How employers of Temporary Foreign Workers get away with low pay and bad working conditions

October 3, 2016

Canada’s controversial Temporary Foreign Worker (TFW) Program is once again under the microscope with the release of a Parliamentary Committee report last week. While the report recommends some much-needed improvements to the rights of migrant workers, its main focus is to give employers easier access to TFWs. Instead, we need a re-think of the Program so it considers the interests of low-skilled Canadian workers.

To properly understand today’s TFW Program, we should consider its origins. The Program for low-skilled workers was introduced in the early 2000s. The federal government at the time argued it was needed to solve a labour shortage because “Canadians won’t do this work.” However, the shortages that the TFW Program was supposed to meet were actually the result of government and corporate policies that made a number of jobs with low wages and poor working conditions unacceptable to most Canadian workers.

Three industries that relied heavily on temporary foreign workers illustrate this point: farm labour, fast food and meatpacking.

Beginning in 2004, BC farmers received permission to hire foreign workers under an existing program, the Seasonal Agricultural Workers Program (SAWP). By then, farmworkers already were among the lowest-paid people in the province, due in part to decisions the provincial government had made. For example BC government regulations reduced farmworkers’ wages by four per cent by eliminating holiday and vacation pay. Later, the government eliminated overtime rates for farmworkers.

Agriculture jobs are seasonal (and thus temporary), physically demanding, performed in inclement weather and often dangerous. Cutting farmworkers’ wages—which were already often less than the minimum wage because of piece rates — only made them less attractive. It’s hardly surprising that farmers received few applicants and many workers quit after a few days on the job.

Instead of improving pay or working conditions, these employers received permission to import foreign workers for the jobs. Since 2005, more than 2,000 temporary workers have come to BC to work in agriculture each year. Under the terms of the SAWP agreement with Mexico, these foreign workers received better compensation than Canadians doing the same work.

Another industry that went to the government complaining they weren’t able to hire Canadians was fast food. In 2014-2015, fast food hired more temporary foreign workers than any other sector in Western Canada. To be sure, the oil sands boom affected labour markets in all of the Western provinces. In rural areas, some fast food restaurants raised wages considerably in an attempt to recruit workers who were lured by the prospect of oil sands wages. Still the industry imported thousands of foreign workers, many from the Philippines.

Privately, employers admitted to being dissatisfied with Canadian workers who would take the jobs for the prevailing wages in the industry. Even though they are often considered “unskilled”, fast food jobs are more demanding and require more skill than most people realize. Counter attendants are on their feet for most of their shifts. They have to deal with large volumes of customers and provide very rapid service. Employers found that Canadians who got the jobs, many of whom were teenagers and young adults, lacked the skills or commitment to do them well and did not stick around long. In some cases, turnover exceeded 100 per cent per year.

Fast food employers turned to foreign workers to fill these jobs. They recruited Filipinos with fast food experience, in some cases managerial experience, or post secondary education. Even the low wages paid in Canada were attractive to workers coming from poor countries, and many hoped that restaurant jobs would lead to permanent residency.

In effect, instead of solving a real labour shortage, the Temporary Foreign Worker Program simply allowed employers to recruit foreign workers with superior qualifications to Canadians for the same compensation, at or near the minimum wage.

The story of how the meatpacking industry came to rely on temporary foreign workers is another interesting one. For decades, a few large companies dominated the industry. Most plants were unionized and wages were relatively high. But economic forces and technological change upset these arrangements in the 1970s and 1980s. Employers demanded wage cuts as high as 40 per cent, and several bitter strikes followed. Large plants closed, and production shifted to smaller plants in rural areas, initially without a union.

However, these plants found it difficult to recruit local workers. Why? The work was dangerous and unpleasant. Jobs in the new plants were repetitive, dangerous and required little skill. Wages were low. Employers attempted to hire workers from other regions of Canada, which suffered from high unemployment. Even before the boom in the oil industry, they had little success. Eventually, meatpacking companies obtained permission to hire temporary foreign workers. Wages in many operations remain low. In BC, poultry processors hiring foreign workers offer a starting rate for new employees of ranging from $11-$12 per hour in non-unionized plants to $13.46 per hour in unionized plants.

The common pattern in these three industries is clear: low pay and poor working conditions explain why employers had trouble recruiting Canadians to fill their jobs. Government policies in the early 2000s kept minimum wages low, stripped workers of key protections and did little to enforce minimum employment standards and other workplace protections. These policies created jobs that were unattractive to most Canadians. Instead of making the jobs better, employers’ preferred solution was to lobby for increased access to the TFWP, thereby ensuring wages remained low and working conditions unchanged.

Any new TFW program Canada undertakes should protect the interests of workers, and not just of employers. For example, wages for any job eligible for the TFW Program should be at least 25 per cent above the minimum wage. Existing regulations that reduce wages and working conditions for any group of workers should be eliminated as a condition for hiring TFW’s, such as the exclusion of farm workers from overtime and vacation pay. The TFW Program should also be limited to meeting real, temporary labour shortages; no employer should be allowed to hire “temporary” foreign workers for more than a year.

New regulations for the TFW Program should require employers to demonstrate that they have responded to market pressures by improving wages and working conditions for Canadians before they can seek to employ temporary foreign workers. Otherwise the TFW Program creates a class of foreign workers who occupy less desirable jobs, and contributes to wage inequality in Canada.

This piece was originally published in the Vancouver Sun.