Canada’s Temporary Foreign Worker Program needs deep reform

Conservative Leader Pierre Poilievre made political headway calling for the Temporary Foreign Worker Program to be scrapped, making Prime Minister Mark Carney look like he was caught in the headlights.

At a cabinet retreat on Sept. 3, Mr. Carney told reporters that businesses are always telling him they need access to workers, and added, “We must keep this program.” A week later, he was emphasizing that there will be reforms to the program.

This shouldn’t be so hard.

Over the years, a program that was supposed to about dealing with the exceptions ended up as one that made exceptions the rule. That has to be fixed.

The TFW program was supposed to be there for relatively rare cases when a Canadian worker could not be found to do a job. Instead, it became an easy way to recruit workers. Things went downhill into fraud and exploitation.

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Mr. Poilievre likes easy-to-understand blanket policies, but his is still a touch too simple for the real world.

There needs to be some way for an employer to recruit for a persistently unfilled, well-paid, value-adding job that makes the economy more productive.

But the TFW program definitely has to be pushed away from Mr. Carney’s first instinct – the idea that governments should provide businesses a plentiful supply of labour.

The thing to do is to make the program about exceptions.

Fortunately, some of the program is shifting toward that now, anyway. Processing of applications for the low-wage stream of the TFW program has been halted – with some exceptions – in 26 metropolitan areas where the unemployment rate is above 6 per cent, according to Employment and Social Development Canada.

It would be better to simply scrap the whole low-wage stream, with limited exceptions, and then revamp the rest of the program.

It’s important to note that most temporary workers don’t come to Canada under the Capital-T Temporary Foreign Worker Program. About five times as many work-permit holders get them under the International Mobility Program, including many former foreign students who became eligible for work permits after graduation.

The government made changes last year to both programs to put the brakes on the surge of temporary residents that had fuelled rapid population growth between 2022 and 2024. The increased supply of workers caused most of the softening in the job market, said Robert Kavcic, senior economist at BMO Capital Markets.

Earlier: Poilievre calls for federal government to end temporary foreign worker program

But the TFW program has its own set of problems.

In order to be able to offer a job under the program, an employer has to get a document called a Labour Market Impact Assessment from the government. An LMIA is supposed to certify that a Canadian worker can’t be found to fill the job.

For most low-wage jobs, that’s a flawed concept from the get-go, because many would be filled if the salary was raised. In recent years, LMIAs have been regularly used to hire cooks, cleaners and so on. Importing minimum-wage workers en masse from abroad is a good way to lower Canada’s standard of living.

The LMIA system has also been riddled with abuse.

Until recently, temporary foreign workers working under an LMIA, especially those in higher-wage, in-demand jobs, could also get a lot of points toward permanent residence. That added to the value of an LMIA. So some employers started to sell them for tens of thousands of dollars.

Immigration lawyer Michael Greene, the senior partner at Calgary law firm Sherritt Greene, said it became clear there were lots of abuses. Some employers claimed to pay $22 an hour but only paid $17 an hour, for example. Sometimes there was no actual job.

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There were many complaints, Mr. Greene said, but not a lot of enforcement, and enforcement typically led to a worker being deported, rather than an employer or consultant being charged.

Mr. Greene doesn’t think all those problems have been fixed. But the numbers have been capped, so it is a lot harder to get an LMIA. Even so, a crackdown is not going to solve the problem.

The LMIA system has been shown to be broken. Many employers were able to get them for jobs that shouldn’t be that hard to fill. There isn’t enough enforcement to discourage abuses.

It needs to be redesigned to get away from the idea of supplying businesses with all manner of workers and focus on the truly hard-to-fill, especially high-value jobs.