Employment Minister Randy Boissonnault recently likened the temporary foreign worker program to an accordion that is “meant to flex with the economy.”
When there are a high number of job vacancies, the accordion expands, meaning the rules are loosened and more foreign workers can enter the country, he explained. But when the unemployment rate rises and vacancies dwindle – as is now the case – the instrument closes. The rules are tightened, and fewer workers are allowed in.
The federal Liberals are playing their same old song: We know better than markets how to engineer outcomes. Instead of reserving the right to flood the market with low-wage foreign workers to solve short-term labour needs, Mr. Boissonnault should have simply geared down the program permanently.
The federal government needs to stop meddling so much in labour markets. It’s not good for workers and it’s not good for Canada’s drawn-out productivity problem. Set the rules, leave them alone and let markets function. Time to put down the accordion.
In an ideal world, the federal government would not diagnose low unemployment and high vacancies as a problem, but as an opportunity. Companies could raise their wages to fill positions or make investments to help their staff work more efficiently. Perhaps some companies would go bust, but so be it: If a fast-food joint needs a steady stream of low-wage cooks and servers from abroad to remain viable, then maybe it’s not a great business.
Too often, the Liberals intervene and show a distrust of markets, where resources are allocated as efficiently as possible. These intrusions aren’t limited to labour. Federal business subsidies have soared 140 per cent over nine years to $40-billion in fiscal 2023-24, according to a research paper from John Lester, a fellow-in-residence at the C.D. Howe Institute. Most of the subsidies, he concluded, were harming the economy.
In a notable example, Canadian governments have showered billions of dollars in corporate handouts to a handful of foreign companies, hoping to build a domestic supply chain for electric vehicles – an industry that is already dominated by Chinese players.
When it comes to labour, the Liberals not only think they can solve “shortages,” but predict the jobs of the future.
For many years, the express entry program for skilled immigration was a world-beating method for selecting newcomers. Candidates were ranked by a points system, and the government would regularly invite the top scorers to apply for permanent residency. The idea was to identify high-skilled people, not attempt to slot them into certain jobs.
That system has been badly diluted. Since last year, Ottawa has frequently used the program to pick people based on their French-language abilities or “specific work experience.”
The in-demand jobs include some understandable ones (family doctors and nurses), but also some head-scratchers: dietitians, massage therapists and landscape architects.
The result of this new scheme? Candidates with higher scores – who have higher earnings potential in Canada – are bypassed in favour of people with lower scores, but the right experience, as deemed by Ottawa. This is a dreadful development for raising average wages in the country.
There are numerous other missteps. Last week, the federal government said that foreign master’s and doctoral students will be included in its annual caps on study permits. (Why limit the inflow of potential high earners?) And since last year, the fitness clothing company Lululemon has been able to skip the usual procedures for hiring temporary foreign workers because it’s expanding its headquarters in Vancouver. (Who knew it was so tough to hire graphic designers and marketing managers in the Lower Mainland?)
Lucky for Ottawa, the solutions are simple enough.
Let the express entry system operate as it did in the early years of the Liberals’ tenure, with points guiding immigrant selection. Don’t put arbitrary caps on visas for top-tier students. Use the temporary foreign worker program sparingly – say, to support food production. Get out of the labour predictions game. And don’t bend to corporate pressure on so-called worker shortages.
More importantly, set the rules and let markets react accordingly. Enough with the tinkering and clumsy interventionism. It’s time for Ottawa to change its tune.