Temporary Foreign Workers: Should They Stay Or Go?

Temporary foreign workers in crisis: Should they stay, or go?

Globe and Mail
April 30, 2009 at 12:00 AM EDT

Canada's temporary foreign worker program, until 2002, allowed only skilled workers, seasonal agricultural workers and live-in caregivers to come. As the economy was expanding in the late 1990s, several industries, particularly in Western Canada, started to voice concern about the difficulties of finding workers, and the federal government extended the program to low-skill workers. Since then, it has become increasingly easier to hire temporary foreign workers through an accelerated hiring procedure and a lengthening of the employment contract from 12 to 24 months. These changes substantially decreased the cost for employers to hire such workers relative to reaching for resident workers beyond the local market or through training.

The policy changes had two consequences: The number of annual entries of temporary foreign workers increased exponentially since the new millennium (plus 41.6 per cent between 2000 and 2007), and entries shifted drastically toward lower skill levels. The proportion of temporary foreign workers who stated an occupation requiring less than secondary school or for which on-the-job training is provided increased by 120 per cent. When agricultural workers are excluded, the increase is 287 per cent. Meantime, the proportion of temporary foreign workers in occupations requiring university education plunged by 30 per cent.

The drastic slowdown in the economy will undoubtedly affect entries of these workers. But since the program is made up of different categories with different rules, the consequences for those already in Canada will be vastly different. University trained workers probably will not see much change, as most of them come through company job transfers. Seasonal agricultural workers also will be relatively unaffected as agricultural production is not likely to decrease as much as industrial production, and the activity is unlikely to become suddenly attractive to Canadian workers.

But what about the medium-skill and low-skill workers who came to Canada under conditions very similar to the ones in place in European countries 40 years ago?

Countries with “guest worker” programs in the 1960s and 1970s were highly criticized for not running proper immigration policy and solving their labour-market adjustment problems on the backs of workers from poorer countries. European countries terminated their temporary foreign worker programs for low-skill workers decades ago because of the unavoidable adverse consequences when economies slowed down. Is Canada going to solve its 21st- century unemployment problem on the backs of workers from poorer countries?

If the Canadian program was indeed designed to avoid those failures by focusing on skilled workers, it is hard to see how it will not lead to the same consequences. Research is clear: Temporary foreign worker programs aimed at low-skilled workers rarely have positive outcomes for all parties involved. There is no win-win-win solution for workers, employers and sending countries.

Germany ended up legalizing about one million temporary foreign workers who could not be persuaded to go home when they lost their jobs. In America, when the Bracero program initiated in 1942 by the U.S. and Mexico was terminated in 1964 because technology had replaced unskilled workers on California farms, more than one million stayed illegally. Switzerland had a provision for transition from temporary to permanent residency after some years of uninterrupted work, and most temporary foreign workers stayed under that scheme. Whether legally or not, such workers tend not to go home.

Some categories of temporary foreign workers in Canada have access to permanent residency – skilled workers and live-in caregivers. Provincial nominee programs allow them to apply for permanent residency within various periods of time. The vast majority of temporary foreign workers, particularly the least skilled, don't have access to permanent residency. In 2007, according to Citizenship and Immigration Canada, 9.6 per cent (19,400 out of 201,100) of the foreign workers moved from temporary to permanent status.

By bowing to pressure from employers who could not find unskilled workers locally despite a national unemployment rate of more than 10 per cent, the Canadian government implemented a flawed system. No economy grows forever, and people are not goods. People do not cross borders back and forth just as demand changes like cars. Yet, unskilled temporary foreign workers are expected to leave – because that's what their contract says.

Countless experiences in OECD countries show that responding to short-term labour needs with a policy with long-term consequences does not work. At the very least, every temporary foreign worker should have a chance to become a permanent resident, not just those landing in the right province in the right category.

Some argue that letting employers choose who enters is against all the principles that have shaped Canada as an immigration country. That would call for closing a program that was bound to fail and for better designed education, training and permanent migration policies.

Dominique Gross is a professor in the Graduate Public Policy Program at Simon Fraser University.