Minister of Employment, Randy Boissonnault, speaks at a news conference in Ottawa, on May 9.Justin Tang/The Canadian Press
Unemployment has been steadily rising for more than a year, as the Bank of Canada’s anti-inflation campaign weighs down the private sector.
Younger workers and recent permanent immigrants have been particularly hard hit. According to the June Labour Force Survey from Statistics Canada, the unemployment rate for both groups has climbed well into double digits.
Meanwhile, the federal government is busy approving record numbers of permits under the low-wage stream of the temporary foreign worker program from companies claiming that they are unable to find Canadians to fill vacancies.
This is not an accident: the Liberals rewrote the rules for the temporary foreign worker program two years ago and further opened the taps for low-wage workers from abroad.
There were three key changes to the low-wage stream of the temporary foreign worker program, separate from the agriculture stream. Previously, companies with permits under the low-wage stream could not fill more than 10 per cent of their positions with temporary foreign workers. In 2022, that cap rose to 20 per cent for all sectors, and to 30 per cent for seven sectors deemed to be particularly suffering from labour shortages.
The government also doubled the period for which labour market impact assessments were valid to 18 months from nine months. Those assessments are the basis for obtaining a permit for workers, and are supposed to show that no Canadian citizens or permanent residents could fill the positions.
In addition, the Liberals waived a rule that had prohibited companies in the accommodation and retail sectors from hiring temporary foreign workers when the local unemployment rate was 6 per cent or higher.
It was clear even in 2022 that the changes were poorly conceived. “Removing the automatic refusal to process will help employers in regions where severe labour shortages have persisted, despite an unemployment rate of 6% or higher,” a government backgrounder stated.
That’s (oxy)moronic: a 6-per-cent unemployment rate is a clear indicator that there is not a labour shortage at all, never mind a severe one. Sure, it’s possible that a business might still have problems filling vacancies, even with relatively high unemployment.
But that is simply the market indicating that the wages on offer are too low. Not wanting to pay the going rate for labour is emphatically not the same thing as a shortage of labour.
But the Liberals, egged on by business, bought into the notion that the solution to tight labour markets was to allow companies to import cheap labour rather than to increase wages, or to boost the productivity of their existing staff.
The effect of all of those changes was to dramatically weaken the link between labour market conditions and the low-wage temporary foreign worker program, even as the number of workers permitted to enter Canada soared.
Rising unemployment levels would have slowed that intake under the old regulations. Not so under the new rules.
As is the case with much of the immigration file, the Liberals have moved only slowly to undo what have become clearly damaging changes. Last October, the government decreased the validity period for labour market impact assessments to 12 months, when the national unemployment rate had hit 5.7 per cent, up from 5.1 per cent in the spring of 2022.
In March, the validity period was reduced to six months, a belated recognition of the realities of the labour market. At the same time, the government said only two sectors would still be allowed to use foreign workers for up to 30 per cent of their workforce. But it kept in place the 20-per-cent rule for all other sectors, despite rising unemployment.
On Tuesday, Employment Minister Randy Boissonnault hinted that further tightening may be on the way, as he announced several anti-fraud measures. Of course, companies who abuse the rules and their workers should be punished.
But the real problem with the low-wage temporary foreign worker program is not abuse of the rules – it’s the rules themselves. The press release from Mr. Boisonnault’s office boldly stated that the temporary foreign worker program “is designed as an extraordinary measure to be used when a qualified Canadian is not able to fill a job vacancy.”
That may have been the case once. But now that is demonstrably untrue – and a slap in the face to unemployed workers struggling to find a job while the Liberal government allows businesses to continue to import cheap labour.