Desperate Canadian businesses seek changes to temporary foreign worker program

Desperate Canadian businesses seek changes to temporary foreign worker program

Desperate Canadian businesses seek changes to temporary foreign worker program

This is part 2 of Alia Dharssi’s series, Workers Without Borders. To see the series in its entirety, click here.

The workers move quickly at Sunterra Farm’s pork processing plant in the central Alberta town of Trochu.

Dressed in white overcoats, blue aprons, rubber boots and hard hats, dozens of butchers and meat packers, mostly from Mexico and the Philippines, rapidly debone, sort and package cuts of pork into boxes destined for Japan.

It’s a promising export for Canada, but one struggling to expand its market abroad because the meat-packing industry doesn’t have enough people to do the gruelling work.

At Sunterra, there are only enough employees to handle basic primal cuts like loins, butts and shoulders. Secondary cuts that are delicacies abroad, including hearts, livers and feet, don’t make it down the processing line.

“We’re throwing food away,” laments Mark Chambers, senior production manager at Sunterra.

For years, the agri-food company relied on temporary foreign workers to fill ongoing labour shortages in facilities around Alberta. Most obtained permanent residence and stayed.

But the flow of migrant workers has slowed after a series of restrictions enacted between 2011 and 2014 on how employers can use the Temporary Foreign Worker Program.

Margie Badao a worker at Sunterra Meats in Trochu, Alta., who started as a temporary foreign worker.
Margie Badao moves boxes of meat along the packing line at Sunterra Meats in Trochu, Alta. Badao originally came to the company from the Philippines as a temporary foreign worker and now has permanent status. (Ted Rhodes/Postmedia)

Meat packers aren’t the only ones hurting.

From the ski slopes of Whistler in the West to the shores of the Bay of Fundy in the East, Canadian businesses say they are desperately looking for employees and blame restrictions on the temporary foreign workers for costing the national economy jobs, productivity and revenue.

Their complaints prompted the federal government to conduct a spring review of the program, which is expected to be tabled when Parliament opens this month, along with proposed reforms.

Businesses eagerly await change. Some speak as though the current state of affairs could lead to crisis.

As the government deliberates over the issue, technology companies warn they risk losing projects to global competition; hotel managers worry their housekeepers have too many beds to make; and agricultural producers are throwing food in the trash.

“We want to be sure that we’re working with the companies so that they can find Canadians to take those opportunities if they wish to take them,” said federal Labour Minister MaryAnn Mihychuk in an interview.

“If they can’t find that workforce, then they must have access to temporary foreign workers.”

Labour Minister MaryAnn Mihychuk
Labour Minister MaryAnn Mihychuk says the government needs to work with companies to ensure they have Canadians to fill jobs if possible — and access to temporary foreign workers if they can’t. ADRIAN WYLD /THE CANADIAN PRESS

The TFWP’s Troubled Past

But the problems with the program are about more than simply making sure Canadian employers have enough staff.

Many question whether businesses should become reliant on temporary foreign labour at all, especially for low-skilled industries.

“We can’t keep going the way we are going with this program,” said Michelle Rempel, the Conservative party’s immigration critic. “It’s not sustainable. It doesn’t allow for stabilization of wages over time. It’s not a market-based solution. It doesn’t respect rights of workers.”

The current predicament can be traced back to 2002, when the Chretien government opened the decades-old temporary foreign worker program to many occupations that didn’t need a degree, such as butchers, truckers and construction workers.

Previously, the program focused on highly skilled foreigners, seasonal farm workers and caregivers.

From 2002 to 2014, the program more than doubled from 76,787 to 177,704 workers.

This expansion was soon marred by stories of abuse.

In 2012, news broke that a B.C. mining project was planning to hire 200 miners from China and had listed Mandarin as a job requirement, a condition that disqualified thousands of unemployed local miners.

More problems followed, including allegations the Royal Bank of Canada and McDonald’s had passed over Canadians for foreign staff.

Troubling stories also emerged of temporary foreign workers who were not paid for overtime, weren’t given safety gear for dangerous jobs or were forced to live in crowded houses.

Temporary foreign workers and economy graphic


The Harper government responded with a series of restrictions in 2011 and again in 2014. The overhaul made the program harder for all businesses to use, placed priority on giving Canadians a chance at jobs first, and tried to ensure positions were truly temporary.

“We went from one end of the spectrum, where everyone was let in, to the other end of the spectrum where hardly anybody was let in,” said Immigration Minister John McCallum at a news conference in Calgary in August.

“So what we are seeking to find is a middle ground.”

Since 2014, the number of temporary foreign workers in Canada has dropped by tens of thousands.

The economic downturn in Alberta, where the once-ravenous appetite for workers has tapered off, has certainly taken a toll.

But policy changes also drove the dip. A 2011 rule limiting migrant workers in most jobs to four years in Canada has forced thousands to leave the country since April 2015.

The number of temporary workers many employers could have was also restricted to 30 per cent of their workforce in July 2014, with the cap working its way down to 10 per cent this year.

In addition, the Labour Market Impact Assessment, a process companies must use to prove they can’t find Canadians for jobs going to migrant workers, became more rigorous and expensive.

The government also narrowed the definition of the TFWP so that if focused on only those foreign workers who needed an LMIA. Those who didn’t, such as inter-company transfers, young people on working holiday visas and workers allowed under free-trade agreements, were grouped into the International Mobility Program.

Some industries have been hard hit.

Mushroom growers lost about 600 harvesters in April 2015 when they reached the four-year limit on their right to work in Canada, said Ryan Koeslag, chief executive officer of Mushrooms Canada.

Farm administrator Jim Suydam, with All Seasons Mushrooms
General manager Jim Suydam examines mushrooms at All Seasons Mushrooms near Crossfield. His company uses the temporary foreign workers program, but he says changes since 2011 have made business more difficult. (Lyle Aspinall/Postmedia)  LYLE ASPINALL / LYLE ASPINALL/POSTMEDIA NETWORK

Later that year, the mushrooms at All Seasons Mushrooms Inc. in Crossfield, Alta., were growing too fast for its depleted staff to keep up.

“There were days when a lot of mushrooms were essentially thrown away,” said Jim Suydam, the farm’s general manager, standing amid rows of mushrooms planted on shelves with layers of soil. “The entire crop was steamed off early, and we prepared for the next go around.”

Others feeling a pinch include the tourism industry in resort towns like Whistler, Banff and Lake Louise, and video game producers in Vancouver and Montreal. Families looking for caregivers, apparel makers like Lululemon and Mountain Equipment Co-op, and the construction industry have also been side-swiped by the changes.

The Economic Consequences of Temporary Foreign Workers

Some economists insist that filling many of these jobs, especially low-skilled ones, with temporary workers is probably a bad idea in the first place.

“There are different choices that can be made,” said Michael Grant, director of research for industry and business strategy at the Conference Board of Canada. “They don’t necessarily need labour to do a job. They can buy a machine.

“They can lower costs in all kinds of ways, but they want the government to engineer cheap labour for them.”

Not making investments in efficiency and productivity can, in the long run, hurt the Canadian economy.

“They don’t adapt to technology, to the new systems, so basically, what happens is, over time, they lose their competitiveness in globalization,” said Dominique Gross, an economist at Simon Fraser University.

Access to temporary workers can discourage employers from training Canadians for jobs, Gross added.

“With a program like that, they basically have access to the world’s supply of workers,” she said. “They are going to find people who have exactly the skill they need, so they don’t need to invest any cost in training.”

Today, about 1.3 million Canadians are unemployed, four times more than the number of vacancies.

“It’s clearly a mismatch in the skills available in the workers, wherever they are, and the job opportunities,” said Mihychuk, who explained the federal government is working to support businesses and increase training so that unemployed people can fill vacant roles.

The crackdown on temporary workers did open some opportunities for Canadians.

One immigration and staffing agency that used to recruit hundreds of temporary foreign workers for tourism, hotel and restaurant jobs started filling vacancies with young Canadians from the millennial generation.

“The program is successful because those companies don’t have access to TFWs,” said Benjamin Guth, vice-president of Diamond Immigration, in his submission to the parliamentary committee reviewing the Temporary Foreign Worker Program.

Guth’s initiative, called Mobilize Jobs, has filled housekeeping vacancies in places like Fort McMurray and the Yukon by pitching them as a great Canadian adventure. They also provide youth with social support and arrange for on-the-job training from employers.

Now, they are looking to expand into agriculture.

But many employers contend that no matter how hard they try to mechanize tasks or find new hires, labour shortages persist.

Some of those most affected are in the agri-food business, where a lack of hands on farms and processing facilities cost the industry $1.5 billion in potential sales in 2014, according to the Canadian Agricultural Human Resources Council.

Meat packers are basically willing to give a job to anyone ready to try it.

“We have a full-time staff that travels around the country,” said Yonathan Negussie, human resources director at JBS Food Canada’s meat-packing plant in Brooks, Alta.

“You’ll find us in church basements and barber shops and community centres. You name it. Where people are looking for a job, we’ll be there.”

Too Much Lobster

Often, desperate employers are in places like Shediac, N.B., a lobster industry hub with a population of under 7,000.

A statue of an 11-metre-long lobster off the town’s Main Street pays tribute to the importance of the crustacean to the local economy.

In recent years, Shediac and other seaside communities in Atlantic Canada have seen record-breaking lobster landings. Much of the catch has been processed by hundreds of migrant workers who extract, cook and package lobster meat.

As the local workforce ages and young people leave for other parts of Canada, seafood processing companies say this foreign manpower is sorely needed.

“It’s not like we can store lobster in a shed,” said Nathanael Richard, director of corporate affairs at Westmorland Fisheries Ltd., one of the largest lobster processors in Canada.

Many of the processors’ workers were forced to leave in April 2015 because of the four-year limit on their stay in Canada. Companies also hired fewer of them because of the workforce caps.

The Shediac Lobster Shop in Shediac, N.B.
The Shediac Lobster Shop, a seafood processor in Shediac, N.B., has turned to the temporary foreign worker program to fill labour shortages, but has struggled to get as many workers as it needs since reforms in 2014. (Alia Dharssi/Postmedia)

These restrictions make little sense to Lana Desruisseau, human resources manager at the Shediac Lobster Shop Ltd.

The average Canadian worker at the company is around 56 or 57 years old and will soon retire, she explained.

The Lobster Shop’s efforts to recruit younger Canadians — including weekly ads in local papers, social media postings, career fairs, a summer program for international students and a bus that shuttles in employees from Moncton — have had limited success, she said.

It struggles to find staff, even though that region of New Brunswick has a 15 per cent unemployment rate.

Many of the Canadians the seafood processors do succeed in hiring soon quit the demanding jobs within weeks or days.

“It’s wet and cold,” said Bill Langdon, plant manager at Fisherman’s Market, a processor in Nova Scotia. “It’s long hours. You’re not dry, warm and clean all day.”

In P.E.I., plants handling lobster, mussels, salmon and other seafood had to let trained workers go in April 2015 and pay to bring in new ones who were less efficient, said Dennis King, executive director of the P.E.I. Seafood Processors Association.

With fewer hands on the processing floor, lobster processors have been forced to tell fishermen to limit their daily catch and decrease production of profitable value-added products.

Other employers shifted work to the U.S.

Paturel Seafoods, a plant based on a New Brunswick island that can only be accessed by ferry, moved some processing to Maine, said general manager Stuart McKay.

In February, the seafood processors did get a temporary reprieve, when the labour minister granted companies permission to hire unlimited seasonal TFWs for up to 180 days this year.

In addition, in June, the government froze caps on the proportion of TFWs companies could have as part of their workforce, instead of lowering them, for those that had been using the program for more than two years.

But processors will miss out on hundreds of millions in sales if the problem isn’t permanently solved, according to the Maritime Seafood Coalition, an advocacy group.

“It’s the biggest issue by far in our industry and the biggest impediment to our continued growth,” said Richard at Westmorland Fisheries in Cap-Pelé, N.B.

But it’s not only lower-skilled sectors that face shortages and issues.

Across the country, in a hip Vancouver office with a nap room and board game collection, Alysia MacInnes, faces similar problems.

MacInnes is the “people team lead” — also known as a human resources manager — for A Thinking Ape, a fast-growing mobile game company behind interactive games like Kingdoms at War and Smash Monsters.

The company has had to look outside Canada for specialized software engineers, but the processing time for Labour Market Impact Assessments needed to hire foreign workers slows down product development, said MacInnes.

In one case, the company had to wait six months — or eons in the digital gaming world.

“Our wrap-up time is quick,” said MacInnes, who describes access to the right engineers as the biggest barrier to growth. “We need them yesterday.”

Some tech companies also report losing candidates because of processing times for the labour market assessments, while Canadian talent is drawn away to Silicon Valley.

Industries, including tech companies, looking for well-educated temporary workers with several years of experience have a litany of complaints about the assessments they need to hire them.

For one, they don’t like publicly advertising salaries on job postings for these roles — a requirement of the assessments — and want the flexibility to offer outstanding foreigners more than what’s listed.

Right now, if they do so, they have to advertise the job all over again to prove they couldn’t find a Canadian candidate.

The process is time-consuming and expensive.

At Mobify, a Vancouver company that builds customized mobile shopping platforms, the human resources staff describe spending hours on each application.

In one case, they had to prove they needed a foreign worker by filling up a spreadsheet with a list of 200 applicants with explanations for why each was not qualified.

The federal government is looking at easing or eliminating the assessments for groups with proven labour shortages, but critics warn the pendulum should not swing too far the other way.

“Without that LMIA, there is no way to prove that a company is not hiring a temporary foreign worker just because they think it’s cheaper or easier,” said John Barlow, deputy Conservative critic for labour in Ottawa.

As for so-called “unskilled” industries, businesses want their workers to stay.

Meat packers, seafood processors and truckers, among other groups, have turned to provincial immigration programs to transition some TFWs to permanent residents.

The possibilities vary based on the province, industry and number of immigrants a province can nominate.

“We think about it more as a permanent solution,” said Scott Entz, general manager at Cargill Canada’s meat processing plant in High River, Alta., where the bulk of its workforce consists of former or current temporary foreign workers.

Dan Kelly, president of the Canadian Federation of Independent Business.
Dan Kelly, president of the Canadian Federation of Independent Business, says businesses turned to temporary foreign workers out of desperation. (File photo)

The Canadian Federation for Independent Business is also advocating for permanent residency for migrant workers.

Six out of 10 CFIB members that had hired TFWs credited the program for helping them stay open and keeping Canadian workers employed.

“One of the reasons business turned to the Temporary Foreign Worker Program was really out of desperation,” said CFIB president Dan Kelly.

In recent months, the immigration minister has said he favours a “pathway to permanent residency” for low-skilled workers.

Until the government gets the balance right on temporary foreign workers, some industries will struggle to grow.

In Trochu, Sunterra Farms’ pork plant sends 70 per cent of its products to Japan. Much of the rest goes to other East Asian countries, Mexico and the United States.

But it, along with other pork and beef producers in Alberta, will struggle to take advantage of new international trade deals.

Sunterra’s operations in Trochu have been short of 30 workers for two years — and it’s not getting any better.

“You’re having to make staff work longer hours and work on a Saturday and after a while that gets old,” Chambers concluded.

“We are not doing the best we could.”

A timeline of Canada’s temporary foreign worker program

1960s: Canada established migrant worker programs for seasonal agricultural workers and domestic workers.

1973:  The Non-Immigrant Employment Authorization Program, which would later come to be known as the Temporary Foreign Worker Program, was established. It focused on bringing high-skilled workers to Canada for temporary jobs.

2002:  The Chretien government introduced the Low-Skilled Pilot Project to the TFWP, which already included streams for seasonal workers and live-in caregivers, in response to requests from employers for access to low-skilled labour.

2009: Reports by the auditor general and a parliamentary committee on the TFWP were extremely critical and raised concerns about abuse of the program.

April 2011:  A rule that limited most foreign workers to four years in Canada, after which they cannot return for four years, came into effect.

2012: News broke that a B.C. mining project was planning to hire 200 miners from China and had listed Mandarin as a job requirement, a condition that disqualified thousands of unemployed local miners.

2013: CBC reported the Royal Bank of Canada had hired TFWs from India to replace IT support staff in Canada.

April 2014: It came to light McDonald’s franchises had allegedly denied Canadian workers jobs and shifts in favour of TFWs. The Harper government responded by placing a moratorium on the use of the TFWP by restaurants.

June 2014: The Harper government overhauled the Temporary Foreign Worker Program. The main changes included caps on the number of workers most businesses could have, restrictions on the use of TFWs by hospitality and retail and stricter penalties for breaking the rules. The government also raised the cost of labour market impact assessments, which employers used to prove that they can’t find Canadians for jobs going to migrant workers, from $275 to $1,000 and made the more rigorous.

Foreign workers who didn’t need a labour market assessment, such as inter-company transfers and youth on working holiday visas, were separated and regrouped into the International Mobility Program.

April 2015: Thousands of TFWs reached the four-year limit on their right to work in Canada. Many stayed. Thousands more TFWs have been affected by the rule since.

February 2016: the Liberal government granted an exemption on the TFWP caps to seasonal industries, enabling them to hire unlimited TFWs for 180 days.

May and June 2016: A parliamentary committee conducted a review of the TFWP, which is expected to be tabled in Parliament in September.

June 2016: The government announced that it would temporarily freeze the caps on how many TFWs companies could have before they were lowered in July.

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