Human Resources Committee on Sept. 28th, 2017

[The Chair, Liberal, Bryan May]

Good afternoon, everybody. My apologies for the tardiness. I was listening to the Honourable Judy Foote give a very emotional speech in the House today. We wish her all the best in her future endeavours, and we will be lesser for having lost her in this House moving forward. I would like to get going right away.

First of all, welcome to MP Alexandre Boulerice. Are you going to be with us for a while, or just for today?

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Just for today, sorry.

[The Chair, Liberal, Bryan May]

I was excited there for a moment. Welcome, and thank you. We're happy to have you here.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, June 8, 2017, the committee is meeting for a briefing session in relation to report five, “Temporary Foreign Worker Program—Employment and Social Development”, of the 2017 Spring Reports of the Auditor General of Canada. The text of the motion was adopted by the committee.

It is an honour and a privilege to have you here, sir. I believe we're going to turn the floor over to you. Take what time you need, sir.

[Michael Ferguson, Auditor General of Canada, Office of the Auditor General]

Thank you.

Mr. Chair, thank you for this opportunity to present the results of our audit of the temporary foreign worker program, which is managed by Employment and Social Development Canada. Our audit report was tabled in Parliament in spring 2017. Joining me at the table is Glenn Wheeler, the principal who was responsible for the audit.

The temporary foreign worker program is meant to help employers fill job vacancies when qualified Canadians are not available. Employment and Social Development Canada is supposed to make sure that employers use the program to respond only to real labour shortages.

Our audit focused on whether the department managed the program to allow employers to hire foreign workers on a temporary basis to fill labour shortages only when qualified Canadians were not available. The audit also focused on whether the department ensured that employers complied with program requirements. In addition, we assessed how well the department implemented the reforms that the federal government announced in June 2014.

I should note that since the work for this audit ended in August 2016, I cannot comment on actions that the department has taken since then.

Overall, the reforms introduced in 2014 contributed to a reduction in the number of temporary foreign workers. However, the department's implementation of these reforms did not ensure that employers hired temporary foreign workers only as a last resort.

For example, in many cases, the department just took the word of employers that they could not find Canadian staff. The department also did not consider sufficient labour market information to determine whether Canadians could fill jobs. We found cases in certain sectors—primarily caregivers and fish and seafood processing plants—in which the department should have better questioned whether temporary foreign workers were filling real labour shortages. In particular, there were indications that unemployed Canadians who last worked in fish and seafood processing plants may have been available for work.

In addition, the department committed to requiring employers to demonstrate that they had tried to fill low-wage positions by recruiting from under-represented groups. In the files we reviewed to which this commitment applied, 65% of employers had not made adequate efforts to appeal to under-represented groups before requesting temporary foreign workers. Nevertheless, the department approved most of these applications. For example, program officers approved applications for temporary foreign workers in some fish and seafood processing plants located near first nations communities, even when no efforts to recruit from these communities were found on file.

We also found that the department had increased its enforcement activities since announcing the program reforms. However, it did not use the information it had to focus its activities on employers of the most vulnerable workers or on employers that were most at risk of not complying with the program.

As well, most enforcement activities consisted of reviewing documents that employers were asked to provide to investigators by mail. The department conducted few onsite inspections and face-to-face interviews with employers or temporary foreign workers.

Finally, we found that the department did not measure the results or impact of the program and did not know what impact the program had on the labour market. Appropriate analysis of results and impacts could have helped the department understand the underlying reasons why, for example, Canadians did not appear willing to take some of the jobs that temporary foreign workers eventually filled.

We are pleased to report that the department has agreed with our recommendations and has prepared an action plan to address them.

Mr. Chair, this concludes my opening remarks.

We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much, sir. I appreciate that.

Who is up first, gentlemen and ladies?

[The Honourable Steven Blaney, Conservative, Steven Blaney]

Ladies first.

[The Chair, Liberal, Bryan May]

Madam Wong, please.

[Alice Wong, Conservative, Richmond Centre, BC]

Thank you very much to our witnesses for a very detailed report.

The file of temporary foreign workers has been looked at in many different ways. Where do we go from here? You suggested an action plan, because the department admits all these findings. They also agreed to propose an action plan. What do you think of the timeline for these action plans? How fast should the government move with that action plan?

[Michael Ferguson]

The action plan I referred to was an action plan that the department prepared and tabled with the public accounts committee, so it is a public action plan.

The thing that may be of interest to this committee is that a couple of the dates in their action plan have already gone by, so they should have already put some of those things in place. For example, they said they agreed with the recommendation that we made in paragraph 5.41 of our report, which was that they “should review current policies, guidance, and processes to identify opportunities to strengthen the assessment of employers’ recruitment efforts” and that they “should ensure that Temporary Foreign Worker Program officers can more fully verify the accuracy of employers’ statements and that employers use the program only as a last resort.”

They put together their response, and they said their expected completion date for that was August 2017.

Again, I can't tell you whether they have or haven't done that. I can tell you that they have an action plan and they have specific dates outlined in there. Some of those dates have already gone by or soon will be coming up, so I think there is information in there for you to find out from the department at some point exactly what they have done in living up to that action plan.

[Alice Wong, Conservative, Richmond Centre, BC]

Thank you very much. This is exactly the kind of question we like to ask. How do we move forward? You also mentioned several other ideas.

I recognize that the focus of the audit was on the previous reforms that were made, but was any part of this new strategy examined during the audit?

[Michael Ferguson]

The audit period we looked at was from January 1, 2013, until August 31, 2016. That was the period of time that was covered by the audit. We based the audit on the reforms that were put in place in 2014. I think perhaps it's also important for me to say that, when we do an audit, we go in to see what the department itself has said it has to do, what procedures it has put in place, and then we audit to see whether it has lived up to those procedures. We were not questioning any of the aspects of the policy or the program as it existed at that time. We were just looking at how the department had actually implemented primarily those reforms that were brought in, in 2014, to see whether it had actually implemented what it said it was going to implement.

[Alice Wong, Conservative, Richmond Centre, BC]

Thank you very much for your answer.

You also acknowledged in your report that it was not an audit of Immigration, Refugees and Citizenship Canada or the Canada Border Services Agency, both of which execute certain aspects of this program. Do you intend to audit these groups in the future?

[Michael Ferguson]

Certainly we've done a number of audits in those organizations, although not on the temporary foreign worker program or their role in the temporary foreign worker program. Again, our normal path on an audit is that we do an audit, we make some recommendations, the department says what it's going to do about them, and then we may come back in a couple of years to see whether it has done what it said it was going to do. At that point in time, we might also decide to expand the scope of the audit to include other departments that are included in it, but we haven't made that decision yet.

[Alice Wong, Conservative, Richmond Centre, BC]

Thank you very much.

You also mentioned the aquaculture industry on the west coast, where I come from. We're starting to see that sometimes it utilizes the temporary foreign worker program. Also the food industry has been really criticized for stagnating wages, which you also allude to in the report. I'm wondering if there are certain industries that you would recommend be more closely monitored or if there are sectors that repeatedly have negative evaluations and maybe their eligibility should be revised altogether.

[Michael Ferguson]

I think I would just refer to the last part of the audit, where we indicated that the department really doesn't have a performance measurement approach in place, so it was not at that point doing the work it needed to do to understand what the impact of the program was on the labour market. That's something it should be doing.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now we'll go over to MP Cuzner, please.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Thank you very much, Mr. Chair.

I'd like to thank Mr. Ferguson for the presentation and the report. I agree with MP Wong that it's an excellent report and that it brings forward important issues. I'll take two minutes off the top to bring us to why we are where we are.

We know that the program functioned fairly well in the early 2000s. In 2007, Diane Finley was the minister, and she pretty much took the shackles off the program. The checks and balances on the program were taken off in 2007. She said they expanded the temporary foreign workers program very significantly and deliberately. We know that between 2007 and 2012, there was a 63% increase in the number of temporary foreign workers in Canada, resulting in almost half a million temporary foreign workers in this country.

We're all aware of the HD Mining situation, where a Chinese company was coming in and one of the requirements to get work at the company was that you had to speak Mandarin. Canadians started asking themselves what was taking place here. In 2012-13, Jason Kenney took over the reins of the department and he pretty much slammed it shut. He went from this end of the spectrum to that end of the spectrum. He pushed back the entire house just to tighten the clothesline, so it really didn't serve Canadian business well, and I question whether it served Canadian workers either.

We understood there was a problem with the program. The NDP understood there was a problem with the program. As a critic at the time, I tabled a motion in the House to have a committee study it. I know Mr. Boulerice voted in favour of that. I voted in favour of it. His colleague Jinny Sims tabled a motion in the House to have the Auditor General engaged in the motion. That was back in April 2013, when we had two motions in committee. John McCallum, my former colleague, wrote a letter to the Auditor General asking him to come in. We supported this knowing that problems existed with the temporary foreign worker program, so we are happy to see you here today and very happy that you undertook the study. As to the findings of the study, we want to thank you for your work.

As a government, we believe the guiding principles of the temporary foreign worker program should be, number one, that Canadians get first crack at jobs in this country. We also believe that Canadian wages cannot be suppressed by a temporary foreign worker program. We believe that the rights and safety of guest workers should be protected by this program, and we also believe that Canadian businesses, if they are going to be competitive globally, still need access to a quality labour force. That's the balancing act. It's a complex balancing act, but it's one that we believe this program has to deliver. Many of the recommendations that you've come forward with, and—I'm giving the committee a shout-out as well—some of the recommendations that came forward from the study undertaken by the committee worked toward this.

Let me get to my question. Wage suppression is central. We can't be keeping wages low as part of a business plan. It's important that temporary foreign workers are a last resort and that we're not having the impact of wage suppression. I want to ask you about the calculation for median wage. How can we improve the current system? Do you think there's room for improvement in the current system, or should there be a different system of calculating wages? Is there enough around that issue?

[Michael Ferguson]

We didn't get down into the detail of how they calculate the wages. What we recommended in paragraph 5.99 of our report was that Employment and Social Development Canada should finalize and implement its performance measurement strategy and that it should conduct analysis to determine the temporary foreign worker program's impact on the labour market. In earlier paragraphs, we talked about the fact that there was an analysis prior to the reforms that showed that wages for coffee shop workers had stagnated or perhaps even declined in certain areas where there were temporary foreign workers. New measures were brought in, but the department didn't analyze whether or not those measures changed the situation.

Fundamentally, we were saying that the department wasn't doing the analysis it needed to do to understand what the impact was on wages and the comparison with Canadians' wages in the same area.

[The Chair, Liberal, Bryan May]

You have 10 seconds for a question.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Maybe I can catch somebody if there's spare time later.

[The Chair, Liberal, Bryan May]

All right. Thank you.

We'll move over to Mr. Boulerice.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much, Mr. Chair.

My thanks to the witnesses for joining us today. I thank them for the important work that they are doing on this program, which has a very real impact on the lives of not only businesses but also some workers.

My colleague Mr. Cuzner did a good job of summarizing the history of the past 10 years. The previous government had two very different approaches to the issue. At the outset, we felt that the seal of approval was automatically applied to all applications, which resulted in an explosion in the number of temporary foreign workers. This worried many workers in Canada and Quebec.

We heard the absurd example of mines, where the ability to speak Mandarin was a requirement to get a job in the sector. There were also temporary foreign workers in the banking sector or in Tim Hortons franchises. That shocked a lot of people at the time. I don't understand, because the previous prime minister was very fond of Tim Hortons.

I know there are fewer temporary foreign workers right now. However, I still have concerns about what you're telling us. In your view, there are no guarantees that foreign workers will be used as a last resort. In addition, it is difficult to determine whether there is a true labour shortage. Furthermore, recruitment efforts are often not made in adjoining communities.

I understand that our economy and some businesses need those temporary foreign workers. However, our responsibility is to provide work for Canadians first and foremost. As I understand it, the problem as a whole is not solved.

[Michael Ferguson]

We reviewed the program according to the reforms and the new steps at the time. We had to check whether the department had done the job properly and had implemented all aspects of the program.

As you mentioned, it was difficult to determine whether temporary foreign workers had been used as a last resort only. We indicated that the department did not ask employers enough questions or use the available information to determine whether there was a real labour shortage. When we conducted the audit, the program still had gaps. I cannot say whether the department has now addressed those issues. Our observations referred to the situation at the time of the audit.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Ferguson.

What concerns me more is that there is no strategy to measure the program's performance or efficiency, or any way of knowing its true impact on the labour market in the various regions of Canada. Without data, facts or objective evaluation, we are in the dark as to the program's effectiveness.

[Michael Ferguson]

For any program, having a way to measure performance is crucial. We indicated that the department is developing a performance measurement program. We also indicated that more information is needed in many cases in order to truly understand the program's impact. We recommended that the department prepare and implement a performance measurement strategy.