Restructuring of Canada’s temporary foreign worker program will hurt employers, employees and even consumers, say critics of the changes announced Friday by Employment Minister Jason Kenney and Immigration Minister Chris Alexander.
“We’ve already been hearing from our members saying they’re going to be pulling back on investments in new locations and stores, and it may in fact mean a reduction in hours in their existing locations because they simply don’t have enough people,” said Richard Truscott, Alberta Director with the Canadian Federation of Independent Business, on Monday.
Reg Warkentin, policy co-ordinator with the Red Deer Chamber of Commerce, said he’s aware of at least one major business in the city that’s worried about the impact.
“Honestly, it’s devastating for them.”
Alberta Chambers of Commerce president and CEO Ken Kobly was also predicting reductions in business activity.
“We have been told in no uncertain terms that these changes mean that businesses will close and hours will be reduced.”
The outlook is not good for temporary foreign workers either, said Jhong Dela Cruz, a local spokesman for advocacy group Migrante Alberta.
Among the changes announced by Kenney and Alexander is a reduction in the time that temporary foreign workers can stay in Canada, to two years from four.
The application cost for employers jumps to $1,000 annually from $275 every two years, with this amount not refundable.
In regions where unemployment is six per cent or higher, businesses will not be able to utilize temporary foreign workers in low-wage jobs in hotel, restaurant, retail and other sectors.
By 2016, workplaces with 10 or more employees will be allowed to have no more than 10 per cent of their low-wage workforce made up of temporary foreign workers.
“So many businesses here are going to be put in such a tight position, trying to meet the minimum requirements and pay the extra cost because there just aren’t enough people here,” said Warkentin.
Alberta, with an unemployment rate of 4.6 per cent (3.5 per cent in the Red Deer region) will be hit the hardest, said Truscott.
“This is ground zero on the issue of the shortage of labour.”
He anticipates a situation similar to 2006, when the province’s hot economy and tight labour market forced many business to reduce hours and/or services.
“I think we’re going to see spontaneous closures of restaurants because they don’t have enough staff; we’re going to see wings on some hotels and motels have to reduce operations or even close because they don’t have enough people to service the rooms.”
The consequences could extend further, warned Warkentin.
“It’s going to result in Canadians losing jobs too,” he said, explaining that if businesses like restaurants are forced to reduce hours or shut down, all staff will be affected.
Truscott confirmed that nearly 60 per cent of CFIB’s members have said the temporary foreign worker program enabled them to maintain their operations and keep Canadians on the payroll.
“It’s been a real lifeline for a lot of businesses in Alberta, and by restricting access they’re going to do great damage to our economy, there’s no question about it.”
Consumers will also feel the effects, said Warkentin.
Migrante Alberta said in a release that the new rules will lead to “massive deportations and poorer treatment of foreign workers in Canada.”
“Workers will keep coming into Canada in hopes of a better future for their families, oblivious to the reality that the promise of decent wages and permanent immigration will be short-lived,” Marco Luciano, a Migrante Alberta spokesperson in Edmonton, said in a release. “These changes highlight the use of foreign workers as a disposable workforce only — to be used, abused and disposed of.”
Reported abuses of the program by some employers prompted the changes, which also include stiffer sanctions and penalties for violations and closer monitoring of the program. Truscott said tougher enforcement measures is the right course of action.
“If there are some bad apples misusing the program they need to be held to account, but we think this is a gross overreaction by the federal government.”
He added that the perception by many that temporary foreign workers give businesses a cheap alternative to Canadian labour is not true.
“Canadians have other opportunities, especially in a place like Alberta, where the pull of the oilpatch is so strong that small businesses have a devil of a time competing with a big multinational oil and gas company — not just for talent, but for people, period.”
Alberta Jobs, Skills, Training and Labour Minister Kyle Fawcett also offered a less-than-enthusiastic response on Friday to the overhaul of the temporary foreign worker program.
“Today’s changes are a fundamental re-organization of the TFWP and have the potential to create even more pressure on Alberta’s already tight labour market. These changes overlook the on-the-ground realities faced by Alberta small businesspeople each and every day in communities across this province.”