Why Canada is cutting back on temporary foreign workers
Aug 29, 2024
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Matt Lundy, an economics reporter for The Globe, delves into Canada's recent decision to cut back on temporary foreign workers. He highlights a dramatic increase in foreign worker permits and the government's aim to reverse these pandemic-era changes. Lundy discusses the implications for businesses, especially those that rely on low-wage labor, and raises concerns about workers' rights amidst stricter regulations. Additionally, he examines how this decision intertwines with broader immigration policy shifts and the ongoing debates about economic growth in Canada.
Canada is reducing the number of low-wage temporary foreign workers to prioritize local job seekers amid rising unemployment rates.
The government faces scrutiny over previous expansion of the program, which critics argue failed to address essential labor shortages.
Deep dives
Changes to the Temporary Foreign Worker Program
Recent changes to Canada's Temporary Foreign Worker (TFW) program include stricter hiring guidelines for employers relying on the low wage stream. Employers will now be limited to hiring only 10% of their staff through this stream, down from 20%, which reverts to pre-2022 rules. Additionally, the government will prevent hiring from the low wage stream when local unemployment rates are at 6% or higher, affecting many workers in sectors like fast food and hospitality. These adjustments aim to prioritize local job seekers and reduce overreliance on foreign labor in a changing job market.
Impact of Labor Market Changes
The labor market in Canada has shifted significantly, with the national unemployment rate rising to 6.4%, prompting the government to reassess the TFW program's parameters. Youth unemployment is notably high at 14.2%, reflecting challenges for younger job seekers in a competitive environment. Critics argue that expanding the program previously did not address fundamental labor shortages; rather, it may have allowed companies to avoid improving wages and working conditions. This scrutiny has intensified as many Canadians struggle to find employment, raising questions about the necessity of a growing number of temporary foreign workers.
Government Response and Future Outlook
The Canadian government is facing pressure to tighten immigration policies, especially in light of rising housing costs and unemployment concerns. As part of a broader initiative, the government plans to review the program and potentially adjust permanent resident numbers, which could signal a shift away from its previous stance on high immigration levels. Advocacy groups warn against scapegoating temporary foreign workers for economic challenges, emphasizing that policies should address systemic issues rather than targeting vulnerable populations. The 90-day review period may lead to further changes, including increased application fees for hiring through the TFW program.
The government has announced that they are cutting down on the numbers of low-wage temporary foreign workers being admitted into the country. The new rules will reverse pandemic-era changes to the program, which led to a sharp rise in numbers. The announcement also comes on the heels of a UN report calling the program a “breeding ground for contemporary forms of slavery.”
The Globe’s economics reporter Matt Lundy breaks down what’s driving the change, and how it will impact businesses and workers.