Issue

Recently announced changes to the Temporary Foreign Worker Program (TWFP) are putting businesses in Canada and especially those in Alberta at risk. Announced changes slow down access to temporary foreign workers (TFWs). The changes suspend the Accelerated Labour Market Opinion (A-LMO) process and will require each application for a TFW to include a transition plan to replace the temporary workers with Canadian workers. The introduction of new user fees may also disadvantage and discourage applications to the program. These changes reflect intense regional pressures and put all Canadians into the same situation at a time when the economic climate across provinces varies greatly. 

Background

On April 29, 2013, the federal government announced changes to the TFWP which reduces its flexibility, increases the wait times, and adds costs for employers. These changes to the program appear to be in response to increasing pressure from provinces which currently face high unemployment. The TFWP is designed to ensure that any positions for which TFWs are requested are offered to Canadian workers first. Given the design of the program, changes made by the government are unnecessary to ensure that Canadians are given priority to fill these positions. However, the program does not appear to have been managed in such a way as to deliver the intended objective.

At the provincial level, Alberta’s economy has been one of the strongest in terms of economic growth (with a GDP growth of 3.9% in 2012) and has one of the lowest unemployment rates in the country.¹ These changes to the TWFP will have a strong negative impact on the Alberta economy which is increasingly reliant on this source of labour in the midst of a growing labour shortage. 

Between 2008 and 2012 the amount of TFWs in Alberta increased by 18% to a total of 68,139. This figure is dwarfed by Ontario’s increase of 32% to 119,899 and British Columbia’s increase of 28% to 74,216. Meanwhile, the amount of TFWs in Quebec increased by 70% to 44,115 over the same period. Despite this modest growth in the use of TFWs, Alberta continues to face a growing need for labour. It is estimated that Alberta currently lacks about 30,000 workers; by 2021 this number is expected to reach approximately 114,000.² The following table illustrates the distribution of TFWs across the country in December 2008 and December 2012 and highlights the unemployment rate in April 2013.

TFWs and Unemployment, by province or territory ^3,4 

From this table, one can clearly see that the greatest growth in the use of TFWs has been in some of the provinces with significant unemployment. 

Despite the challenge of growing labour and skill shortages that Alberta is faced with, the growth in the use of TFWs has been at 17% less than the national average, possibly reflecting high costs of using TFWs in Alberta. 

Revisions to labour policies in Canada should reflect the varied economic climate across the provinces. Restrictions on TFWPs may be more merited in provinces where plenty of labour is available (for example, Ontario and Quebec have an unemployment rate of 7.7 and 7.8 percent, respectively, with a combined total of over 910,000 unemployed workers)⁵ . A principle of regional variation and appropriate policy is applicable and warranted with all immigration policy, not only TFWs. 

Of the changes announced on April 29, three major changes to the TFWP are of particular concern. 

1. Suspending Accelerated Labour Market Opinions 

When introduced in September 2012, the A-LMO option significantly shortened the process and waiting period to apply and be approved for TFWs, allowing trusted and proven employers to bring in much needed workers quickly and efficiently. 

The sudden suspension of the A-LMO has created instability for Alberta business which has learned to rely on this effective program. Businesses in Alberta must, now, potentially wait months for approval to even begin the long process of seeking, securing and retaining the workforce they need just to keep their doors open. 

Although the A-LMO suspension is “temporary,” business has no idea how long this suspension will be in effect. 

The suspension and consultation period will undoubtedly slow down the regular LMO process even more. 

2. Transition plan requirement

A new stipulation of the LMO process will require businesses to submit a plan to transition to a domestic workforce “over time.” 

The transition plan requirement does not recognize the reality that Alberta needs TFWs due to its changing demographics, growing labour shortages and chronically low unemployment. 

Creating a transition plan creates unnecessary and additional work for business. It will particularly affect small business owners who do not have human resources personnel to assist with the additional workload.

It is already in the interest of business to transition to a domestic workforce. Hiring TFWs is a much more costly and time-consuming process than hiring domestic workers. Businesses only use this program as a stop-gap in light of insufficient labour. 

3. User fees for LMOs and increased cost of work permits 

The Government of Canada will introduce an LMO user fee to ensure taxpayers are not subsidizing the cost of administering the TFW process. It will also increase the cost of work permits for the same reason. 

Business understands the philosophy behind user fees but these should truly reflect administrative cost; they should not be set to a level that purposefully discourages businesses from applying for TFWs. 

New fees and increases to existing costs have the greatest impact on small business. There are already many costs and additional requirements associated with hiring TFWs; only businesses that truly need to recruit internationally will take this route. Special measures to dissuade business from using the program are unnecessary, and show a lack of federal understanding for Alberta’s chronic and debilitating shortage of labour

Recommendations

The Alberta Chamber of Commerce recommends that the Government of Canada:

1. Immediately restart the Accelerated Labour Market Opinion process to prevent a needless and costly slowdown of Alberta’s economy. 
2. Eliminate the proposal to make the transition plan a part of the LMO process. 
3. Ensure that the new user fees and work permit fee increases accurately reflect the cost of administering the TFWP. 
4. Does not use fees as means of discouraging business from accessing the program. 
5. Increase communications and awareness about the TFWP to help Canadians realize its importance to Canadian economic growth. 
6. Develop a program of regional flexibilities in the federal immigration policy that would allow the Government to respond to the realities of the availability of labour and the performance of the economy in provincial and territorial jurisdictions. 
7. Work with the provincial government on changes to the TFWP, that would take into account the specific needs of the individual provinces.

Resources

1. RBC Economics. (2013) Provincial Outlook Update, Retrieved from http://www.rbc.com/economics/market/pdf/provupd2013.pdf on May 23, 2013
2. Government of Alberta. (2011). Alberta’s Occupational Demand and Supply Outlook (2011 – 2021). Alberta Enterprise and Advanced Education. Retrieved from http://eae.alberta.ca/documents/occupational-demand-andsupply-outlook.pdf on May 21, 2013 
3. Government of Canada. (2013). Canada – Temporary foreign workers present on December 1st by province or territory and urban area, 2008 – 2012. Citizenship and Immigration Canada. Retrieved from http://www.cic.gc.ca/english/resources/statistics/facts2012-preliminary/04.asp on May 27, 2013 
4. Government of Canada. (2013). Labour force characteristics, seasonally adjusted, by province (monthly). Statistics Canada. Retrieved from http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/lfss01b-eng.htm on May 21, 2013 
5. ibid