Canadian Prime Minister, Stephen Harper recently made the statement, ‘The oil industry isn’t remotely the entire Canadian economy.’ While this is not a startling statement in itself, since production of crude oil represents just 3% of Canada’s GDP, the surprise is that Mr. Harper felt he has to state the obvious.
He pulled Canada out of the Kyoto protocol on climate change and promoted the Keystone XL pipeline that would carry Alberta bitumen to refineries in the southern United States. He has likened the development of Alberta’s tar sands to building the Great Wall of China. Canada, the fifth-largest producer of crude oil (which makes up 14% of exports), is an “emerging energy superpower”, Mr. Harper has proclaimed.
However, since June 2014 oil prices have dropped by over fifty percent leading to a shift in the engines of economic growth from western Canada to the central provinces of Ontario and Quebec, which concentrate on services and manufacturing. The weakness in the energy sector prompted a surprise cut in interest rates by the Bank of Canada on January 21st. The federal government, which usually delivers its budget by the end of March, has put that off until April at the earliest. Volatile energy markets make it impossible to predict revenue accurately, says Joe Oliver, the finance minister.
While the energy slump will boost some parts of the country, it will depress others. According to the Conference Board of Canada, oil-rich Alberta, which has grown faster than the rest of Canada for the past 20 years, will enter recession this year, predicts one.
This is the reason behind the central bank’s decision to reduce the target for its key interest rate by a quarter of a percentage point from 1%, its level since September 2010. This has puzzled the financial markets since core inflation stands at 2.2%, well within the bank’s target range. Lower rates could encourage consumers, who are already carrying record levels of debt, to take on even more. Stephen Poloz, the central bank’s governor, acknowledged the risk but argued that the recession in the oil industry made it worth taking. He fears that the loss of jobs, investment and export income from the energy sector will eventually spread to other parts of the economy. He said the rate cut was similar to taking out an insurance policy.
Ontario and Quebec, which account for over half of Canada’s GDP, are home to large manufacturing industries, such as cars and aerospace, which have long complained that the oil-fuelled rise in the Canadian dollar was damaging their competitiveness. The currency has fallen by 15% against the American dollar since June, giving exports a boost, and may weaken further because of lower interest rates. This combined with strong growth in the United States, Canada’s biggest trading partner, bodes well for manufacturers.
There are two threats to Mr. Harper’s campaign plan. The first is that, as the central bank fears, the petro-plunge will pull down growth overall. The second is that the economy will continue to do relatively well but that the Conservatives will not get credit for it.
Mr. Harper is a skilled political scrapper; he may well find a way to turn the shift away from oil-led growth to his advantage.
The continuous rise of property prices in Vancouver led Canada to cancel its popular immigrant investor program last year, as it was believed that foreign purchases of property was causing the price rise. However, even ten months after the scrapping of the IIP, the property price rise has not halted, and neither have the rich investor immigrants stopped arriving in Vancouver.
There are number of factors behind the continuing inflow of investor immigrants into Vancouver. For one, under the program the candidates were given up to a year to activate their permanent residency after they had undergone their medical assessments. Moreover there were several approved immigrant investors who had not undergone the medical checks at the time IIP was scrapped on February 11, 2014, implying that their arrivals in Canada could stretch to another year. And finally, there are also a few applicants who were granted residencies on or after February 11, but before June 19, when IIP was legally removed. It is predicted by immigration experts that most of these investor immigrants from the previous program would have arrived in Canada by mid-2015.
However, in addition to this backlog of IIP applicants, several new investor immigrants will also continue to arrive in Vancouver through Quebec’s still functional version of the IIP. It has been reported that many potential investors have in the past used Quebec’s program to get entry into Canada, migrating from Quebec to other provinces upon arrival.
Statistics show that between 2008 and 2012, about 27,490 permanent residencies were granted under the Quebec IIP. However, the majority of these investors did not settle in Quebec as promised and most ended up moving to Ottawa, with 89% of Quebec’s investor immigrants showing non-Quebec residential addresses when they renew their permanent residency cards after five years.
The issue had become quite obvious, leading to Jason Kenney saying in 2013 parliamentary committee that Quebec’s immigration program should not be « about taking money from Chinese millionaires so that they settle in Vancouver ».
« Quebec is taking the money of immigrant investors and using it, but the British Columbia taxpayers must pay the price for the social services provided to immigrants selected by Quebec, » he had said.
It is expected that in 2015 Quebec will accept 1,750 primary investor immigrants, representing a total of 6,200 people, including family members. If 89% of these new arrivals were to relocate in five years, it means that about 5,500 immigrants will move to other provinces. Considering that 68% of applicants wanted to move to British Columbia when IIP was fully functional across all provinces, Vancouver might receive a similar percentage of these 5,500 investors in the coming years.
This indicates that despite the scrapping of IIP at the federal level, Quebec’s running investor program will contribute in a big way to steady arrival of rich immigrants into Vancouver. In fact the total number of arrivals in BC may not even be halved but rather at most be reduced by a third compared to previous levels.
A Canadian court has reversed the ban on niqabs or face veils worn by women taking Canadian citizenship oaths. The ban on the niqab was introduced in 2011 and had attracted much controversy with critics calling it « unlawful » as it restricted one’s freedom of religion and was against Canadian values.
In January last year Zunera Ishaq from Pakistan challenged the ban and refused to remove her niqab, saying it violated her religious beliefs. « [The] policy required her to unveil in public when there was truly no need, simply because the niqab did not please the [former Citizenship and Immigration Minister Jason Kenney], » said Naseem Misthoowani, the lawyer representing Ishaq. « My client feels very strongly that this set a dangerous precedent and the Canadian government has no role in dictating to women what is, or is not, a morally acceptable dress code. »
In the recent ruling, the court said that the government had gone too far by implementing the ban on wearing face veils during citizenship oath ceremonies, and said the ban hindered the citizenship judge’s legal obligation to make sure that the « greatest possible freedom » is given to people taking the Canadian oath of citizenship.
The veil or niqab is a garment worn by some Muslim women and covers the entire face barring the eyes. The government believes that it obstructed judges from recognizing people taking the citizenship oaths, and the ban was an attempt to make the new citizens follow Canadian norms. The government had even refused to consider holding separate ceremonies for women wearing the niqab so that they could unveil only in front of a female judge. « While the government of Canada values the diversity that people of all origins bring to the country, it is reasonable to expect citizenship candidates attending a public civil ceremony to show their faces while reciting the oath, » read a statement issued by the Citizenship and Immigration Ministry.
However critics of the ban say that it reflected « contempt for Canadian values ». Many believed that instead of encouraging integration, the ban created more division amongst people and was likely to make people less likely to « want to belong to a society or to a community that doesn’t accept them ».
According to Audrey Macklin, a law professor from University of Toronto, the verdict is « a nice reminder that actually the status quo in our law was to respect people’s religions, and what the government would have to do then [to implement the ban] is change our law to remove that respect. »
Canada’s Muslim community, however, is divided on the issue of banning the niqab. The ban was supported by the Director of the Muslim Canadian Congress, Munir Pervaiz, who says that Islam does not require women to wear the burqa or niqab. He believes that wearing niqabs could create « exclusion within an inclusive society and we believe that it is wrong. »
On the other hand women who wear niqabs feel that such bans encourage discrimination against them. They say that while it is reasonable to ask women to unveil during identification checks, it was not required during oath ceremonies. « So as long as the woman is not harming anybody or anything by her actions I don’t think that it should be banned, she should be allowed to dress as she sees fit, » says Farhana Lakhi, a resident of Toronto, who wears the niqab.
The Canadian government is appealing the ruling.
In June last year many changes were made to Canada’s temporary foreign worker (TFW) program in an attempt to address the concern that foreigners were taking away jobs from the Canadian people. As a result of these changes, several foreign workers now face an April 1 deadline to leave Canada, with their employers scrambling to find suitable replacements to fill in for them.
Experts believe that overhauling of TFW program might benefit a few regions in Canada, however it is most likely going to harm Alberta’s economy. In an attempt to soften the effects of the harsh measures, the employment ministry offered a minor reprieve to the program, allowing a one-time work permit extension for certain temporary foreign workers in Alberta. This exemption will be provided to those temporary workers who had made their applications under the Alberta Nominee Program before July 1, 2014, and meet the permanent residency requirements.
This adjustment will allow employers to retain some of their employees who had been working for them for the past four years, thus averting a looming labor shortage crisis. However, even though this measure may provide some respite to employers in Alberta, it fails to address the long-term need of businesses to find a consistent and reliable pool of low-skilled employees.
For instance, according to the revised rules of the TFW program, the employers will have to limit the numbers of temporary foreign workers to 10% of their workforce, which implies that the above exemption might not apply to many ‘waiting’ permanent residents who would therefore not be counted as TFWs despite belonging to low wage category.
Moreover, many low-skilled workers are in service jobs, while some are employed in high-demand jobs like driving trucks. For all of them, the Alberta Immigration Nominee Program is the only way to gain permanent residency, however, it is very likely that only those who are in high demand jobs or high skilled jobs and have strong language skills will qualify for the work permit extensions. Thus despite the reprieve, many TFWs will be leaving Canada from 1st of April, forcing Alberta’s employers to search for people who are willing to do the low-paying jobs of serving food and cleaning. While this leaves the door open for many Canadians to take up these jobs, it remains to be seen how many are willing to do so and therefore fill the urgent requirements of the businesses.
The figures for 2013 show 40,471 TFWs working in Alberta across different occupations. 75% of TFWs who entered Alberta in 2013 were working in low-wage positions. According to the new rules, Alberta can accept only up to 5,500 provincial nominees annually. There would be thousands of applications for this annual quota, from which the government of Alberta will have to choose suitable candidates for both low-skilled jobs that don’t find many Canadian takers as well as for high demand and highly skilled jobs. This will be an arduous task, and whatever the outcome, is likely to adversely affect Alberta’s businesses.
Immigrations experts feel that the new rules may not be viable for Alberta’s economy and the federal government may end up having to take further steps in the coming months to fill the gaps in the labor market that may emerge in the near future.
New rules relating to immigration to Quebec are hindering universities in their efforts to hire highly-qualified international professors. Most notably, the French language requirement is posing a serious obstacle in attracting foreign talent, as many otherwise talented candidates do not meet this condition.
Quebec’s complicated points-based immigrant entry system puts the province’s universities at a disadvantage compared to other Canadian and American universities, say academics from Quebec’s English-language universities.
The French language requirement for permanent residency in Quebec was raised in 2013. Ghyslaine McClure, associate provost at McGill, says that her university is finding it increasingly difficult to recruit good professors for research chairs as candidates who are above 40 years of age are not very keen on taking French classes in addition to their research work duties.
In addition, the immigration process requires a lot of paperwork before a candidate can move to Quebec. « We would like a special recognition that university professors are highly specialized workers and they should not have that many obstacles. Professors and other eminent specialists are a different ball game, » says McClure.
There is some respite for professors with PhDs, however. The government modified the rules in December to award « points » to candidates holding PhDs, which might allow them to skip the French requirement.
Concordia University’s journalism professor Stanton Paddock is happy with this respite. Paddock says he panicked upon learning that he needed to learn a lot of French in order to move to Quebec back in 2013, but now he believes his PhD may help him bypass the requirement. For many professors, obtaining permanent residency is very important as several universities and institutions do not grant full tenure without it.
For candidates fluent in French, the new rules are not much of a hindrance. « Learning French was part of the reason I was excited to move here. I enjoy the language (but) I can imagine for people who don’t have that background it would be onerous, » says Emer O’Toole, a professor at Concordia’s School of Canadian Irish Studies, who had studied French before coming to Quebec.
O’Toole says that the French requirement has been made necessary because Quebec wants to protect the importance of its language. « It’s very likely (without the protections) French would lose its hold and stop being the primary language in Montreal, » she said.
Quebec’s Immigration Minister Kathleen Weil has said that she would be hearing recommendations to improve the province’s immigration system. She said that the government wanted to assimilate immigrants into a French-speaking workforce, but understood that the French language requirements were hurting many business groups. « Employer groups have raised the issue about language requirements, should we relax
them or not. The overall opinion (of the government) is that we need to be very careful and it’s important to have people speak French, » she said.
Recent changes to Canada’s immigration regulations that came into effect on January 1st, 2015 have placed international graduates from Canadian universities at a disadvantage. Many were seeking to qualify for Canadian permanent residence. In the past, foreign students with work experience in Canada enjoyed an advantage over other applicants when seeking permanent residence. The new rules will also make it tougher for Canadian universities to recruit foreign students. The open system of residence after graduation was one of the factors that attracted 200,000 foreign students to postsecondary institutions in Canada in 2014.
Under the new rules, foreign students who hold a degree or diploma from Canadian educational institutions will be treated on par with other groups of skilled workers. All economic class candidates will form part of the pool from which Citizenship and Immigration Canada will issue invitations offering permanent residence. In the past, students were not required to compete with other groups of skilled workers when seeking permanent residence.
The Express Entry Pool, which forms the core aspect of the Express Entry system, has been established to reduce application times, and to facilitate improved connections between Canadian employers and employees intending to apply for permanent residence.
Invitations are issued on the basis of a ranking system based on the number of points earned by an aspiring immigrant. The maximum score is 1200 points. A Labor Market Impact Assessment which indicates the absence of a Canadian worker available for the position will enable the applicant to score 600 additional points. Other factors like education and age count for 600 points. The first two cohorts invited by the Ministry to apply for permanent residence had a cutoff of 800 points. Since students don’t qualify for a LMIA, they cannot avail the 600 points.
Students are likely to be hurt the most by the new system as those with very little work experience will find it difficult to prove that there is no native Canadian who can perform the task in question.
While students can seek permanent residence through Provincial Nominee Programs, tens of thousands of students who have entered through the Federal program cannot get transferred to provinces without complicated negotiations.
Provincial programs accord higher priority to permanent residence applications made by international students holding credentials from a Canadian postsecondary institution along with professional work experience. Ontario’s 2500 spots under its PNP are filled primarily by international students.
The Express Entry Immigration system, announced in detail in early December, is expected to have a very negative effect on those students who had planned on relying on favourable policies designed to help post-graduate students obtain permanent residence. These policies had been framed on the basis of findings that indicated that such students were most likely to adapt to life in Canada.
Many recent graduates sought to bypass the new rules by submitting their applications early. In December, the CIC had indicated that thousands of spots under the old regulations were still available. However, many fall graduate applicants learned that their applications were rejected on the ground that the quotas for Canadian Experience Class, the category under which they previously qualified, had been reached in October 2014. Now, these students are required to apply under the new regulations. Most will unlikely qualify unless they can meet provincial nomination programs.
Interestingly, many students who were hopeful of applying under the old rules were devastated to learn that the authorities had committed a mistake by indicating the availability of thousands of spots under the old rules. With students spending in excess of $100,000 towards their education in Canada, the premise under which they made such decisions has been vacated.
There are hopes that criticism of the functioning of the Express Entry system may result in changes that could include a reduction in the score required for a graduate student to be invited to apply for permanent residence. Until then those who had opted for Canada over the US or the UK due to the relatively ease to acquire Canadian residence, will have to just wait and watch. Canadian education institutions will likely share in this process.
Attorney Colin Singer Commentary:
Canadian immigration policy analysts have worked closely with the education industry to build Canada’s international reputation. It is clear that the Immigration Ministry is causing substantial harm to the industry with the new Express Entry regime.
Experts have warned that Alberta, which accounts for 26% of the country’s employment growth, may face a shortage of up to 96,000 workers by 2023 due to the changes introduced in the Temporary Foreign Workers Program in June 2014.
Alberta’s unemployment rate stands at just 4.7% and it even has 100,000 workers from other provinces. With the new changes, the province stands to lose thousands of foreign-born prospective Canadians who have been working across various industries in the province. Alberta’s provincial minister of jobs, skills, training and labor, Ric McIver, has been advocating to increase the annual immigrant quota of the province, which reached its cap of 5,500 in November last year. Additionally, there is a backlog of 10,000 applications nominated by employers for permanent residency, leading to a pause on temporary workers being nominated by their employers.
Under the revised rules employers must cap their total foreign worker force at 10% of the company’s work force, with a $100,000 fine imposed on employers who fail to follow the new rules. This has shocked many of Alberta’s businesses that heavily relied on foreign workers and are now struggling to cope. About 15,000 foreign workers now face deportation despite abiding by the rules and having immaculate employment records. Most affected are low-skilled workers in the food service industry who would not stand much of a chance to qualify under the new federal Express Entry system.
The list of trades that will be severely affected by labor shortage in Alberta includes food service chefs along with crane operators and various engineering professionals. The fact that the food chefs will no longer be allowed to stay on may affect the food industry unduly hard.
It is estimated that the economic impact of the closing down of one restaurant business amounted to a loss of $336,000 to an Alberta rural community as a result of the loss of rent, sale of insurance, gas, and day-to-day amenities to the employees of the business. It is estimated that the total economic loss of denying immigration to 15,000 workers in Alberta may be up to $89 million.
Experts also warn that the new rules will impose a huge social-economic cost to Albertan economy, and both employers and workers are in dire need of a viable solution to the crisis they face. Even though the government has provided some reprieve in the form of a one-year bridging program for some temporary foreign workers, it is likely to only help professionals and not the lower skilled workers.
Last month saw 779 applicants qualify under Canada’s newly introduced Express Entry immigration program, accounting for 26% of the total 3,000 applicants who entered the draw for the scheme. The successful candidates are said to have achieved 886 points or more out of a maximum of 1,200. A second draw held earlier this month also selected 779 candidates, all of whom had scored 818 points or more.
While Citizenship and Immigration Minister Chris Alexander is pleased with the numbers, critics of the program are calling for a revision of certain conditions under the program, especially the Labor Market Impact Assessment (LMIA) requirement worth 600 points, which they say is very difficult to acquire.
Prospective employers are now required to secure a positive LMIA to prove that the foreign applicants they have chosen have skills that are in high demand, and unavailable to them locally. While an LMIA is worth 600 points alone, candidates can score another 600 points through categories like age, education, work experience and language skills.
Critics have pointed out that the LMIA requirement is unfair because it has become too difficult to secure one as the screening process has been tightened further recently.
The Express Entry system has a two-step selection process where selected applicants are put in one pool and then the highest scorers are invited to apply for permanent residency. There were about 10,000 applications for the first draw, out of which 3,000 were entered into the pool. According to experts, the pool of applicants should be widened and some people must be exempted from the LMIA requirement. This is especially the case for those who have graduated from study programs in Canada and currently hold postgraduate work permits and those who are here under exempt categories, such as NAFTA professionals and intracompany transferees.
Under the new system, the government matches employers with prospective candidates through the Canadian job bank, a move that has discomforted several employers who now have to advertise the positions in a job bank to fulfil the LMIA requirement, even after already having made a job offer to a prospect.
Another issue with the system is its apparent lack of transparency, with no explanation being provided on how cut-offs are set.
The selected candidates have 60 days within which they must apply for permanent residency. If they fail to do so, their applications will remain in the pool for another six months for future draws. The government has planned between 15 and 25 draws for this year.
Canada’s job market is expected to see a flat growth rate, with oil companies shedding jobs as other sectors create new ones. The layoffs in the oil sector are going to significantly impact the unemployment rate in the province, say experts.
The Canadian economy has been nearing recession in Alberta due to collapsing prices of oil, pushing the employers into uncertainty about future job hires. As a result, self-employment and part-time jobs are on the rise, as people hold on to alternatives while waiting for full-time employment.
Economists at the Conference Board of Canada have said that job seekers might have to wait until 2016 for « solid employment opportunities ».
« This is only the beginning. As energy producers cut back on investment this year, there will be ripple effects throughout the entire economy, eventually hitting the construction sector and other services that depend heavily on the oil and gas sector for business, » said David Madani of Capital Economics.
The Conference Board also believes that hiring will be overtaken by layoffs in the coming months, and the unemployment rate may increase to 6.9% by mid-year.
However, Bank of Canada policymakers are optimistic that a depreciated dollar could provide some reprieve through increasing employment in Ontario and Central Canada, where the lower currency is expected to benefit exports. But this hasn’t convinced industry experts, who believe that Ontario will not be able to bounce back to industrial success by end of this year.
According to Rafael Gomez, economist at the University of Toronto, the job market can improve only if there is sufficient economic growth. « If you have a high-growth economy, we’re talking growth of not a meagre one percent or even two, but like four, then you might generate enough firms that are new and growing and would be hiring, » says Gomez. « That’s the only way we’re going to see a turnaround in employment numbers in that sector; is if growth basically tripled from its current rates. And it’s not going to. »
The Canadian economy is expected to grow at a rate of 1.9% this year, according to the Conference Board. « We’ve seen no pickup in investment yet. There hasn’t been any sign that it’s taking hold. Unless [Central Canada] starts attracting more investment, we’re not going to see a big pick up in the number of jobs, » says Matthew Stewart, Conference Board economist.
Another concern for the job market is the steadily declining rate of business profits, which is shown to have an adverse effect on employment levels. The commodity price index of the Bank of Canada has declined by an alarming 36% in the past few months, and this has caused a lot of worry among businesses whose profits have a strong correlation with the index.
Many energy and non-energy firms have been reporting a decline in profits, and even losses. Insurance firm Manulife has reported a 50% decline in earnings last week. « Unless oil prices rebound more substantially soon, that could reduce profits by as much as 30 per cent. On that basis, investment would decline sharply, » says Madani.
Madani believes that if investment declined by 10%, it will put the economy into recession. However, he is hopeful that certain positive factors might reduce this risk. « The improving US economy and lower Canadian dollar should aid exporters, supporting investment in certain sectors other than energy. »
While exports may be expected to benefit with the lower dollar, which may also improve Ontario’s declining share of investment, this will not help create more jobs. All it does is fund technological advancements, especially in the auto industry. « Every year we’ve been subsidizing the big auto manufacturers, they’ve been shedding jobs every year whether they’ve been making profits or not, » says Gomez.
The trouble in the job market is also going to affect Ottawa’s decision on whether or not to invest in public infrastructure, which has been neglected for several years. Finance Minister Joe Oliver had been urged to invest billions of dollars into public works in order to up the employment rate, but has been reluctant to do so for fear of losing federal surpluses beyond a point. « This is precisely the wrong time to launch a massive deficit program that would undermine investor confidence, erode our credit standing, weaken our ability to withstand further international shocks, add to our debt burden, reduce our ability to support social programs and burden our children with our expenditures, » the minister said.
New measures are coming into effect from 21 February that will impose additional fees and restrictions on Canadian employers looking to employ certain types of foreign workers. The Canadian federal government announced the move after reviewing several scandals the sector has seen in recent months.
The new rules will apply to intra-company transfers, employees entering Canada under NAFTA, employers hiring through the International Mobility Program, and employees hired through reciprocal agreements with other countries, like working holiday schemes.
Under the new rules, Citizenship and Immigration Canada requires employers to pay an « employer compliance » fee of $230, and provide details about their company or organization as well as the original offer of employment, in order to be allowed to hire a foreign worker without a Labor Market Impact Assessment (LMIA). An extra $100 fee will apply to employees in possession of work permits.
In a statement, CIC has said, « The fees collected will offset the cost of introducing robust employer compliance activities featuring inspections of thousands of employers. »
Experts warn that the new rules may go against NAFTA conventions, and could also significantly hamper business operations throughout Canada, while critics argue that the system has not been explained properly and lacks transparency.
However the federal government has defended the changes by highlighting some of the abuses of the previous programs carried out by employers over the past few months. In one case, employers brought skilled Irish workers using work-holiday visas in order to get around the LMIA precondition. In another case, the Royal Bank was found to have used the intra-company transfer system to apply for visas for Indian workers to replace their Canadian employees in 2013.
According to the CIC, employers could now face substantial penalties if they are found to bring in foreign workers using false declarations.
The new rules are an attempt to apply the same level of scrutiny to foreign workers exempt from the labor market assessment as temporary foreign workers are subjected to. Statistics show that foreign workers entering Canada without a labor market assessment under the International Mobility Program have outnumbered temporary foreign workers, with almost 140,000 workers coming to Canada through the International Mobility Program as opposed to less than 85,000 temporary foreign workers.
Elaborating on the changes, a spokesman for Immigration Minister Chris Alexander said, « Our government is committed to reforming its work permit programs to encourage the hiring and training of Canadians, limit the use of foreign workers in Canada to those situations where it is a benefit to Canada, and ensure that abuses of the program or of foreign workers by employers will be detected and dealt with. »
Despite criticism that the changes have been announced without sufficient stakeholder consultation, union organizers who helped expose abuses of the International Mobility Program have welcomed the changes as an attempt by the government to rectify the problems with the current system.