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Temporary Foreign Workers In Alberta: Report Shows Flood Of TFW As Jobs Disappear, Wages Fall

The Ugly, Shady Side Of Foreign Workers Program In Alberta

What was intended to be a tool aimed at preventing economic retreat and loss of revenue due to labour shortages, has become a go-to solution for companies to artificially keep labour costs down, according to a new report.

The Temporary Foreign Workers Program has evolved into an effective tool used by corporations to increase their profit margins. Alberta opponents of the TFWP claim it does so on the backs of foreign and Canadian workers, and say the province is ground zero for the worst offences, abuses and misuses of the controversial program.

The TFWP has left Albertans out of work and bred a subculture of foreign worker abuse, claims the Alberta Federation of Labour in a report titled From Last Resort to First Choice. The report, released earlier this week, highlights all that is allegedly shady and ugly about the federal program.

Debate over the controversial initiative reached a fevered pitch this week and prompted the federal government to announce a list of changes to the TFWP.

But the changes are too little to affect any kind of meaningful change, claims AFL president Gil McGowan.

Figures in the report outline a pattern that shows how the program has had negative impacts on job seekers, on average wages and questions whether the premise for the federal program was even valid during, and post, the recession.

According to those numbers, the program has led to artificially low wages, and has allegedly also contributed to soaring unemployment, harassment and abuse of foreigners working in Alberta.

The report outlines how foreign workers under the program have little recourse when faced with abusive situations at work because they are dependant on the employer to remain working and residing in Canada. It also expresses concerns about how workers end up in Alberta under false promises, while others are tricked or forced to pay into shady dealings in order to remain in the country.

Too often, instead of legitimately earning their fee from employers, recruiters charge prospective foreign workers for work placement, which is illegal under several provincial laws. In Alberta, for example, workers are charged recruitment fees ranging on average between $2,000 and $8,000, with some approaching $20,000. In addition, recruiters sometimes engage in illicit conduct, such as charging a fee to bring the worker to Canada for a job that never existed, no longer exists when the worker arrives, or exists for only a short time before the worker is laid off. Recruiters have also disseminated misinformation, such as exaggerating the amount a worker can expect to earn in Canada, and providing incorrect information about the worker¹s opportunities to obtain permanent resident status once in Canada. Furthermore, recruiters often charge very high fees for other services, such as obtaining an extension of a work permit (House of Commons Canada 2009, 31).

-From Last Resort To First Choice

Several other studies conducted into the matter by universities, and even the Fraser Institute, have spoken out against the program and back the findings made by the AFL report.

Simon Fraser University professor emeritus Herb Grubel, who writes frequently for the Fraser Institute, told the Vancouver Sun this week the program only helps the employer at the expense of proper business practices and at the cost of Canadian workers.

Grubel describes the TFW program to the Vancouver Sun as a business subsidy that lets frequent users avoid increasing wages to attract workers, invest in training, or automate production to boost productivity.

Canadians shouldn't "swallow this argument made by employers who would rather hire immigrants than pay higher wages," Grubel told the Sun.

An Institute for Research On Public Policy report titled Do Short-Term Economic Needs Prevail over Human Rights Concerns? states the nature of the program makes foreign workers susceptible to all the aforementioned abuses.

"A significant factor is the restrictive nature of the work permit (temporary foreign workers are often tied to one job, one employer and one location), which can have the practical effect of limiting their employment rights and protections," the report states.

"Other problems include illegal recruitment practices, misinformation about migration opportunities and lack of enforcement mechanisms."

According to evidence from research conducted by the University of Alberta, as well as parliamentary committees, the abuse foreign workers are subjected to by their Canadian employers is well documented.

Although the program's effect on Alberta workers in its worst form is not as oppressive as it is on the foreign workers themselves, it is as pronounced and has long-term ramifications, the AFL report states.

The TFWP has had a tangible effect on Alberta's economic realities, keeping many out of work and keeping the wages of others low, while economic pressures continue to siege families and escalate across the province.

The original purpose of the TFWP when launched in 2004 was to address acute labour shortages in critical and specific industries and sectors, such as academia, and other specialized professions and trades.

But, in Alberta, it took on a life of its own during the oil sands boom between 2004 and 2008.

What it has turned into now is a quick and cheap source of labour for cost-adverse employers, the AFL report states.

"The oil sands boom meant wages had to keep pace with an economy that was lurching ahead without a plan for labour or skills shortages and employers wanted a way to contain labour costs," the report says.

"The only way to defy the laws of economic gravity is to flood the labour market with a supply of workers who are unlikely to demand higher wages, better standards, pensions, or benefits.

"When employers get easy access to vulnerable groups of lower-paid temporary workers, wages and benefits don't have to keep pace with economic growth. It puts downward pressure on wages when they should be going up."

The plan also became an aggravating factor during the recession, when unemployment grew at a violent pace, the report states.

As the unemployment rate swelled, so did the number of foreign workers flooding into the province, particularly those hired to perform menial jobs, which resulted in less work for Albertans with limited skill, as the jobs they would normally take were now taken up by TFWs and the jobs that they could get were at a deflated wage, the report adds.

The AFL study, which bases its findings on figures obtained from Statistics Canada, Citizenship and Immigration, Human Resources Services and Development Canada, and census figures, shows the correlation between Alberta's unemployment rate, wages and the growing number of temporary foreign workers being brought in to Alberta.

The numbers in the study state that despite the economic recovery experienced by the country, and particularly Alberta since 2008, the number of people making $13/hour or less has remained the same since the height of the recession in 2008 likely due to the continuing flood of underpaid foreign workers, states the report.

The youth unemployment rate has also remained steady since 2009, again, due to an unprecedented number of unskilled foreign workers coming into the province, it adds.

Numbers show that Alberta youth unemployment (ages between 15 and 24) is actually on the rise, with the rate growing from 26,900 during the recession, to 38,200 in 2011.

The number of workers in Alberta aged 20 to 24 remains effectively unchanged (200,500 workers in 2009; 200,600 in 2011). But the number of young people earning less than $13/hour has actually increased. In 2009, 54,200 young Albertans earned $13/hour or less, in 2011, it was 54,800. Low wages and high unemployment are a growing phenomenon for young people in Alberta.

Particularly in these sectors, there was never really a shortage of labour, states the report. What there was, was a shortage of people willing to do those jobs for less money, it states.

"The evidence is stark: Alberta employers are bringing in more TFWs than are needed to fill the new jobs the economy is creating... labour market conditions are not dictating TFW policy," states the report.

"Outside booming oilsands regions, the situation can be far more stark. Consider Medicine Hat, where the economy has shed more than 10,000 jobs since 2008 but hundreds more Temporary Foreign Workers arrive."

Additionally, many workers are being forced to become involuntary part-time employees, further driving down wages and the need for benefits.

During the height of the recession, in 2009, small-town Alberta saw the arrival of 13,480 new TFW, adding to the 29,385 already present, as 18,500 jobs disappeared.

The story is even more marked in 2010, when 213 per cent more TFW arrived than jobs were created, at a time when there already were 527 per cent more TFW than new jobs.

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New jobs created in Alberta in:

By The Numbers: Alberta's Temporary Foreign Workers

And there's little economic benefit to municipalities from having such a large population of temporary workers, despite the fact that population is large enough to put a significant demand on health services and real stress on municipal and provincial infrastructure, the AFL states.

By scale, their impact is even more profound on smaller municipalities.

For municipalities, stagnant wages at the lowest end of the job market means an erosion of the tax base, fewer homeowners, and less stability for local small business. Temporary Foreign Workers cannot put down roots in our communities. While most would like to live in Canada as permanent residents, their temporary status means they are likely to send most of their earnings back to their country of origin. Because they are not allowed to stay in Alberta, they are not going to be buying furniture for newly-purchased homes or having their cars serviced at the local mechanic¹s shop. They are not investing their money in their local credit union, or taking out a loan for a new vehicle. They do not have disposable income to spend at the local café or sporting goods shop.

The impact these labour populations have on their communities was made clear during the beef recall crisis that struck Brooks, where the slaughterhouse at the epicentre of last fall's E. coli scare is located.

Brooks, located in eastern Alberta and with a population of just more than 13,000, found itself in a state of crisis after more than 2,000 workers, hundreds of them classified as temporary foreign workers, were left without income when XL Foods was forced to close down.

With no savings, disposable income or any real possessions to leverage for quick income, many of them were forced to rely on the community for everything from food to shelter until the plant reopened two months later.

What Alberta needs, rather than the TFWP, is better and more effective immigration policies, for government and industry to make themselves responsible for training Albertans, and for industry to pay workers salaries dictated by market pressures, the report concludes.

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