Finance Committee on May 14th, 2014

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Where we seem to run into a problem is with the labour market opinions and how those labour market opinions are derived. I don't think anyone is arguing that employers who abuse the system should not be penalized; I think we're all in agreement on that here. But I think the challenge is to find a way to streamline the immigration system so that you can actually get immigrants who want to come here, be Canadian citizens, and work at specific trades and skills, versus the temporary foreign workers for non-skilled jobs. That's a balance that everyone struggles with.

[Dr. Dominique Gross]

Yes, that's because the difference is basically that Canada is traditionally a settlement country, so it's people who desire to come and live in Canada and bring in their skills.... The temporary foreign worker program is a program that exists through the demand for labour, so it's a totally different starting point.

Of course, there are possibilities to improve the settlement immigration process to better match the needs of the businesses in Canada, but again, this requires information.

[The Chair, Conservative, James Rajotte]

Merci.

Thank you, Mr. Keddy.

Mr. Caron has the floor.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

I would like to thank all of the witnesses who appeared before us this afternoon. Unfortunately, my time is limited, so most of my questions are for Ms. Gross.

According to your presentation and your report for the C. D. Howe Institute, it is clear that adequate information about the labour market is absolutely vital to the success of the temporary foreign worker program. But that is not what we have right now.

This is 2014. Canada is one of the richest countries on the planet. We have all of the advanced technology we need to collect information about this, compile it, analyze it and synthesize it. Even so, we still do not have adequate information on the subject.

Why is that so? What can the federal government do to resolve this issue as quickly as possible?

[Dr. Dominique Gross]

One of the short-term options is to increase Statistics Canada's budget so that it can carry out more in-depth surveys of labour market needs and other surveys as well. Such surveys would include questions about the ability of businesses to find people to fill vacancies.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In your report, there is a section about how program policies changed between 2002 and 2013. I will read what it says about that in English:

Furthermore, these policy changes occurred even though there was little empirical evidence of shortages in many occupations. As a result, controlling for different responses to shocks across provinces and other contemporaneous changes, I find that these modifications to the TFWP actually accelerated the rise in unemployment rates in Alberta and British Columbia.

In short, the way the policy was applied over at least the past 11 years had a direct impact on the labour market and on employment.

Can you comment further on that?

[Dr. Dominique Gross]

My analysis covered the implementation of the pilot program in Alberta and British Columbia. The program reduced the processing time for approvals from five months to five days. For businesses, that drastically reduced the waiting time for access to foreign workers and the cost. There was a list of specific jobs for which employers could get authorization in five days instead of five months.

In my analysis of those jobs, I found that local workers were affected and unemployment rose. The unemployment rate for those jobs was around 6% or 7%. There was another group of jobs for which the unemployment rate was 11%. That is a little strange because the fact that there was 11% unemployment in a group of jobs clearly indicates that there were Canadian workers available. Nevertheless, a list of those jobs was drawn up, and employers had speedy access to foreign workers. The impact on unemployed workers was quite drastic.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

You have just laid out part of the crux of the problem with the temporary foreign worker program. I would like to quote another of your conclusions:

Labour shortages can result from workers being discouraged from looking for jobs or not considering some jobs because of low pay....

Clearly, this program encourages companies to compare what they would have to pay a Canadian employee with what they can pay a temporary foreign worker.

We have a labour market situation where employers cannot find Canadian workers at the rates they're offering. Instead of offering to pay more, these employers waste no time saying that they have fulfilled all of the conditions and that they absolutely need foreign workers even though they have not done all of the searching they are supposed to or taken all of the steps to fill those vacancies, many of them permanent, with skilled Canadian workers.

Is that an accurate summary of the situation?

[Dr. Dominique Gross]

Yes, that's exactly right. It's because there are no incentives to raise wages to attract local workers.

That is also why, in my C. D. Howe Institute report, I just mentioned one option. Another would be to impose very high hiring fees for temporary foreign workers, which is what most countries do. If it becomes costly from an administrative point of view to hire foreign workers, employers will have a greater incentive to raise wages to attract Canadian workers.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In the end, because Canadian workers were unable to apply for the jobs that were filled by temporary foreign workers, the unemployment rate didn't change. The same people remained unemployed because they were unable to apply for those jobs.

[Dr. Dominique Gross]

Yes. Maybe those people need some more training to fill those vacancies. They won't invest in training only to earn a low wage.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Caron.

Colleagues, we will be showing up in about 15 minutes for the vote, so I'm going to recommend that we end the committee meeting now and head over to the House.

I want to thank all of our witnesses very much for being here today and for contributing to our study. If you have anything further for the committee to consider, please do submit it to the clerk. We will ensure that all members get it.

Thanks to everyone.

The meeting is adjourned.