Temporary foreign workers program spurs higher unemployment

Temporary foreign workers program spurs higher unemployment, study claims

By Lee-Anne Goodman
Calgary Herald: April 24, 2014

OTTAWA — A new report by the C.D. Howe Institute is harshly critical of the federal government’s controversial temporary foreign workers program, saying it has spurred a higher unemployment rate in western Canada.

The study by C.D. Howe, a non-partisan public policy think-tank, points out that changes to the program enacted between 2002 and 2013 made it much easier for employers to hire temporary foreign workers.

“These policy changes occurred even though there was little empirical evidence of shortages in many occupations,” writes the report’s author, economist Dominique Gross.

“When controlling for differences across provinces, I find that changes to the TFWP that eased hiring conditions accelerated the rise in unemployment rates in Alberta and British Columbia.”

The Conservative government has since tightened the regulations, but there have been a spate of high-profile allegations in recent months about an array of employers, particularly restaurant operators, abusing the program.

Fast-food giant McDonald’s has announced it is freezing its participation in the program pending a third-party audit after it found itself in hot water for hiring temporary foreign workers in B.C.

Hundreds of Canadian companies and governmental departments employ temporary foreign workers, according to data compiled by Employment Minister Jason Kenney’s department. But there’s been an especially dramatic increase in the number of hotels and restaurants accessing the program under the Conservatives.

The initiative was originally designed to address shortages of skilled workers, not menial labour.

Kenney is vowing to lower the boom on any companies found to be abusing the program, and a spate of new rule changes is expected to be announced soon.

The C.D. Howe study, however, says that although the government’s 2013 crackdown on the program was a welcome move, it’s probably insufficient because of the absence of solid data about the state of Canada’s labour market.

That echoes concerns raised by Don Drummond, a respected economist who has given the Tories 69 recommendations to vastly improve the quality of the information on Canada’s labour markets. He said earlier this week that most of them have yet to implemented.

(read the full article at Calgary Herald)