Human Resources Committee on May 16th, 2016

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

I kind of wonder why nobody wants to go up there then to do that.

[Val Litwin]

Yes.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

That's what I keep coming back to. I know you've been working hard. I guess the question I'm going to keep coming back to is: how do we train the youth who we have living in Squamish, living in the neighbouring area, so that they become your long-term employees?

[Val Litwin]

We're in conversations with Quest University and the nations, and possibly both entities are looking at putting together a culinary school. We are looking to educational partnerships to figure out how we can get more education in the corridor for the positions we need.

To partially also answer your question, Squamish is going through a very tight labour market as well. They're experiencing very low unemployment, so we just can't draw from that market that we used to draw from in the same way any more.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Thank you for those.

Would you happen to know, if you were to go back 20 years, has your use of temporary foreign workers gone up, down, or stayed the same?

[Val Litwin]

In Whistler since 2010 up to 2014, I'll read out the number of temporary foreign workers according to Stats Canada: 260 in 2010, 140 in 2011, 125 in 2012, 147 in 2013, and 106 in 2014. It shows a downward trend with a couple of little blips in between.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

What are the costs incurred in hiring temporary foreign workers in comparison to attracting and retaining locally? How do they compare?

[Val Litwin]

Hiring a Canadian versus hiring a temporary foreign worker, is that essentially the question? Yes.

What I hear from my members is that they would far prefer to hire a Canadian. It is easier and cheaper.

As I was saying, 93% of my members are small businesses. They are the backbone of the resort. Many of them are in the food and beverage industry, or retail. They have three to four, maybe five staff. To go out there and try to bring on three or four temporary foreign workers to work in a café, $4,000 in LMIA applications, for a small business that's a marketing budget for an entire year.

We would far prefer to hire, attract, and retain Canadians.

[The Chair, Liberal, Bryan May]

Thank you all very much for appearing before this committee and bringing your breadth of knowledge on this particular issue. I know some of you have come from afar to be here and this committee appreciates that commitment to this particular issue.

We do have a lot to do with this study. This is going to be a very intense study and I'm very pleased at the witness list we've seen.

Thank you all for starting us off in the right direction. We appreciate it.

We're going to break for about five minutes, so we can switch over and get the new panel on video with us.

[The Chair, Liberal, Bryan May]

Good afternoon everybody. We're coming back for the second panel today.

We have a few people via Skype as well as one in-house who is feeling very lonely down there.

First, from the Coalition for Migrant Workers Rights Canada, we have Gabriel Allahdua and Gina Bahiwal.

We also have via Skype video conference, from Coast Spas Manufacturing Inc., Jatinder Sidhu, executive vice-president.

We have, in-house, from the Entertainment Software Association of Canada, Jayson Hilchie, president and chief executive officer.

Welcome to all.

Since we have the video conference working, we're going to go to the presentations from the witnesses via video conference first.

I understand both Gabriel and Gina are going to split their time. I believe we have Gina going first. You're going to split your time and you have a total of seven minutes.

Please, go ahead.

[Gina Bahiwal, Member, Coalition for Migrant Worker Rights Canada]

I am Gina Bahiwal from the Philippines. I came to Canada in 2008 under the temporary foreign worker program, so I have been here for eight years. I worked as a vegetable packer for four years and moved to B.C. with the hope of getting permanent residency under the B.C. PNP. This only happened when I learned about the four-year rule, which was implemented in April 2011.

I had to pay a recruiter for the housekeeping job. While in B.C., I did not stop my advocacy work for migrant workers. I tried to help other migrant workers and I ended up losing my job. I had to pay another recruiter for my food and counter attendant job at a McDonald's restaurant in Hope, British Columbia.

Unfortunately, I did not meet the family income threshold, so my B.C. PNP application was denied.

The four-year rule is making us more vulnerable. Being here in Canada for four years or more, we have no life to go back to in our countries. We are separated from our families and most of us, migrant workers, have lost our families. One thing more, we don't have jobs to go back to.

We came with a closed work permit and we have to stick to our employers even when they are abusive. It is hard for us to get another job or a new job because of our closed work permit. Most employers are dependent on recruiters and we pay thousands to get employment.

Access to health care is a problem for migrant women and injured workers. Migrant women who get pregnant and fired from work do not have access to health care. Injured workers who are being sent home cannot access health care here in Canada.

I have been talking to many migrant workers across Canada and we are shouting the same thing. It's for status upon arrival. If other migrant workers, under the skilled category, have status upon arrival, then why can't we have that too?

They come here with their families. Why are we separated from our families?

Yet, all of us come here with the same purpose, to work and make the Canadian economy better.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now over to Gabriel.

[Gabriel Allahdua, Member, Coalition for Migrant Worker Rights Canada]

Thank you.

It is very hard for us to speak up when we have a bad employer or if we are not getting our full wages. Imagine how much harder it is when speaking up doesn't just mean losing your job, but it means being forced to leave the country. Imagine how hard it is when your employer controls your housing, and your contract is not enforceable.

What is worse is that employers know that, and bad bosses are pushing workers to work harder for less pay.

In my work with migrant farm workers there are 13 tall, wide, deep and huge dark sides of the program. I can only highlight a few of them because of the pressure of time.

One of them is that the occupational health and safety handbook of Ontario contains a lot of guidelines that came about as a result of several coroners' inquests into non-agricultural work-related deaths. To date not one has been carried out for migrant farm workers who have died in work-related accidents anywhere in Canada.

Migrant workers contribute consistently to EI every week. However, we can't access any of these benefits. The one we can access has been revised downwards in such a manner that whatever we are getting is next to nothing.

There are so many issues.

Ultimately, migrant workers are physically separated from their families and loved ones. This contributes to family breakdown of the migrant worker and a vicious cycle of poverty and social ills. Spending time with our families is more important than spending money on them. We cannot bring our families with us to Canada.

It is very clear that all of these conditions do not reflect a modern 21st century Canada. It does not reflect good jobs or jobs with good conditions, but a dark, artificial system seeking to perpetuate 18th-century working conditions.

Canada has been a developed country that prides itself as a place of safe refuge. Canada prides itself as a place of diversity and inclusiveness. Canada prides itself as a place where human rights are guaranteed to all. We call on this Canada today to grant fairness to all workers. We ask Canada to grant fairness to migrant workers because we deserve the same rights as every worker in Canada. We ask Canada today to grant migrant workers their opportunity and ability to unionize and bargain collectively. We ask Canada to grant migrant farm workers open work permits.

Ultimately, we ask Canada to grant migrant farm workers permanent status on arrival. Permanent status on arrival removes the differential treatment of migrant workers. It ensures equal access to health care and social protection, and being united with our families.

In a nutshell, this is our recommendation, but a more detailed list of recommendations will be submitted in writing to this most esteemed parliamentary committee.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

Now over to Mr. Sidhu. Seven minutes, please.

[Jatinder Sidhu, Executive Vice-President, Coast Spas Manufacturing Inc.]

Thank you, Mr. May.

Good afternoon.

My name is Jatinder Sidhu. I am the executive vice-president for Coast Spas, with corporate head offices in Langley, British Columbia.

I want to begin by thanking the honourable member of Parliament, Mr. Mark Warawa, of the Langley—Aldergrove area, and other honourable members of Parliament in attendance who have given us the opportunity to present and share with you our experiences regarding the federal government's temporary foreign worker program. I would like to share with you some background on Coast Spas.

Coast Spas is proud to deliver products in the wellness and home backyard industry. Our hot tub and spas deliver a world of experiences, improved health, and an environment that is meant to be shared with friends and family. We have been an innovator in the hot tub industry since our inception in 1997. Our factory operations are located in Langley, British Columbia, employing over 200 staff. Our worldwide sales operations spans around a group of 200 dealers in 40 countries. Coast Spas is the only hot tub manufacturer to have a prestigious ISO 9001:2008 quality management certification in Canada. We manufacture each and every hot tub with the finest workmanship. Our team of employees have been specifically chosen for their skills, enthusiasm, and the ability to work together effectively. We need great people to build a great product, and our employees are our most important asset.

To ensure our company’s continued growth, we do expect everyone to put in their best effort and to work as a team. In return, we commit to providing fair treatment, a safe and stimulating work environment, a competitive above-minimum wage compensation, a great health and extended benefits program, monthly BBQs, opportunity for improvement, bonuses, service awards for perfect attendance, and a productivity sharing bonus program. Recognizing that we are still a new industry, we hire, train, and guide individuals with the right craftsmanship and skills to provide our customers with the world's best built spas.

Coast Spas' experience with the temporary foreign worker program is as follows. Although the federal government's temporary foreign worker program has been in place for quite some time, Coast Spas was only able to use the program in 2007 and 2008. Since then we have been unable to obtain labour market opinion approvals to continue using this program, regardless of countless efforts on our part to contact Service Canada officials and other elected government officials at the federal level. On a couple of occasions, we even wrote to the Minister of Human Resources and Social Development in Canada, which did not result in any favourable outcome for Coast Spas.

The following are some of our concerns. Raising wages to $15 to $20 per hour would increase our cost of production and will force us to raise our hot tub prices. Ultimately we will no longer be competitive within the hot tub industry in North America or internationally.

The hot tub industry was born in southern California in the early 1970s. American manufacturers in the hot tub business are paying a starting wage of only $8 to $10 per hour. How can we compete with a manufacturer who is paying half the wages we are paying to our new workers in Canada? There are approximately 100 hot tub manufacturers worldwide, with the majority of them in southern California. Of those, fewer than 10 are Canadian. Coast Spas fully loaded weighted average wage rate for production workers in 2016 is over $20 per hour. This rate includes the base hourly wage rate, the cost of the health and extended benefits programs, and the earnings achieved over progressive work experience. It requires a level of competency for each worker to achieve this amount.

The starting wage rate for all entry-level positions with no experience is $12 an hour, and this is the same rate we have been seeking through the foreign worker program. The cost to provide MSP and other extended benefits program runs close to $5 per hour. In cases when hiring a worker with previous industry experience, we do make exceptions, and the starting wage is reflected accordingly to the competitive market rate.

It is important for you to know that we manufacture to orders received only. Hot tubs or spas as a finished product are expensive and take up a lot of space, which becomes limited during our peak season, which runs through the months of March until September. Coast Spas has been honoured and has the privilege of being one of Canada’s 50 best managed companies for six consecutive years, leading us to the platinum status award.

Yes, we are a leading manufacturer of quality hot tubs and spas, but operating manufacturing operations out of the west coast of Canada has been extremely challenging over the last 10-year period. We have ended every fiscal year in the red with fiscal losses. Why? It's because during our peak season of March to September, the full complement of production manpower has never been achieved due to local labour shortages in Langley, British Columbia, resulting in us not being able to fulfill customer orders within the acceptable industry lead time of two weeks from order placement.

Subsequently we have been forced to lengthen manufacturing lead times over the years to more than four weeks, resulting in customers not ordering the product from Coast Spas but rather from other manufacturers, in the U.S., who can deliver the product within two weeks. This has ultimately affected our business overall. It has been 30% lower, when compared year over year over the last five years.

Prior to the year 2006, Coast Spas employed more than 300 workers every year for the years 2003, 2004, and 2005. During the peak season, March to September, to fulfill customers' orders and to stay within acceptable manufacturing lead times, we were able to achieve our manufacturing goals; however, because of labour shortages, we have been unable to hire workers consistently since 2006 and were forced to look at the foreign worker program offered by the Government of Canada.

The following years, 2008 to 2010, were very disappointing for Coast Spas, as an application to obtain a labour market opinion was rejected. No worker was hired through the foreign worker program after that.

Over the years, and last year more specifically, we learned that not only were the terms and conditions of the foreign worker program changed, but now employers were being asked to submit a $1,000 Canadian per applicant non-refundable fee to Service Canada at the time of application—a whopping 100% increase over the last 10 years. The fee was non-refundable, should Service Canada reject the application.

So imagine: if we apply for 50 workers under the program, then our cost on the application submission date is $50,000. Should Service Canada reject the application, they keep all the money and we are now at a loss of $50,000.

Hiring good people to work has been very challenging over the last 10-year period. For Coast Spas, our annual attrition rate has been above 70% during this time.

[The Chair, Liberal, Bryan May]

Sir, if you could wrap up, that would be great. Make just two more points and then conclude, please.

[Jatinder Sidhu]

At this standing committee, look at how to reform the temporary foreign worker program. I feel, based on our experience working in several manufacturing sectors, that the following two corrective actions need to be addressed with urgency to stimulate and improve the hiring of workers in the Canadian manufacturing sector.

First. the labour market opinion evaluation process must be reviewed for prevailing wage rates, and it should be aligned with the specific industry economic indicators of costs incurred to build the product, thus falling within the profit margins. One example of such a program already existing in the Canadian manufacturing sector is the agricultural temporary foreign worker program. The government must do its part as a key stakeholder in the wage discrepancy.

Number two is, abolish the $1,000 Canadian labour market opinion fee. The manufacturing sector itself is very limited in B.C. Over the years, the so-called manufacturing hub that was once very prevalent in this great country of ours has been moved to Mexico and is growing by the day. Eighty percent of auto manufacturing has moved from Canada and the U.S. to Mexico, and more is moving tomorrow.

To improve the manufacturing sector, the federal government must engage itself to reform the temporary foreign worker program to create the element of relationship between itself and companies such as Coast Spas. If it fails to act in a timely manner, that could result in companies such as Coast Spas and many other companies in the manufacturing sector moving out of Canada to another more labour-friendly location, ultimately losing thousands of jobs in the Canadian manufacturing sector, involving suppliers, manufacturers, and other government organizations providing the support to the very same companies as us and many others.

I apologize for making this long explanation, but I hope my insight has been useful to the committee. At this time, if there are any questions, I would be more than happy to answer them.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

The final statement is from Mr. Hilchie, the president and chief executive officer from Entertainment Software Association of Canada.

Welcome, sir.

[Jayson Hilchie, President and Chief Executive Officer, Entertainment Software Association of Canada]

Thank you, Mr. Chairman and committee members, for your time.

My name is Jayson Hilchie. I'm the president and CEO of the Entertainment Software Association of Canada.

ESAC is the voice of the Canadian video game industry. We represent some of the biggest and most innovative companies making interactive digital entertainment in studios from coast to coast. Our members include global companies such as Ubisoft, Electronic Arts, Warner Brothers, Glu Mobile, and Nintendo, but also Canadian-owned independent developers such as Newfoundland's Other Ocean Interactive, Nova Scotia's Silverback Games, and Vancouver's Roadhouse Interactive.

I'm here with a very simple message. We need skilled workers today. We're asking you to recommend that the government establish a foreign worker program that welcomes in-demand, highly skilled technology workers to Canada and minimizes the barriers to their entry, which includes exempting them from a labour market assessment process and allowing our employers to go straight to the immigration department for a work permit.

The Canadian video game industry produces games that are sold and played all over the world. Canadian studios are responsible for developing some of the world's best games and franchises for consoles, computers, mobile devices, and soon virtual reality.

In order to compete with the rest of the world, we need the best, brightest, and most talented workers who are innovating around the globe to fill key positions in instances where we cannot find Canadians.

We pay our talented workers very well. The average salary in our sector is just over $71,000 per year, and our workforce is young, averaging 31 years of age.

Our industry is growing. Its contribution to GDP is now $3 billion a year. In the two years between 2013 and 2015, our industry grew by 24% in jobs and now employs well over 20,000 workers, making us one of the largest video game industries in the world.

In contrast, the United States, which is the world's largest industry, employs 41,000 workers and has ten times the population of this country.

In some ways we're victim of our own success and of the continual innovation that underpins video game development. While Canadian colleges and universities are training fantastic future employees for our industry, we need more than just new grads, and we are growing faster than our ability to develop intermediate and senior talent in a balanced way.

Because of this, finding experienced talent who can lead teams, impart knowledge and know-how, and help us innovate has become harder and harder. The capacity to hire, support, and train junior employees depends on a solid and experienced core team. Highly skilled, experienced foreign workers can fill leadership roles and help continuously upskill current Canadian talent through mentoring and by importing best practices in innovation.

Over the past six years, as our industry was growing, the inefficiency of the temporary foreign worker program has been a constant hurdle to our competitiveness and our efforts to invest in Canada's digital economy. In the next 12 to 24 months, our industry projects it will need to fill 1,400 intermediate and senior positions. Most of these jobs will be filled by Canadians and permanent residents already here, but in cases in which we cannot find Canadians, we will need to look abroad to fill those roles.

When we finally find the right candidate and need to begin the immigration process, we hit roadblocks and obstacles that often disrupt the company's day-to-day business and sometimes ultimately derail hiring the right talent.

Program officers at Service Canada do not consistently apply the rules across the offices and applications and do not fully understand the particularities of the new jobs we create. In some instances, the jobs we're now filling didn't exist two years ago and may not exist in two years' time.

The national occupation codes can't keep up with technology sectors that create new jobs to fill new needs, and because of this the government has insufficient labour market information to determine where the actual job shortages are.

The requirement for transition plans, while perhaps useful for some sectors, is not relevant to our industry and likely not relevant for most other technology industries. We hire top talent and innovators who wouldn't necessarily be found domestically. We pay them well, and many decide to stay in Canada.

Our workforce consists 13% of employees who have come through the temporary foreign worker program. We also know that one-third of those workers go on to become permanent residents. We believe this proportion could be even higher if the process to move from being a temporary worker to a permanent resident were easier, and if there were a clearer path to citizenship for those workers who wish to take it.

Let me be clear. There is no inherent advantage to hiring a worker from abroad. It costs more in recruitment, administration, salary, and relocation costs for the worker and their family.

It's a risky endeavour, the delays in processing, requirements for transition plans, and other onerous requirements lead to missed opportunities as desirable candidates get offered positions at other companies and in other countries where the entrance requirements for economic visas are more efficient.

Countries like the United Kingdom that offers work visas for occupations that the country deems important or that there is a shortage of, such as video game developers, can process work permits much more efficiently than Canada because these designated occupations do not require a labour market impact assessment, which is currently the primary issue causing the delays and uncertainty in the Canadian system.

To develop a world leading cluster of video game and other innovative technology companies and to further Canada's position in the digital economy we need frictionless access to the most talented workers in the world otherwise companies that might have invested in Canada will choose jurisdictions where they can access the talent that they need to grow.

Consequently, we urge this committee to recommend a return to the IT exemption from the temporary foreign worker program, which was abolished in 2010 and had exempted designated technology occupations from labour market impact assessment or to create a new stream for temporary foreign workers, which is better suited to the needs of technology industries like Canada's video game industry and offers a clearer path to residency and citizenship than the existing system.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

We're going to move to questions. Monsieur Deltell is first.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I want to welcome everybody. We appreciate having you here.

Mr. Chairman, we have extremes here. On the one hand you have people who work on farms and on the other you have high-tech personalities working for good wages.

Mr. Hilchie, I would like to talk about a timetable. What would the best timetable be for you?

When one of your businesses has a project and is trying to hire people, you told us that two years later this job will not be available because it will be too late.

[Jayson Hilchie]

The best timetable for us would be the recommendation that I stated in my opening remarks, which is to abolish the requirement for a labour market impact assessment for in-demand high-tech jobs where there is a demonstrable shortage. That would lower the timetable for us to be able to find somebody and bring them in to a job because right now that mechanism is causing all the problems.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Are we talking about a month, weeks, days?

[Jayson Hilchie]

Currently or in an ideal world?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Before and now; what you wish for.