How the temporary foreign worker program is shaping Canada’s underground economy

This is the first part of Alia Dharssi’s series, Workers Without Borders. 

Alia Dharssi
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Published on: September 14, 2016 | Last Updated: September 14, 2016 9:36 AM MDT

The first time Reylene Punzalan saw snow five years ago, she couldn’t resist tasting it.

I was so excited because the snow was so beautiful,” recalled Punzalan, 28, a Filipina woman with a freckled face and pin-straight black hair.

That was in 2011, some months after she landed in New Brunswick to take up a seasonal job as a “ringer” picking meat out of lobsters at a seafood processing company. 

The anxiety Punzalan felt upon arrival in Shediac, the self-proclaimed Lobster Capital of the World, dissipated when she felt welcomed by friendly Canadians who greeted her on the streets.

But Punzalan must leave Canada in November.

She’s caught up in the so-called “four-in-four-out” rule, a regulation that limits temporary foreign workers, or TFWs, to four years of working in Canada, after which they can’t return for four years.

Reylene Punzalan, a migrant worker from the Philippines who is working in seafood processing in New Brunswick, greets a fellow congregation member at the Shediac Bay Community Church on Sunday August 28, 2016. Viktor Pivovarov/for Postmedia Calgary Herald

The Conservative government enacted the rule in 2011 to prevent foreign workers from taking jobs from Canadians and to ensure they were filling truly temporary positions.

But employers say many of their jobs are simply filled by new migrant workers or left vacant, rather than going to Canadians, who have little interest in many low-paying industries.

Instead, the rule is pushing many underground.

I didn’t even think to go home,” said a worker from Bangladesh who lost his temporary foreign worker permit, but has managed to stay in Canada as a refugee claimant. “There’s no jobs. If you work in Bangladesh, you’ll work 10 hours and just get $5 a day.” 

Canada’s population of undocumented immigrants has likely grown by tens of thousands of people since April 2015, when activists with the Migrant Workers Alliance for Change estimated 80,000 people hit the limit on their right to work in Canada.  

Immigration, Refugees and Citizenship Canada did not provide any government data on how many people were affected by this rule, but the situation of undocumented migrant workers has caught the attention of the federal cabinet. 

I’ve heard reports from, in particular B.C. and Toronto, where the underground economy has swollen,” said federal Employment Minister MaryAnn Mihychuk, noting several members of Parliament told her they have met former TFWs who stayed. 

We are reviewing that situation because, as a consequence of that four-year rule, there are quite a high number of people who have to leave or might face deportation,” added federal Immigration Minister John McCallum.

But former Conservative immigration minister Chris Alexander said the four-year cap “makes absolute sense.” 

We’re a permanent immigration country,” he said. “If somebody has been here four years and they cannot find a pathway to immigration, then their skills probably aren’t sufficiently in demand to justify them staying as a temporary foreign worker.”

Reylene Punzalan, a migrant worker from the Philippines who is working in seafood processing in New Brunswick, attends a service at the Shediac Bay Community Church on Sunday August 28, 2016. Viktor Pivovarov / For Postmedia

In a coffee shop in New Brunswick, Punzalan breaks into tears. She never had the option of applying to stay in Canada permanently because she has a seasonal job that does not make her eligible for permanent residency through New Brunswick’s provincial nominee program. 

Now, she can barely speak when she thinks about how giving up her job in Canada will affect her family back home. Punzalan has been working to support them since graduating from high school. In the Philippines, she worked in a factory assembling cordless phones.

Then, in 2008, after her father had a mild stroke, she left home for Taiwan to take a better-paying job building circuit boards.

But her wages were not enough to cover her family’s expenses, so when she heard a recruitment agency was looking for people to send to Canada, Punzalan seized the opportunity. 

She now earns $12.50 an hour in Shediac. Her earnings go toward remedies for her mother’s heart disease and diabetes, and her younger sister’s schooling. Her father died in 2013. 

Punzalan doesn’t think she will find a job in the Philippines that pays enough to cover her family’s costs, so she plans to return to Taiwan after leaving Canada. 

I am scared,” she said before bowing her head to cry.

I am scared,” says Reylene Punzalan, a migrant worker from the Philippines, about giving up her job at a seafood processing facility in November. Viktor Pivovarov / Calgary Herald

Punzalan’s job will likely be filled by another temporary foreign worker, rather than a Canadian.

Her employer, Shediac Lobster Shop Ltd., advertises openings in local newspapers and social media, in addition to running a bus to its facilities from Moncton, the closest major city.

But there are not enough locals who want to handle lobster guts to fill the jobs.

As an employer, you are losing a loyal, trained, retained employee,” said Lana Desruisseau, who manages human resources at the Shediac Lobster Shop.

The cost of that is enormous.” 

An Uncountable Problem

Though Punzalan plans to depart Canada in November, many former workers have not left.

But the exact number and how much the four-year cap has contributed to the expansion of Canada’s underground economy is unclear.

We don’t know because we don’t track exits,” said Mihychuk. “Somewhere between 20,000 and 200,000 are the numbers that people have suggested to me.”

They are part of an underground economy dominated by the construction industry, retail, hotels and restaurants that Statistics Canada estimated was worth $45.6 billion in 2013. 

A briefing note for the federal immigration minister in 2006 said there was an estimated 80,000 to 120,000 undocumented immigrants in Canada’s larger cities. 

One year later, an RCMP report raised the estimate to between 200,000 and 500,000. 

Solidarity Across Borders, a Montreal-based activist group, estimates there are up to one million undocumented immigrants in Canada today. 

Dan Davidson, regional programs manager at the Canada Border Services Agency, said it isn’t clear if many TFWs are staying past the four-year limit. Cases may not come to the attention of the agency for years. 

We are not seeing a significant increase in that area,” he said. “It’s always been a concern, even before the rule, because work permits would expire and people would stay outside of those.” 

At least as far back as 1980, economists warned guest worker programs lead to long-term residency, but Canada didn’t heed those lessons when ramping up its migrant worker program or creating the “four-in-four-out” policy, said Dominique Gross, an economist at Simon Fraser University.

When the four years come to an end, if those are very good, efficient, productive workers, employers do not want to get rid of them,” Gross explained. “And they would like to stay because they have a good job with a good wage, so they can negotiate together.” 

If their employers decline, such workers are likely to find others who will hire them illegally, but at very low wages, Gross added. 

The experience of other countries, including Germany and the United States, supports this theory.

In 1973, after the German government shut down a guest worker arrangement with Turkey, many migrants didn’t leave. Instead, they brought family members into the country.

By 1984, Germany’s Turkish population had swelled by 40 per cent to more than 1.4 million. 

A series of guest worker programs in the U.S. starting in the 1940s contributed to illegal immigration from Central America over several decades. By the 1980s, there were so many undocumented workers in agriculture, the U.S. government decided to grant amnesty to more than one million. 

Across Canada, frontline workers, activists and lawyers say they’ve met many former TFWs who chose to stay beyond the four-year rule.

Anecdotally, it is growing,” said Ethel Tungohan, a political scientist at York University who conducted research on TFWs in Alberta affected by the four-year rule.

Their whole families are depending on them for survival,” explained Evelyn Encalada Grez, a professor at York University who does research on temporary foreign workers from Central America.

Some of them will take that risk because it’s better than being in rural Guatemala.”

Grez, who is also an organizer in Ontario for an advocacy group called Justice for Migrant Workers, estimates that six out of 10 workers have overstayed their permits.

She met one group of workers who travelled across Canada to Toronto to find work after their visas expired, but were so scared of being identified when they saw some police officers that they threw their passports in a dumpster.

Novie Sanchez, an organizer with Migrante Alberta, a TFW advocacy group, estimates about 80 per cent of low-skilled TFWs in the Calgary area stayed after hitting the four-year limit, in spite of the downturn, because it made economic sense.

Many find under-the-table jobs in the cleaning or food industry, she said.

Cesar Castro, a Honduran TFW who worked in an Ontario greenhouse until May, reluctantly admitted he knew one worker who’d stayed. 

The work that is there (in Honduras) is not enough to be able to survive or to give your children the chance to study,” said Castro, who was previously a migrant worker in Spain to remit money to his three children. 

Cesar Castro, a temporary foreign worker from Honduras, picks cucumbers at a greenhouse in Beamsville, Ont. in January. He had to leave Canada in May and is not allowed to return as a migrant worker because he hit the four-year cap on his right to work in Canada. Graham Runciman / National Post

I would do it,” said a single mother from Guatemala who started working as a TFW at a greenhouse near Beamsville, Ont., this year because she had no source of income after her ex-husband left her and her three children.

She pays her sister to care for her kids in Guatemala while she plants and cuts flowers for bouquets in Canada, sometimes for as long as 14 hours a day.

Some stayed past the four-year rule in hopes of obtaining permanent residency, such as through a provincial immigration program, an application for the right to stay in Canada on humanitarian and compassionate grounds, or as refugees.

Some have a realistic chance of being accepted. Others don’t. 

A market of immigration consultants, some of whom offered inaccurate advice but charged desperate workers hundreds or thousands of dollars, sprung up around April 2015, when the four-year rule went into effect.

Jamaican TFWs working at Highline Mushrooms in Leamington, Ont., were so desperate to stay in Canada that they paid consultants up to $8,000 in fees for applications to stay in Canada as permanent residents, even though they were ineligible.

Highline tried to warn them about the fraud, said Susan McBride, director of human resources at Highline Mushrooms.

Jose Osano hoped to become a permanent resident of Canada through the employer-driven stream of the Alberta Immigrant Nominee Program. Courtesy/Jose Osano Calgary Herald

They worried they wouldn’t be able to pay their children’s school fees if they returned home, she explained. 

Jose Osano, a Filipino TFW who worked at Country Hills Toyota in Calgary as a detailer, had hoped to settle in Alberta when he submitted a permanent residency application to the provincial immigration program with support from his employer in 2014.

But it took more than a year for Alberta to process his application. By the time he heard back, his work permit had expired and he was ineligible. 

When he received the news, he was staying at the Foothills Medical Centre in Calgary because he had suffered a stroke. He explained he had used his earnings in Canada to send his three children to school.  

I’m losing hope for my family,” he said with heavy eyes during an interview at the hospital weeks before he was deported in May. “I don’t want them to sleep on the streets.” 

After he returned home, his middle child dropped out of college. The family could no longer cover tuition fees. 

The Precarious Status of TFWs

The connections between undocumented immigration and the temporary foreign worker program run deeper than the four-year rule.

Critics say one of its biggest problems is the program leaves low-wage workers open to exploitation because their permits are tied to a specific employer. If workers lose their jobs or are fired, they are supposed to go home.

While it is possible for TFWs to change jobs if they find another employer who has obtained a permit to hire migrant workers, it’s not a certainty.

The situation is further complicated by recruitment fees, often amounting to thousands of dollars, that many workers pay to secure their low-wage jobs in Canada.

To get this money, people take debt, put their houses up for loan,” said Syed Hussan, spokesman for the Migrant Workers’ Alliance for Change, an advocacy group.

Some decide it makes more sense to stay than to leave.

This is the case for Luis, a former TFW who could easily be mistaken for a college student. He asked his full name be withheld for fear of deportation.

When the 21-year-old sat down for an interview with two other undocumented workers at a coffee shop in northeast Toronto, his slim and reddish freckled face was shaded by a Chicago Bulls cap that matched his grey-and-red running shoes and dark sweat pants.

He held a Samsung Galaxy phone. But a smartphone is a rare personal luxury for Luis, who sends most of his earnings to his mother and four sisters, all single mothers themselves, in Honduras. 

He also sends some money to his one-year-old daughter, though he is no longer in a relationship with her mother.

The youngest of five siblings, he speaks little English and went to school for just four years. 

I had to come here and give my life to help them, due to my being the only man in the family,” said Luis, who arrived in Canada in late November 2015 to work at a greenhouse in southwestern Ontario.

To secure the job, Luis took out a loan of more than US$5,000 to pay a $6,000 fee to a recruiter, who arranged for a three-month contract and guaranteed that it would be automatically renewed once Luis was in Canada.  

But it wasn’t and earning enough money to pay back his loan in Honduras would be an impossibility, Luis said.

So, Luis is trying his luck in Toronto, where his cousin, another former TFW, has already gone underground.

Now, Luis works in the construction industry and is paid at the end of each day.

This is not easy, to be far from my family,” he said with a sigh. “I don’t want to live like this. I’m stuck with my debt.” 

Canadian dreams

For those who have stayed past the four-year limit, many say it’s not just because they want to keep sending money home.

Some of the people I’ve interviewed have been here since 2008. So they’ve made social and economic ties here. They feel part of Canada,” said Tungohan. “One temporary foreign worker told me, ‘I feel Canadian without the passport.’”

Joseph, a TFW whose permit to work in seafood processing expired in January, lost the opportunity to become a permanent resident through New Brunswick’s provincial nominee program.

His employer supported his application with a full-time contract, but he failed the required English exam 10 times.

It cost him more than $3,000.

Though Joseph was able to be interviewed for this article in English, he struggles with written grammar. It seems all the more unjust to him because he was dedicated to his job, often working 12-hour days, and the language requirement for low-skilled workers was only put in place in 2012.  

During his time in New Brunswick, Joseph became an active member of a local church, where he sings and plays the guitar during services. His wife, Billi, joined him in Canada in 2013 to take a job at the same company. 

They met in Taiwan, where they were each working to support their children in the Philippines. Previous to that, Joseph says he earned $4 a day, driving a motorcycle taxi in the Philippines. It wasn’t enough to put his four children through good schools.

In November, the two had another child in Canada.

Billi, a temporary foreign worker from the Philippines, holds her baby at her home in New Brunswick in February 2016. Her husband, Joseph, was unable to secure permanent residency before his temporary foreign worker permit expired even though he was nominated by his employer. She hopes he will be able to stay in Canada on humanitarian grounds. Alia Dharssi / Postmedia

Billi has to continue earning money in Canada to support their children, but they are not sure how they will care for their baby girl if Joseph has to go home. Billi works long hours six days per week. 

Joseph has applied to stay in Canada on humanitarian grounds, but a decision could take months.

I always doubt what will happen to my family if I go back home,” he said with a tear in his eye. He has already received a notice from the border services agency telling him to leave the country.

It is not just a loss for Joseph, but a loss to the local community if he leaves, says Rev. Brock Symonds, a pastor at a Baptist church in Shediac.

His shrinking church was transformed by an influx of Filipino migrants.

When he started working there at 35, he was one of the youngest people in the church by two decades.

Now his congregation is filled with Filipino workers in their 20s and 30s. They’ve livened up services, infusing them with devotional rock music that has replaced 200-year-old songs on the piano, while a new enlarged building wouldn’t have been constructed without them, said Symonds.

Our church is very anxious about what will happen to our Filipino community. The thought of losing them is devastating.”

For now, the Trudeau government’s review of the temporary foreign worker program offers a glimmer of hope for some workers still in Canada.

I’m okay I guess ” Punzalan says via a text message after a day picking apart lobsters in the summer.

I only have till November to stay here in Canada … I’m hoping and praying that the law will change.”

Join the conversation on Twitter #workerswithoutborders 

Read more from Postmedia’s Workers Without Borders series: 

Desperate Canadian businesses seek changes to temporary foreign worker program
The murky world of the agencies that recruit temporary foreign workers
Skilled immigrants wasting their talents in Canada
Finding the right formula for business immigration
How small Manitoba cities are hand picking their immigrants