Changes to TFW program could affect local businesses

June 30, 2014 7:55 am
Julia Dima

Changes announced to the Temporary Foreign Worker (TFW) program on June 20 may have detrimental effects for businesses in Southeast Saskatchewan, business leaders say.

The changes come after controversy surrounding the program arose following two cases of program misuse at British Columbia McDonald’s restaurants and a restaurant in Weyburn. Initially, the federal government responded to these abuses by placing a moratorium on access to the program for the restaurant industry, where the program is heavily utilized.

The announced changes lifted the moratorium, but introduced new legislation that will introduce strict limitations to the program.

The first change is that there will be a cap on the number of temporary foreign workers a business can employ. No more than 30 per cent of employees can be temporary foreign workers, and by 2016, that number will drop to 10 per cent. Businesses with fewer than 10 employees will not have to comply with this cap.

The program will now only be available in areas where the unemployment rate is less than six per cent. As well, the cost of applying to hire a temporary foreign worker is increasing from $275 to $1,000. A new application method called a Labour Market Impact Assessment will replace the Labour Market Opinion, and be more thorough to ensure employers can prove that they were unable to hire a Canadian. There will also be more audits conducted to prevent program abuses.

Additionally, wage standards will now be based on provincial wages and not the national occupation code for specific occupations. Wages above the provincial median are considered high wage, and any below are low wage. The amount of time a temporary foreign worker can work in Canada is also being reduced from four cumulative years to two.

The Saskatchewan business community believes the changes are a disappointment.

“We think this is exceptionally poor public policy,” says Steve McLellan, CEO of Saskatchewan Chamber of Commerce. “It is based on anecdotal evidence because the labour market information is not complete in this area . . . We believe it will result in a reduction of service from a variety of companies—restaurants might look at reducing hours, businesses will not be able to offer services—it’s that dramatic of an impact on the province of Saskatchewan. We think the federal government has moved in a direction that is completely irresponsible for the continued prosperity and growth of Saskatchewan businesses, and the health and prosperity of the temporary foreign workers even.”

McLellan says the largest problem with the program is that it still fails to address Saskatchewan’s unique situation.

“The cap isn’t reasonable. It does not recognize the different dynamics in the country, and even the different dynamics within the province,” McLellan says.

“I understand that the government needed to put some parameters on it, but one of the premises we’ve tried to advocate right from day one is that every region in the country has specific needs, and creating a one-size-fits-all program does not work,” McClellan says. “Saskatchewan has unique needs, let’s design a program that addresses that. With many of our Saskatchewan businesses, to be only at 10 per cent would mean reduced service. When we have workers that want to come here, businesses that want to hire them, customers who want the products of the company, why would we stifle that economic growth?”

The Canadian Federation of Independent Businesses believes that these changes will indeed stifle business growth.

“Labour shortages are our number one issue in Saskatchewan, and this is going to make it harder for business owners to grow and expand, because what our research shows is that 50 per cent of small businesses are already turning down business opportunities because they can’t find workers,” says Marilyn Braun-Pollon, VP of Prairie and Agri-business for CFIB. “We are finding that a majority of our partners can’t fill jobs—we have over 13,000 jobs that have remained unfilled for over four months, so when you are a business owner in the service sector and you cannot find a Canadian to do the job, now you may not be allowed to use the program.”

Braun-Pollon says CFIB has proposed changes to the federal government that they believe would improve the program for businesses, as well as for workers.

“Some recommendations we made would be a pathway to permanent residency for all temporary foreign workers, a temporary foreign worker bill of rights to protect them from abuse, stricter enforcement, an accredited employer stream—so those who have complied with the rules for a long time should be able to access the program more easily than first-time users. As well, looking at reforming permanent immigration system to allow access to employers in lower skilled categories. There’s no pathway to permanent residency to low-skilled temporary foreign workers . . . So we propose a system that ensures all temporary workers including those in entry level jobs have a pathway to become permanent residents.”

Souris-Moose Mountain MP Ed Komarnicki says he is not happy with all the changes—particularly the tightening of the percentage cap over three years—but says it was this formula, or no program at all.

“Businesses will have to adapt and find other ways of meeting their needs, so it will have an impact for sure to some extent. But the alternative of no program at all would have been much worse—I know the opposition parties would have closed it down not only with respect to the service industry, but across the board,” Komarnicki says. “Personally, I would have preferred to see the 30 per cent cap held throughout, as I think most businesses could adapt and live with that.”

Komarnicki says that as the program begins to affect the riding, problems with it can be addressed.

“I think that Minister Kenney is open to hearing from employers about how we can better meet their needs, and I think that as MPs from Western Canada, Saskatchewan, in particular, we need to keep advocating, and seeing, after we’ve seen how this program works, if there is anything we can do to make it better.”

McLellan says that it is clear already that this change will stifle business growth.

“It may mean businesses may have the money to open, the market is there, they have the right building, but not the staff. That will slam the door on that investment, there will be businesses that simply won’t open because of this.”

Dan Davidson, owner of Red Barn and Subway in Moosomin says that the changes may have changed his mind about opening a third Subway.

“Let’s say I open one, and it’s further south where there is 2 per cent unemployment. What happens when I open that door, and I’ve advertised everywhere, and I have one full time person interested, and I have four part time, and I need 10? What would I do, because at that point, I’d be forced to open, and I know that the labour market process to bring over foreign workers is ten months away from helping me. I will wish that I never opened it, so I am not going to open it. With the uncertainties, you just won’t grow with it. I wouldn’t have opened the Langenburg Subway if I knew that the government didn’t support me. If they didn’t have programs to support you if you couldn’t find staff, you wouldn’t open a business,” Davidson says.

He adds that the government did need to address problems with the program, and action was needed, so he is not opposed to the new changes yet.

I don’t want to knock the formula they’ve come up with yet—it’s a tough thing. They have to look out for what is in the best interest of the country, and business owners like me will look out for what;s in our best interest . . . We need to go down that path and see how it affects people first. I just want to go down that road now that we have these new rules, and let’s see how it works.”

Komarnicki says the biggest problem is that the program is no longer a temporary fix, as more workers in the region apply for permanent residency.

“Maybe with a booming economy in Saskatchewan that has seen sustained growth, we have to start thinking of something more permanent than the temporary foreign worker program,” Komarnicki says.

McLellan says two different streams—one for workers who want to become residents, and one for those who don’t, would indeed be a positive change.

“If the term temporary is the issue, let’s change the name, but allow these people to come in on a temporary basis and flow through if that is what they want, or expand the other immigration programs to allow the workers who do want to come here and become Canadian citizens to do so,” McLellan said.