Last Updated on January 24, 2019
A new report by the Canada West Foundation warns that the reduction in the number of temporary foreign workers allowed into Canada will only have a slight effect on provinces with high unemployment, and a disproportionately negative effect on provinces with low unemployment.
From July 2015, employers can have no more than 20% of their workforce as low-wage temporary foreign workers and this must be reduced to 10% from July 2016. But enforcing these limits across the board is unfair to western provinces, says the report, with Alberta set to bear the brunt of the changes.
The new rules have set a national target of 16,278 fewer temporary foreign workers entering the country by 2016. Employment and Social Development Canada reports that more than half of this reduction is expected to be borne by Alberta alone, with the province required to reduce new entrants by 8,407 by 2016.
Alberta’s high reliance on temporary foreign workers is set to make the impact of the reduction more pronounced in the province. On the other hand, Ontario must reduce their temporary foreign worker entries by 1,369 – one-sixth the number expected from Alberta, even though Ontario has a higher jobless rate and would benefit more from fewer TFWs arriving.
“Seventy-five per cent of the reduction in entries will come from the west,” says Farahnaz Bandali, an analyst at the Canada West Foundation. “By making everyone subject to the same cap, the West will be disproportionately hurt.”
With Alberta already facing a shortage of local workers, reducing the number of TFWs won’t necessarily result in more Canadians being hired.
“So the changes will not do what they are supposed to do, which is to encourage employers to hire more Canadians,” says Janet Lane, of the Canada West Foundation.
The report warns that the changes could have severe consequences. “Without enough workers, businesses could be forced to have shorter hours, service will suffer, workers will be stressed and businesses could shrink. Some may be forced out of business altogether.”
“In the short term, the loss of foreign workers will leave employers with limited options. Not all unemployed people are willing to take a job that does not interest them or that they are not good at. Over the medium to long term, employers may find ways to adapt by bringing under- represented populations – such as Aboriginal or disabled people – into the workforce. Governments may need to offer training and support to make this happen,” says the report.