TFW cap impacts labour shortage: Kobly

Think Alberta’s labour shortage is severe now? Wait until July 2016. That’s when the federal government’s cap on the number of low-wage temporary foreign workers that a business can employ will have been ratcheted down to 10 per cent of its workforce — a reduction that, when combined with Alberta’s current labour shortfall of about 50,000 people, will leave a provincial deficit of 90,000 employees.

Think Alberta’s labour shortage is severe now? Wait until July 2016.

That’s when the federal government’s cap on the number of low-wage temporary foreign workers that a business can employ will have been ratcheted down to 10 per cent of its workforce — a reduction that, when combined with Alberta’s current labour shortfall of about 50,000 people, will leave a provincial deficit of 90,000 employees.

Those are the numbers Ken Kobly tossed around on Wednesday, when the president and CEO of the Alberta Chambers of Commerce spoke at a luncheon meeting of the Red Deer and District Chamber of Commerce.

“The casualties are coming,” said Kobly of the likely impact on businesses.

He cited the results of a recent survey spearheaded by the Alberta Chambers of Commerce, which found that 91 per cent of respondents felt they had exhausted every option to find Canadian workers. Fifty-eight per cent said it was likely that they would have to reduce their hours of operation, and 23 per cent said closure of their operations was likely.

Businesses are already being shuttered as a result of the labour shortage and the new restrictions placed on Canada’s temporary foreign worker program, said Kobly.

“Business owners are getting tired of working 14-, 16-hour shifts,” he said.

Part of the problem stems from the fact that while Alberta has an unemployment rate of 4.4 per cent — only about 0.5 percentage points above the level that economists consider full employment — the labour market is much different in other parts of the country.

“This issue is a regional issue,” said Kobly. “No different than the regional issue that Quebec has, and Quebec has control over their immigration policies.”

He accused federal Employment Minister Jason Kenney of overstating the number of temporary foreign workers in the country and understating the wage increases in Alberta’s food service industry.

“We don’t underpay in Alberta,” said Kobly. “The reality is we’re forced not to, simply because there’s a huge competitive labour market.”

Kobly also said it’s a myth that temporary foreign workers cost less than Canadians to employ. The price tag to recruit and bring in one foreign worker is between $11,000 and $14,000, he said.

“Given a choice, Alberta businesses would dearly love to hire Albertans first and Canadians, and only are going to guest workers as a very last measure.”

There are employers who have abused the system, acknowledged Kobly. But these could be addressed through increased enforcement rather than broad rule changes.

Other unwelcome changes to the temporary foreign worker program include big increases in the application and renewal fees, and penalties of up to $100,000, he said.

For its part, the Alberta Chambers of Commerce has been lobbying for an Alberta solution to the problem.

“Unless the federal government realizes that this is a regional issue and sends the cavalry, we’re going to have some issues in this province; huge issues,” said Kobly.

And those issues will impact more than just the businesses that rely on foreign labour.

“For those of you who don’t use temporary foreign workers, this issue is going to affect you too, because when we hit 90,000 job vacancies I can tell you that it’s going to affect your business as well.”

Kobly was later asked if he thought the temporary foreign worker program should serve as a path to Canadian citizenship.

“My personal opinion is if you’ve got a temporary foreign worker or guest worker who’s worked for two, three or even four years, and they’ve paid their taxes and stayed on the right side of the law and become part of their local community, they should be allowed to stay here.”

hrichards@bprda.wpengine.com

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