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Restaurants Canada Warns Of Closures As Temp Foreign Worker Program Suspended

Industry Warns Of Wave Of Restaurant Closures

The federal government’s decision to suspend the temporary foreign worker (TFW) program for restaurants has the industry up in arms, with a leading lobby group hinting it could lead to a wave of restaurant closures.

“In areas of the country with severe labour shortages, the TFW program is vital, allowing restaurants to remain in business, and to continue to provide jobs for their Canadian employees,” the industry group Restaurants Canada said in a statement released Friday.

“Albertans in particular will remember what it was like a few years ago to find restaurants closed because of a shortage of workers.”

Employment Minister Jason Kenney announced this week the federal government is suspending the use of the TFW program by restaurants, following allegations that McDonald’s franchises in B.C. were exploiting workers hired under the program while other restaurants have been firing Canadian staff to take on temporary foreign workers. It’s unclear how long the suspension will last.

“The majority of restaurant operators using the program operate in complete compliance and it is unfortunate that their businesses and employees will be hurt by this broad-stroke approach,” Restaurants Canada said.

Joyce Reynolds, the group’s executive vice-president for government affairs, told the Globe and Mail she’s been receiving calls from restaurateurs who say they don’t know how they will keep their restaurants open.

McDonald’s franchise owners reportedly made similar remarks during a conference call with the CEO of the company’s Canadian division, which was obtained by the CBC. That recording became infamous quickly, as it featured the CEO of McDonald's Canada referring to the controversy over the TFW program as "bullshit."

Without a TFW program, “every single foreign worker in Alberta is going to leave us,” a McDonald’s franchisee said on the call, as reported by the CBC. “They are scared. The restaurants are going to fall apart. This is how it is on the ground.”

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Several recent studies of Canada’s labour market have indicated that claims of “severe labour shortages” in Canada are overblown, and critics have suggested some businesses are using the claim as an excuse to use the TFW program and keep wages from growing.

The Parliamentary Budget Office estimated in a recent report that as many as one-quarter of new jobs created in Canada are going to temporary foreign workers.

However, some of those studies have also suggested that there are legitimate, localized labour shortages, particularly in Alberta and Saskatchewan.

All the same, a report released this week by the C.D. Howe Institute argued that the TFW program actually accelerated a rise in unemployment in western Canada over the past decade.

The report said the total number of temporary foreign workers in Canada more than tripled in a decade, to 338,000 in 2012 from 101,000 in 2002.

“These policy changes occurred even though there was little empirical evidence of labour shortages," report author Dominique M. Gross said in a statement.

Restaurants Canada criticized the report, saying it only looked at data through 2012 and did not take into account the changes the federal government made to the program last year, making it more difficult for some employers to access the program.

The number of foreign workers in the restaurant industry has declined rapidly since then, Restaurants Canada said in a statement, falling 28 per cent between 2012 and 2013, and dropping another 38 per cent in the first quarter of 2014, the industry group said, citing numbers from Economic and Social Development Canada.

“This drop has also led to more unfilled restaurant jobs, particularly in western Canada,” the group said.

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