The now-expanded Temporary Foreign Workers program is a bureaucratic mess: Philip Cross in the Financial Post

Philip Cross

Philip CrossGiven the problems of its predecessor, a new plan to expand the Temporary Foreign Workers program faces a monumental task.

By Philip Cross, June 16, 2017

Earlier this week, the federal government announced an expansion of the Temporary Foreign Worker (TFW) program for high-wage occupations. The precedents for reform of this program are not encouraging. Just last month, the auditor general released an assessment of reforms to the same program made by the Conservative government in 2014. These reforms were a response to the surge of temporary foreign workers when employers in western Canada found it increasingly difficult to hire workers.

That assessment provides a textbook case of the problems in administering many government programs. The most obvious is that the surge of temporary foreign workers was disappearing on its own by the time government reacted with a proposed solution. The motivation for 2014’s tightening of the program was the perception that some employers were using it as their preferred source of labour, not a last resort after exhausting Canada’s hiring pool. However, the end of Alberta’s boom and rising national unemployment led to a 50-per-cent drop in temporary foreign workers entering Canada before the reforms were implemented. So it was unnecessary to enact a number of changes to the program that required more bureaucracy and increased costs to business. But as often happens in government, the cost of the bureaucracy and regulation remain even after the original problem has mostly disappeared.

There were also numerous problems with the implementation of the 2014 reforms. To start, the original TFW program was designed to alleviate shortages, but the concept of shortages is hard to define. Some economists maintain they don’t really exist, since any shortage can be alleviated if wages rise enough. Even in the real world, it is hard to come up with a workable definition of shortages: Bureaucrats settled on phoney statistics such as the unemployment rate in the local area or the record of layoffs by a company.

This raises the broader question of whether there was a shortage of data more than of labour. The Conservative government bought into the mantra that more statistics would shed light on the question of shortages, giving Statistics Canada $14 million to expand data on wages and vacancies. However, the auditor general found that Employment and Social Development Canada (ESDC) had no plans to use these data nor had it assessed whether the data would ever be useful, despite having consulted with Statcan on the expansion of data in 2014. The auditor general also found that ESDC was not even using data from elsewhere in its own department, ignoring employment insurance payments as a measure of whether there were local labour shortages.

Besides a lack of internal co-ordination, there was no co-ordination with other departments or levels of government. When a temporary worker’s permit expires, the Canadian Border Services Agency does not check on whether the foreigner has left Canada. And don’t even bother asking about how Ottawa co-ordinates information on labour shortages with the provinces, who play the lead role in training and educating workers, which can alleviate shortages.

It is not clear that data resolve the question of whether shortages exist in a particular local labour market. The government uses reports on layoffs as a guide to whether there are shortages, but the auditor general found that Canadians in some seasonal industries deliberately take jobs expecting to be laid off. Early in the fishing season, for example, there are plenty of Atlantic Canadian workers available and no labour shortages; but by the end of the season, many of them are receiving EI benefits and are not interested in work, leaving employers short.

As is all too often the case, some of the findings of the auditor general’s report validate why many Canadians don’t feel anyone cares about their tax dollars. It found that about 2,000 temporary foreign workers were receiving EI benefits, totaling $5 million a year. Even in, say, the case of a fire at a fish plant leading to layoffs, it is baffling how a program grants EI benefits to foreign workers whose very presence in Canada can no longer be justified (these workers should be exempted from both contributing to and receiving EI benefits).

Other findings simply show the sloppiness, lethargy and even downright deception characterizing too many programs. ESDC was granted expanded enforcement powers in the 2014 reforms, but did not use them. It did not feel obliged to investigate obvious instances where the program was used for family unification (hiring a family member as caregiver to infirm parents is a favourite tactic) because current guidelines don’t explicitly forbid that. The department outright lied to the auditor general’s office about how often it inspected worksites to check on the presence and treatment of foreign workers.

The overall picture is not pretty: uninformed policy based on willfully incomplete data, agencies working in silos ignoring readily available information, sloppy administration and a department lying about its own shortcomings. The new secretariat the Liberal government has charged with improving the delivery of federal government services faces a monumental task.

Philip Cross is a Munk senior fellow at the Macdonald-Laurier Institute.