Don't rush to a temporary labour fix
The Ottawa Citizen
Published: Saturday, November 18, 2006
Minister of Immigration Monte Solberg announced plans on Wednesday to speed up the process under which employers can bring in temporary foreign workers. While this will be good news for industries in Alberta and British Columbia where labour is in short supply, such programs must be managed carefully if they are to avoid discouraging Canadians from acquiring the training required to take advantage of these new employment opportunities.
While labour shortages do occur in Canada — and we obviously have some at present — most of these can be met in the course of time from our own resources.
This point has been made by one of Canada's foremost experts on the relationship between immigration and the labour market, Alan G. Green, professor of economics (emeritus) at Queen's University. Prof. Green has pointed out that, although Canada did not have the educational infrastructure required to meet all our skilled needs when we began targeting immigrants based on their skills in the 1960s, it does have the facilities in place today.
Shortages will still occur because of the cyclical nature of some sectors of the economy, but immigration will only prove to be an effective means of filling such gaps in exceptional cases, according to Prof. Green.
In most cases normal market forces will kick in to fill the shortages. The latter will push up wages and this in turn will cause more Canadians to acquire the training necessary to enter the field. Not surprisingly, employers neither want to pay higher wages if they can avoid them, nor do they want to have to wait until enough Canadians are trained.
While this is understandable, we also have to take account of the fact that Canadians will be reluctant to invest in the training required if wages are kept down by an influx of foreign workers willing to work for less. As one senior American official described it, “immigration fixes undercut efforts to improve public education, create better retraining programs, and draw the unemployed into the labour market.”
Not only can large numbers of temporary foreign workers have a negative impact on the readiness of Canadians to obtain the skills necessary to fill the labour market shortages, but they can also have an adverse effect on immigrants.
An Australian study that examined why immigrants to that country in recent years have had better labour market outcomes than those in Canada noted that, among a number of factors, the net inflow of non-permanent workers added a greater proportion to the labour force in Canada than in Australia. Newcomers entering on a permanent basis therefore probably faced greater competition in the labour market in Canada as a result.
This does not mean that we should not bring in any temporary foreign workers. A good case can probably be made for bringing in at least some skilled labour from abroad for the short to medium term to support the rapid development of the energy sector in Alberta. By the same token, we must find ways of ensuring that it does not create a situation that will deter Canadians from moving into the field when they are ready.
Canada has for some time had programs for bringing in agricultural workers from Mexico and the Caribbean on a seasonal basis. Little research has been done in this country, however, on how well programs for temporary foreign workers perform when they come here for longer periods. In contrast, the Center for Immigration Studies in Washington, D.C. has carried out a number of studies on how such programs have worked in the United States and other countries.
Our federal government should examine carefully the sort of problems identified by the centre before embarking on large-scale, long-term temporary foreign worker programs. Its research showed that, if such programs are to work effectively, applications have to be thoroughly vetted, and the resources required to do this are considerable. U.S. immigration officials told the New York Times that the majority of applicants in certain offices were clearly fraudulent but that they were approved anyway because the officials responsible did not have the means or the time to document the fraud.
While it makes sense to have employers involved in the selection process to ensure that those coming to Canada actually have jobs (and, indeed, they could well play a greater role in selecting those entering as permanent immigrants), we should not be oblivious to the possibility that unscrupulous sponsors may charge applicants hefty fees to get them into the country on work permits without actually providing jobs after they arrive — as has happened in the U.S.
Ensuring that longer-term temporary workers leave the country when their services are no longer needed is also a major challenge. Many temporary workers from countries where wages are much lower come with the intention of staying permanently if possible, and effective mechanisms and substantial resources will have to be in place if we are to ensure they leave, if and when they are supposed to.
Other problems identified by the Center for Immigration Studies include a tendency to avoid introducing technological innovations if an abundance of labour is available because of foreign worker programs. While Canada's relatively weak performance in terms of productivity gains compared to other industrialized countries is no doubt due to a number of causes, the fact that we have the highest immigration intake per capita in the world is difficult to ignore as a likely contributing factor.
It is important that the government be fully aware of the downsides that can accompany such temporary worker programs if they are not carried out with care and with significant resources.
Martin Collacott is a former Canadian ambassador in Asia and the Middle East. He is currently a senior fellow with the Fraser Institute in Vancouver.