MLI Senior Fellow Linda Nazareth argues that complaints about abuses to the temporary foreign worker program have overshadowed the benefits for business – and the wider Canadian economy

OTTAWA, May 22, 2014 – A fully engaged Canadian economy needs a program that allows businesses to relieve labour shortages by hiring foreign workers, economist Linda Nazareth says in the latest instalment of MLI’s Straight Talk series of Q&As.

Nazareth, MLI’s senior fellow for economics and population change, argues that noise about abuses in the temporary foreign worker (TFW) program has drowned out the benefits it brings to the Canadian economy.

“If there are abuses, they should be fixed”, Nazareth tells MLI. “But we should also be open to making changes that would make it easier to get more people in place so as to get Canada operating at its highest possible productivity level.”

The federal government is now reevaluating the program, which allows businesses to apply to bring in foreign workers if they can show that there aren’t enough domestic employees for hire, after a string of complaints claiming that it is freezing Canadians out of jobs. Most recently, the government placed a moratorium that temporarily prevents those in the restaurant industry from making use of the TFW program.

Nazareth says this side of the debate has overshadowed what is a real issue for Canadian businesses: finding enough skilled workers to allow them to run profitable operations.

“If you cannot operate a business at full capacity because of a lack of workers, you cannot operate the economy at full capacity”, says Nazareth. “And industry survey after industry survey shows that employers are finding it difficult to get the right workers”.

Nazareth cites information technology industry as one sector that particularly needs the TFW program. That sector currently has an employment rate of between two and three per cent, she says, which essentially means there aren’t that many Canadians who are still looking for work in the field. She says attempts to “force” them into hiring domestic workers will ultimately backfire because firms that can’t find enough skilled employees here will move their operations to other countries like the United States – and take whatever Canadian workers they have with them.

“The next decade or so is going to be a challenging one for Canada, and we need to put labour market policies in place that will best serve the economy”, she says.

As with other entries into its Straight Talk series, MLI has drawn three recommendations from its interview with Nazareth:

  1. Policy makers should keep in mind that the point of TFWs is to get labour where it is needed quickly. Suspending the Accelerated Labour Market Opinion, which allows companies to bring foreign workers into Canada more quickly, or putting financial roadblocks in front of making use of the program runs contrary to that goal.
  2. Concentrate on implementing measures that will fix any abuses of temporary foreign workers or Canadians in the workplace, while preserving a program that serves an important need for business.
  3. Pay particular care not to adversely affect employers requiring high-skilled workers in IT, natural resources or other areas of serious short-term need, and keep in mind that the choice for them may not be hiring more Canadian workers, but going out of business or leaving the country, which would be detrimental to the Canadian economy and employment rates.

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Linda Nazareth is a senior fellow for economics and population change at the Macdonald-Laurier Institute. She is the author of several books on economics, the most recent of which is titled Economorphics.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

For more information, please contact Mark Brownlee, communications manager, at 613-482-8327 x. 105 or email at mark.brownlee@macdonaldlaurier.ca. On Twitter @MLInstitute

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