Canada reforms temporary immigration visa regime

Canadian government ministers have announced a U-turn in their policy on temporary foreign workers. The announcement comes after two high profile cases which seemed to show abuse of the system have caused negative headlines for the Temporary Foreign Worker Program.

Temporary foreign workers who work in Canada under the Canadian Temporary Foreign Worker Program (TFWP) must now be paid at the same rate as Canadian workers, there will be greater enforcement of the requirement that temporary foreign workers should not displace Canadians and English and French will be the only languages which can be specified as a requirement for employment. The changes will take place with immediate effect.

Last year, Canada introduced several changes to the TFWP aimed at stimulating the economy. It allowed employers to pay foreign temporary workers 15% less than the median pay in any sector and also speeded up the system for gaining work permits. The Accelerated Labour Market Opinion (ALMO) allowed employers to get work permits for foreign staff in about ten days. Both these measures have been reversed because of cases which seem to show that they are encouraging employers to employ foreign workers instead of Canadians.

Temporary workers must be paid 'the prevailing wage'

On 29th April 2013, Jason Kenney, the Canadian Minister for Immigration and Multiculturalism, and Diane Finley, the Human Resources Minister, gave a joint press conference in Ottawa to announce the changes which are as follows.
  • All temporary foreign workers must now be paid 'the prevailing wage' for the job that they are doing.
  • The Accelerated Labour Market Opinion (ALMO) process will be suspended.
  • The government will have greater powers to suspend and revoke work permits where the system has been abused
  • Employers will need to show that they are not replacing Canadian workers with foreign workers.
  • Employers which rely heavily on foreign workers will need to show how they intend to employ more Canadians in future
  • The government will raise the fees for applications to employ foreign workers.
  • Employers will no longer be able to specify that employees must speak language other than English and French (Canada's national languages) in order to take a job.

The ministers were responding to two recent, high profile cases which, unions allege, show that the TFWP is being abused by employers.

In November 2012, unions launched a court case against HD Mining, a mining company which imported 200 Chinese miners into a mine in British Columbia. The unions said that there were plenty of available Canadian miners to do the job and the Chinese miners were being paid CAN$10 an hour less than the market rate. The company said that this was because the mine was using the 'long wall' mining technique which was not used in Canada so there were no suitably qualified miners available locally. HD Mining is 55% owned by a Chinese company.

Unions allege abuse of the system

Unions alleged that the Chinese miners were also being forced to make illegal payments to that company in order to work in Canada. The unions said that it was an abuse of the system to bring in workers and pay them less than the market rate when there were plenty of unemployed Canadian miners living locally. They said that the employer was only employing Chinese speaking miners, further disadvantaging Canadian workers.

The second case was even more damaging to the reputation of the TFWP because it involved the flagship Canadian bank, The Royal Bank of Canada (RBC). It also involved allegations that existing staff were being made redundant and replaced by foreign temporary workers.

Unions allege that RBC subcontracted certain functions to Indian outsourcing firm iGate. iGate then applied to the Canadian government for permission to bring in temporary workers. This was granted and once the temporary workers arrived, existing Canadian staff were instructed to train them and were then made redundant. The iGate staff were paid less than their Canadian counterparts.

iGate: 'Authorizations are properly issued under existing law '

When the news of this arrangement broke in early April, iGate spokesman Prabhanjan Deshpande said that the company was doing nothing wrong; 'For any engagement requiring foreign workers, appropriate immigration applications are filed by iGate and all work authorizations are properly issued under existing law and policy'.

However, the Canadian Broadcasting Corporation's Go Public investigative TV programme claims that iGate has yet to respond to allegations that it did not inform the Canadian government that its workers would take the jobs of Canadian staff when applying for Canadian work permits.

At the time, a Canadian government spokesman said 'We recently learned of allegations that RBC could be replacing Canadian workers by contracting with iGate, which is filling some of the roles with temporary foreign workers. If true, this situation is unacceptable'.

Even before these latest cases, unions in Canada were complaining that Canadian employers were replacing indigenous workers with cheaper temporary foreign workers on work permits. They say that foreign workers are not being used as a last resort, as the law requires, but were, instead, being used as an alternative to Canadians and to drive down wages.

Number of temporary foreign workers has more than doubled since 2002

The unions point to the fact that the number of temporary foreign workers with short term work permits (usually lasting either one or two years) has risen from about 185,000 in 2002 to around 447,000 in 2011. Meanwhile, the Canadian unemployment rate has remained higher than 7%.

But Sharaf Sultan, a lawyer at Canadian law firm Heenan Blaikie says that the TFWP contains many protections for Canadian workers and 'thoughtfully assesses the potential impact of the entry of a foreigner in the Canadian labour market. Contrary to the accusations of several commentators, the TFWP is already geared, first and foremost, at protecting local labour markets'. He adds 'Canada faces serious labour shortages across various regions and sectors of the economy'.

In order to employ a foreign worker under the TFWP, a Canadian employer (or international employer like iGate) must receive a Labour Market Opinion (LMO) from Human Resources and Skills Development Canada (HRSDC), the Canadian government's department for employment.

Accelerated LMO procedure reduced protection

An LMO is a certificate which assesses the likely impact of employing a foreign worker on the Canadian economy. In order to be allowed to employ a foreign worker, employers must show that this will have a neutral or a positive effect on the Canadian jobs market. This is done by showing that the job has been adequately advertised to Canadian workers. However, after the government had introduced the Accelerated Labour Market Opinion (ALMO), it became easier for employers to get approval without showing that they had advertised. The unions say that this resulted in reduced protection for Canadian workers.

The joint announcement by Mr Kenney and Ms Finley will, seemingly, make it harder to get LMOs for foreign workers. Ms Finley told the press conference 'The purpose of the TFW program is to help fill genuine and acute labour needs and we have been reviewing the program to ensure that goal is met and Canadian workers are never displaced.'

Even so, the overall trend towards the employment of more workers on temporary work visas, both in Canada and globally, looks set to continue.

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