundred applicants for each job," Connelly said. "They should be recruiting people from St. Catharines. Instead, they're recruiting overseas."

'If you look at St. Catharines, there are a hundred applicants for each job.'—Catherine Connelly, McMaster University

Rod Goy, dean of the British Columbia Institute of Technology's School of Construction and the Environment, said in areas such as the Alberta oilsands, employers can suddenly find themselves in urgent need of hundreds of tradespeople for short-term work.

"In construction, although it's becoming more and more of a science, we can't always tell when those critical moments will occur," Goy said.

Goy said he'd rather see employers take on local apprentices instead of hiring overseas, but only about 17 per cent of Canada's employers are currently willing to train them.

"We haven't been able to break through that number," he said. "For some reason, there are systems in place that create some kind of barrier. Either that, or there's a whole lot of perception going on that apprenticeships are costly when in fact they're not."

Wednesday's survey data also showed that trades certificate programs are struggling to attract young applicants.

There were just 67,680 adults aged 25 to 34 with a certificate in mechanic and repair technology in 2011, compared with 104,200 workers aged 55 to 64 and on the cusp of retirement — a difference of 35 per cent. The difference was 21.7 per cent for certificates in "precision production," a trade that produces machinists and welders; for the construction trades, the deficit was 6.3 per cent.

Matter of demographics

Dan Kelly, president of the Canadian Federation of Independent Business, defended the program's 2002 expansion as a matter of demographics: there simply are fewer young people in the country available to fill menial, entry-level jobs.

"We have one of the highest post-secondary education attainment levels in the industrialized world," Kelly said.

"As a result of that, we have a large number of Canadian young people who don't want to go to work in retail, or hospitality or in the service sector. They feel that somehow, that's beneath them."

Kaiser said he would rather hire Canadians than temporary foreign workers because the paperwork is simpler, but a lot depends on where the jobs are located. He couldn't get a single Canadian applicant for his Fernie restaurant, he said.

'We have a large number of Canadian young people who don't want to go to work in retail, or hospitality or in the service sector. They feel that somehow, that's beneath them.'—Dan Kelly, Canadian Federation of Independent Business

"People will move across the country for a $30-an-hour job, but they will not move across the country for a $13-, $14-, $15-an-hour job — at least that seems to be the trend," he said.

"In fact, people won't move from Cranbrook to Fernie to work in the hospitality industry, and that's only 100 kilometres."

The program came under fire earlier this year when the Royal Bank was criticized for outsourcing jobs to workers in India instead of employing Canadians.

In B.C., the public lashed out against the provincial government's support for Chinese-owned HD Mining's plan to use temporary foreign workers at its proposed Murray River coal mine in Tumbler Ridge. The company argued that temporary Chinese workers were necessary because of a lack of Canadian training in their specific work.

Ottawa responded by doing away with a rule that allowed employers to pay foreign workers up to 15 per cent less than the median wage. It also made it harder to bring in workers from outside Canada, and introduced stricter rules for applications, new fees for employers and a promise of stricter enforcement.

Foster said he's not convinced that certain industries, such as those in food services, will scale back on their dependence on temporary foreign workers.

"The program has basically given those employers a bit of a free pass," he said. "So instead of having to figure out how they can attract workers to go to their jobs instead of an oil field servicing job, or shipbuilding … they just go and get some temporary foreign workers."