Are There No Jobs For Canadians?: Surge in Demand for Temporary Foreign Workers in Canada Raises Concerns

Businesses’ demand for temporary foreign workers has surged across Canada, with employers receiving approval to hire more than double the number of workers through the federal program last year compared to five years ago. According to an analysis by CBC News of federal data, 239,646 temporary foreign workers were cleared for employment in 2023, a significant increase from 108,988 in 2018.

This surge is largely attributed to the Canadian government’s efforts to loosen hiring restrictions in response to post-pandemic labor shortages. While the program aims to provide short-term relief to employers as a last resort, it has faced scrutiny for potential negative impacts on the broader economy and the vulnerable positions it may place workers in.

A key component of the Temporary Foreign Worker Program (TFWP) is the Labour Market Impact Assessment (LMIA), a document that employers must obtain before hiring a foreign worker. An LMIA is granted by Employment and Social Development Canada (ESDC) and serves as proof that there are no Canadian workers available to fill the job. The process of obtaining an LMIA requires employers to demonstrate their efforts to recruit domestically and prove that hiring a foreign worker will not negatively affect the Canadian labor market.

The TFWP has seen a wide range of industries increasingly turning to it. Although farm and greenhouse workers have consistently been the most in-demand roles, other sectors have shown a marked increase in reliance on temporary foreign labor. Notable increases include administrative assistants (from 287 in 2018 to 3,337 in 2023), light duty cleaners (from 201 to 3,043), and construction trade helpers and laborers (from 132 to 5,353).

The program’s expansion has sparked debate among economists and labor experts. Mikal Skuterud, a labor economics professor at the University of Waterloo, criticized the narrative of labor shortages, suggesting that it primarily benefits corporate interests. “All we hear about are labor shortages, [but] we have to begin to recognize that this really is a self-serving narrative mostly coming from corporate Canada,” Skuterud said.

Work permit data from Immigration, Refugees and Citizenship Canada (IRCC) reveals that the number of temporary foreign workers in Canada hit its highest point since records began in 2015. This trend reflects employers’ growing interest in the program and suggests a broader economic dependency on temporary foreign labor.

The food service industry, particularly fast-food chains and restaurants, has been a significant driver of demand for temporary foreign workers. In 2023, roles such as cooks, food service supervisors, food counter attendants, and kitchen helpers saw substantial increases in LMIA approvals. Food counter attendant positions alone jumped from 170 in 2018 to 8,333 in 2023. The top 10 employers in this category last year were all fast-food operators.

A spokesperson for Franchise Management Inc., which operates Pizza Hut, KFC, and Taco Bell franchises, acknowledged the program’s importance for maintaining operations in rural and northern areas. “Unfortunately, some of these communities often lack the population base to meet the demand for labor,” said Dana Myshrall in an emailed statement.

To address labor shortages exacerbated by the pandemic, the federal government in 2022 doubled the proportion of low-wage workers businesses could hire through the TFWP, from 10 percent to 20 percent of their workforce. Certain sectors, including food service, were allowed to hire up to 30 percent of their staff through the program.

The Canadian Franchise Association highlights the program’s stability benefits, as workers’ permits are tied to their employer, reducing the likelihood of them leaving for a competitor. “It guarantees a worker will stay employed with them for the term of the agreement,” the association noted on its website.

While the TFWP provides an opportunity for many to seek employment and potential permanent residency in Canada, experiences vary widely. Marco Luciano, director of the advocacy group Migrante Alberta, pointed out that while some employers adhere to contracts and support workers in their residency applications, others may not.

Former temporary foreign worker Ruth St-Martin shared her positive experience working at an Arby’s restaurant in St. Albert, Alberta, before transitioning to a permanent residency and becoming an oil and gas lab technician. “My boss [was] really, really good, just really nice,” St-Martin said. “When I got my permanent residency, I didn’t quit right away in Arby’s, because I want[ed] to show my loyalty to my boss.”

Information for this briefing was found via CBC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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