Outsourcing controversy rattles RBC, supplier

The increasingly widespread use of outsourcing and the way in which Canada’s temporary foreign worker program could be used to facilitate the practice emerged as a key issue Tuesday in the controversy over the Royal Bank of Canada’s decision to outsource dozens of Toronto jobs.

TORONTO — The increasingly widespread use of outsourcing and the way in which Canada’s temporary foreign worker program could be used to facilitate the practice emerged as a key issue Tuesday in the controversy over the Royal Bank of Canada’s decision to outsource dozens of Toronto jobs.

Many Canucks have lambasted RBC after it came to light that Canada’s largest bank contracted an external supplier called iGate to provide certain technology services, a decision which ousts 45 employees from their current roles.

Questions have been raised about how iGate brought its own employees into Canada under the temporary foreign worker program so they could be trained at RBC branches for the services they’ll be providing to the bank.

The program itself has been criticized as a tool that allows companies to opt for temporary workers who can be paid up to 15 per cent less than Canadians. iGate told The Canadian Press on Tuesday that it operates with a “high level of integrity” and will “fully co-operate” with a government investigation into the situation.

“iGATE’s hiring practices are in full compliance with all Canadian laws,” said Jason Trussell, senior vice president and regional head of iGate Canada.

Human Resources Minister Diane Finley has asked officials to review documents submitted by iGate after apparent discrepancies appeared between public statements made by RBC and information previously provided to the government by iGate.

“We are very concerned with recent issues involving the Temporary Foreign Worker program,” Finley’s spokeswoman Alyson Queen said Tuesday.

“Officials are investigating recent reports concerning labour market opinions granted to iGate and will look into any evidence that the program is being misused.” To obtain permits for temporary foreign workers, companies need to apply for labour market opinions and show that a Canadian cannot be found to do the work.

iGate (NASDAQ: iGATE), headquartered in the U.S. with offices around the world, employs more than 28,000 people and counts RBC as one of its larger clients.

The company has run afoul of international laws involving temporary foreign workers in the past.

One immigration expert said iGate may have received a positive labour market opinion by demonstrating that the permits it was seeking were for jobs that were never going to remain in Canada over the long term.

“The work permits haven’t been issued with the intention of them doing work in Canada. These jobs are going to get outsourced to India, which is nothing illegal,” said Toronto immigration lawyer Chantal Desloges.

“I think the public outrage is being directed towards temporary foreign workers but it’s not actually about that. What people are really upset about is jobs going to India, China.”

Desloges added that the labour market opinion system runs on an honour-based system and could benefit from more oversight.

The practice of outsourcing, however, isn’t likely to disappear, said one expert with Western University’s Richard Ivey School of Business.

“Outsourcing is just international trade in the service sector and the rationale to support it is similar to the trade of manufactured goods,” said Shih-Fen Chen.

To explain the positives of the practice, Chen argued that outsourcing a Canadian company’s technical services could result in higher incomes for an overseas worker who might later choose to buy or invest in Canadian products. The tricky issue for corporations is to manage the impact of outsourcing on their existing employees.

“Can the person who works for a bank easily find a job after the bank outsourced the service to another country? That is the problem. But overall it should be good for both countries involved.”

In 2008, the U.S. Department of Justice ordered iGate to pay US$45,000 in civil penalties to settle allegations that the company had discriminated against American citizens in its employment practices.

The settlement also required iGate to train its recruitment staff and post a non-discrimination statement on its website.

The Justice Department found that between May and June of 2006, iGate placed 30 job announcements for computer programmers that “expressly favoured” people holding a temporary foreign worker visa, consequently discriminating against U.S. citizens, permanent residents and other legal U.S. workers.

Just Posted

Alberta Premier Jason Kenney arrives at the 2021 budget in Edmonton on Thursday, Feb. 25, 2021.THE CANADIAN PRESS/Jason Franson
Alberta launches COVID vaccine lottery with million-dollar prizes to encourage uptake

The premier says the lottery will offer three prizes worth $1 million a piece, as well as other prizes

Dharmesh Goradia, and his daughter Vidhi and wife Chaitali, at the 2017 festival for the Godess Durga, held at the Golden Circle. (Photo contributed)
Draft curriculum misses the mark for central Alberta Hindu society

Meeting scheduled with Alberta Education officials

Air Canada planes sit on the tarmac at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, April 28, 2021. Air Canada says it will recall more than 2,600 employees who were furloughed during the COVID-19 pandemic. THE CANADIAN PRESS/Nathan Denette
Alberta’s tourism sector hurt by COVID-19 pandemic: ATB Financial

Between border closures, public health measures and hesitancy to travel, Alberta’s tourism… Continue reading

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

A man wears a face mask as he walks by a sign for a COVID-19 vaccination site in Montreal, Sunday, May 16, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Canada paid a premium to get doses from Pfizer earlier than planned

OTTAWA — Canada paid a premium to get more than 250,000 doses… Continue reading

The Kamloops Indian Residential School in Kamloops, B.C., is shown in this 1930 handout photo. HO — Deschatelets-NDC Archives
Calls grow for Ottawa to review settlement decisions for residential school survivors

Lawyer Teri Lynn Bougie still cries when she talks about the final… Continue reading

Syringes are readied at a COVID-19 mobile vaccination clinic for members of First Nations and their partners, Friday, April 30, 2021 in Montreal. Most of the federal contracts for COVID-19 vaccines allow for Canada to donate some of its doses to other countries or international aid organizations and in at least three cases, for the doses to be resold.THE CANADIAN PRESS/Ryan Remiorz
Canada’s vaccine contracts allow for doses to be donated, in some cases resold

OTTAWA — Most of the federal contracts for COVID-19 vaccines allow for… Continue reading

Grand Chief Stewart Phillip, President of the Union of British Columbia Indian Chiefs, responds to the report on the National Inquiry into Missing and Murdered Indigenous Women and Girls, in Vancouver, on Monday June 3, 2019. As stories of the horrors of residential schools circulate after the Tk'emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
Two sides of the same coin: Ex-foster kids identify with residential school survivors

VANCOUVER — As stories of the horrors of residential schools circulate after… Continue reading

A woman sits and weeps at the scene of Sunday's hate-motivated vehicle attack in London, Ont. on Tuesday, June 8, 2021. Four members of a family in London, Ont., are set to be buried today. The public has been invited to help celebrate the lives of Talat Afzaal, 74, her son Salman Afzaal, 46, his wife Madiha Salman, 44, and their 15-year-old daughter Yumna Salman.THE CANADIAN PRESS/ Geoff Robins
Funeral to be held today for London family killed in attack

LONDON, Ont. — Four members of a Muslim family killed in what… Continue reading

Canadian Prime Minister Justin Trudeau and United States President Joe Biden listen to United Kingdom Prime Minister Boris Johnson deliver opening remarks at a plenary session at the G7 Summit in Carbis Bay, United Kingdom Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau to discuss foreign policy with G7 leaders at second day of summit meeting

CARBIS BAY, CORNWALL, ENGLAND — Foreign policy is on the agenda for… Continue reading

Most Read