Modern Slavery and Canada’s Workforce
Canada's economy is unique in that it is built upon a diverse set of abilities, philosophies, and cultures. Globalization and trade have unlocked a plethora of untapped expertise and ability. Utilizing diverse workers from around the world is the key to advancing the economy. However, Canada has failed to employ foreign workers effectively. Canada's temporary foreign worker program and its expansion failed due to a lack of protections and safeguards to protect both Canadian and foreign workers from the misuse of the system. These failures drive unemployment and have led to the exploitation of vulnerable foreign workers looking to work In Canada.
In order to employ temporary foreign workers, Canadian businesses must complete a positive labour market impact assessment (LMIA). This report, as named, must prove that hiring a temporary foreign worker in place of a Canadian will positively or have a neutral impact on the Canadian labour market and that there are no Canadians available to do the job. LMIA applications are divided into a high-wage stream and a low-wage stream. Applications are sorted based on the position's wage relative to a provincial or territorial wage threshold. Following a positive LMIA approval from Employment and Social Development Canada (EDSC), a foreign worker can apply for a work permit once they receive a job offer and contract.
In theory, the fundamental function of the temporary foreign worker (TFW) program is to fill jobs that Canadians cannot. However, the truth is that firms abuse the program to minimize labour costs. The temporary foreign worker program in its current state significantly impacts Canadians searching for work while taking advantage of the foreign workforce.
The Current State of the Temporary Foreign Worker Program
Canada's temporary foreign worker program has increased approvals by almost 80% in the past two years. Following the significant job losses during the COVID-19 pandemic, the Canadian parliament expanded the TFW program in the wake of the 372,000 job vacancies in Ontario alone in the third quarter of 2022. Between 2022 and 2023, 462,493 TFW applications were approved. Analytics suggest that 2024 would add 74 thousand approvals.
The influx of TFWs has led to several instances of the exploitation of foreign workers. The TFW program makes foreign workers dependent on their employers. If they lose their job or quit, they lose their work permit and are deported to their home countries.
The power dynamic between a firm with all the cards and a helpless foreign employee who has no choice but to accept the hours, pay and treatment given to them in fear of deportation is the modern equivalent of slavery. UN officials have addressed the state of Canada's TFW program, stating that it is a "breeding ground for contemporary forms of slavery." When questioned about the protection of TFWs in the program, immigration minister Marc Miller publicly refuted the UN report, stating, "We cannot speculate on future policies. All new policies will be announced publicly," a spokesperson said in an email." Even under international scrutiny, the parliament fails to take accountability and make changes to protect foreign workers.
The UN's report on the state of the temporary foreign worker program was not the first of its kind. Before the program's expansion in December of 2021, Auditor General Karen Hogan released a report to the House of Commons that identified "significant problems in the quality and rigor of these inspections conducted to verify whether employers followed requirements put in place to protect temporary foreign workers." As auditor general, Karen Hogan has publicly called for the government to address the mishandling of the temporary foreign worker program, yet fundamental changes have yet to be made.
Evaluating the Necessity of the Temporary Foreign Worker Program
While the TFW program was initially expanded to manage the employment shortage caused by the aftermath of the pandemic, it continues to increase worker approvals while job vacancies decrease and unemployment increases.
Canadian firms look towards foreign labour because of the cost-benefit of hiring temporary foreign workers. In the current state of the temporary foreign worker program, Canadian firms are using cheap foreign labour in place of the rising standards of the Canadian labour market. Following the COVID-19 pandemic, the unemployment rate has increased from just over 5 percent to more than six and a half. This increase aligns perfectly with EDSC's move to scale the TFW program.
In 2022, Ontario faced a large number of job vacancies. As the number of approved LMIAs increased, the inflow of temporary foreign workers and job vacancies declined, but at the same time, unemployment rates increased. Specifically, young Canadians bear the burden as unemployment between the ages of 15 and 24 Increased from 10.7 percent to 14.5 percent in the last year. Instead of filling jobs that could not be done by Canadians, temporary foreign workers are being used in place of Canadians, driving unemployment. While TFWs are not the sole cause of Canada's rising unemployment, the program's current state allows firms to cut costs by importing labour instead of paying a fair wage and utilizing the Canadian labour force.
Currently, the temporary foreign worker program is being misused in a gross way. Firms are taking advantage of desperate foreign workers, with the treatment of TFWs being compared to slavery. The statistics show that in the current state of the economy, the TFW program is not needed to the extent it was back in 2022. As unemployment rises, the use of temporary foreign work continues to become less practical.
Reviewing Recent Government Changes to the Program
In August of 2024, ESDC announced amendments to the program which consisted of:
Instant refusal of LMIAs in metropolitan areas with an unemployment rate of 6% or higher.
The enforced cap of 10% of a company's total workforce consists of temporary foreign workers.
Maximum duration of employment reduced to one year (previously 2 years) for low-wage temporary foreign workers.
In October, ESDC announced further changes surrounding the increase in hourly wages of 20% for high-wage temporary foreign workers based on the median wage of the applicable province or territory. Additionally, stricter regulations of business legitimacy were announced with the goal of "[monitoring] for misuse and fraud."
EDSC's changes to limit the impact of TFWs on wages and unemployment have yet to be proven. However, it is a strong indication of the program's future direction. The changes move the program in the right direction in terms of mitigating the program's effect on unemployment. However, the EDSC fails to develop protections for the treatment of TFWs and hold firms accountable for the misuse of the program despite numerous criticisms highlighting the injustices and abuse taking place at all levels of the programs.
ESDC must take accountability and implement a strict policy on signing job offers with defined work hours, communication standards, expectations, and pay structures for temporary foreign workers. Secondly, LMIA approvals, job offers, and working conditions must be adequately regulated and monitored throughout the system. Instead of sweeping criticism under the rug, ESDC needs to monitor and assess the implementation of new policies, make adjustments where needed and, most importantly, maintain standards by issuing fines and repercussions for firms who fail to uphold standards set by ESDC. Finally, to support at-risk workers, ESDC needs to develop a support system for workers who are being mistreated and abused. An effective support system is crucial in ensuring the fair treatment of foreign workers and managing abuse of the system. These changes are all designed to protect and support temporary foreign workers coming to Canada.
The Future of Temporary Foreign Workers
Canada's decision to expand the foreign temporary worker program was not thought out before it was implemented. The program's lack of infrastructure and support has made Canadian and foreign workers pay the price. The government's updates to the program are designed to combat unemployment, but in reality, they are merely a band-aid on the damage the mishandling of this program has done. There is a case for foreign workers to fill roles that Canadians cannot; however, accommodations and support systems need to be implemented for the program to be successful.
Canada is a country built on diversity. As a country, we thrive on unique ideas, skills, abilities and cultures. Foreign work is an excellent way to leverage diversity and push Canada towards a global economy. However, the injustice that is taking place within the temporary foreign worker program, alongside its effect on unemployment, has set the country back. However, by thoroughly defining temporary foreign worker roles, monitoring and adjusting policy and creating support for workers, the Canadian economy can maximize the advantages of globally diverse work and build on the country's 157-year legacy of diversity.