Quick-to-read HR news & insights
From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.
Canada is changing some of the rules of its Temporary Foreign Worker Program, just two years after the program was expanded.
Where in the world? The Temporary Foreign Worker Program began in 1973 as a way for employers to hire foreign workers for low-skill jobs.
As Canada’s economy recovered from the initial impact of the pandemic in 2021, employers struggled to fill vacancies, and in 2022, Prime Minister Trudeau expanded the program. Employers in high-demand industries such as manufacturing and hospitality were allowed to fill up to 30% of positions with foreign workers, a 20% increase. The number of workers allowed into the country under the program has nearly doubled, allowing 240,000 people in 2023, compared to 133,000 in 2021.
However, while employers must submit a labor market impact assessment that proves to the government that it couldn’t find a domestic worker to fill the role, some critics believe that employers are overusing the program in its low-wage stream, where temporary employees are paid below the local median.
The unemployment rate in Canada recently reached 6.4%, and the youth unemployment rate sits at 13.5%. Some are concerned that the program hurts wages and could strain the tightening labor market, Bloomberg reported.
While the program can benefit employers who can’t find Canadian workers, some labor advocates believe some employers use it to exploit foreign workers and coerce workers to remain in unsafe working conditions.
Randy Boissonnault, Canada’s employment minister, said he is restricting the program in response to changing employment situations and potential program abuses. Employers will now be subject to more strict guidelines and oversight.
“These workers will put up with almost anything because they’re desperate to make this transition. They have much lower rates of absenteeism. They accept lower wages,” Mikal Skuterud, a labor economics professor at the University of Waterloo, told Bloomberg. “From an employer’s point of view, this is huge profits that can be made off the backs of these workers.”
Satellite view. New Zealand and Australia have also made changes to their foreign worker visa programs after both countries experienced an influx of workers, HR Brew previously reported.
In the US, many industries are dependent on low-paid foreign labor, which some economists warn is “stifling productivity growth and helping businesses delay the search for more sustainable solutions to labor shortages,” the Wall Street Journal reported.
“We would not have an economy, in Maine or in the US if we did not have highly skilled labor that comes from outside of this country,” Jenni Tilton-Flood, a partner at Flood Brothers dairy farm, told the AP. “Every single thing that affects the American economy is driven by and will only be saved by accepting immigrant labor.”