Low-wage workers hurt by Temporary Foreign Worker Program

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This article was published 16/08/2024 (445 days ago), so information in it may no longer be current.

There is increasing recognition that certain aspects of Canada’s Temporary Foreign Worker (TFW) program have had negative consequences for the TFWs themselves but also for domestic workers.

This is especially true for low-income workers who are struggling to find jobs, as the unemployment rate for young workers and recent immigrants has soared in recent months. This is due in part to changes made by the federal government in 2022 that were designed to deregulate the low-wage stream of the TFW program and, to the delight of some employers and their lobbyists, boost the number of low-wage TFWs.

In the past, TFWs were used largely to fill positions in the agriculture stream. These differ from the low-wage stream, which allows employers to recruit TFWs for positions that pay less than the provincial median wage. As of April 2024, the median hourly wage in Manitoba was $25.00.

Prior to the 2022 changes, the number of approved workers in the low-wage stream was quite low compared to the number of workers in the agricultural stream. That changed beginning in 2022. Exemptions in the program that benefitted seasonal industries such as seafood processing were strengthened. The validity of labour market impact assessments — the easily-torqued documents that employers must provide to guarantee that importing labour will not harm local workers — was stretched from nine to 18 months.

But wait, there’s more. Prior to the government’s changes, the percentage of low-wage TFWs companies could employ was 10 per cent. The government boosted the cap to 20 per cent. In several sectors including construction, hospitals, and residential care facilities, the cap was raised to an eye-popping 30 per cent.

And still more. Previously, employers were not permitted to recruit TFWs in some low-wage sectors in regions with unemployment rates of six per cent or higher. The government did away with this policy, allowing TFWs to occupy low-wage jobs despite comparably high local unemployment.

The cumulative effect of this deregulation was an explosion in the number of TFWs approved to work in Canada in the low-wage stream. In the 12 months ending in March 2024, employers were approved to fill roughly 89,000 positions in the low-wage stream. The number of TFWs approved to work in the food and retail sectors, for example, between 2019 and 2023 increased by 211 per cent. TFWs in the low-wage stream are now only slightly lower than the number approved to work in the agriculture stream.

The staggering growth in the low-wage and agricultural streams of the TFW program are harmful to both domestic workers and the TFWs themselves.

United Nations special rapporteur Tomoya Obokata, after investigating the program last year, condemned both streams in the strongest possible language. “Agricultural and low-wage streams of the temporary foreign workers program constitute a breeding ground for contemporary forms of slavery,” Obokata wrote. This follows a 2021 report from the auditor general noting that the federal government had failed to protect TFWs in these streams, who were often exploited and mistreated by employers.

While the government has pledged to improve oversight of the programs to better protect TFWs, it’s hard to imagine that it has successfully done so in the face of explosive growth in the low-wage stream in only the last two years.

For Canadian low-wage workers, the consequences of the growth in the low-wage stream are significant. Western University academic Mike Moffatt, for example, describes the government’s 2022 changes as “a deliberate move by the federal government to suppress wage growth for low-income Canadians…” and an “attack on labour rights.”

Low-income domestic workers must compete with a historically high number of TFWs approved in the low-wage stream. Perhaps more importantly, growth in the number of TFWs in the low-wage stream has set back wage growth for low-income workers, likely by years. There are several examples of unionized workers whose bargaining positions have been undercut by the increase in TFW labour in these sectors. Why would employers deliver on higher wages for workers when the federal government has sent signal after signal that it is willing to open the taps on low-wage TFW labour?

Who is looking out for low-income workers? Justin Trudeau’s federal Liberal government deserves blame for the ill-considered 2022 changes.

But Moffatt points out a discomforting fact about the 2022 changes: they were made a mere 13 days after the Liberals signed a supply and confidence agreement with Jagmeet Singh’s NDP, which allowed the minority Liberal government to remain in power.

Singh has won some important policy concessions from the federal government for low-income Canadians as a result of this agreement. But he must also wear the government’s disastrous 2022 changes to the low-wage stream of the TFW program and one would hope that he would use the threat of bringing down the government to demand changes.

Royce Koop is a professor of political studies at the University of Manitoba and academic director of the Centre for Social Science Research and Policy.