THE STANDING SENATE COMMITTEE ON SOCIAL AFFAIRS, SCIENCE AND TECHNOLOGY
EVIDENCE
OTTAWA, Wednesday, October 4, 2023
The Standing Senate Committee on Social Affairs, Science and Technology met with videoconference this day at 4:15 p.m. [ET] to examine and report on such issues as may arise from time to time relating to social affairs, science and technology generally.
Senator Ratna Omidvar (Chair) in the chair.
The Chair: I would like to begin by welcoming members of the committee, witnesses and members of the public watching our proceedings. My name is Ratna Omidvar, senator from Ontario, and I am the chair of this committee.
Before we begin, I suggest we do a round table and have senators introduce themselves to our witnesses and the public, starting with the deputy chair of the committee.
Senator Cordy: My name is Jane Cordy, and I’m a senator from Nova Scotia.
Senator Greenwood: My name is Margo Greenwood. I am a senator from British Columbia and my homeland is Treaty 6 territory.
[Translation]
Senator Cormier: René Cormier, from New Brunswick.
[English]
Senator Osler: Gigi Osler, senator from Manitoba.
Senator Burey: Sharon Burey, senator for Ontario.
Senator McPhedran: Marilou McPhedran, independent senator for Manitoba.
[Translation]
Senator Mégie: Marie-Françoise Mégie, from Quebec.
[English]
Senator Dasko: Donna Dasko, senator from Ontario.
The Chair: Today, we continue our study on Canada’s temporary and migrant labour force. Joining us for the first panel, we welcome, by video conference, Mohammad Qadeer, Professor Emeritus, Department of Geography and Planning, Queen’s University; Mikal Skuterud, Professor in the Department of Economics, University of Waterloo; and Jim Stanford, Economist and Director of the Centre for Future Work. Thank you very much for taking the time to talk to us today. You’ll have five minutes each for your opening statement, followed by questions from our members.
Professor Stanford, let’s begin with you.
Jim Stanford, Economist and Director, Centre for Future Work: Thank you very much, senators, for the invitation to join you today. I’m Jim Stanford, Economist and Director of the Centre for Future Work, which is a labour economics research institute, with offices in Vancouver and in Australia.
I want to stress at the outset that my expertise — relevant to your inquiry — is as a labour economist. I have some high-level understanding of the implications of immigration policy for labour supply and demand trends and analysis, but I’m not an expert on immigration policy per se. I will limit my remarks and contributions to the issues around labour market balances and imbalances, and how they provide a context for immigration policy.
In particular, I want to directly and forcefully challenge the assumption that Canada has faced, and continues to face, a so-called labour shortage. We have heard that argument from employers and employer organizations for years, even before the pandemic. Employers from certain sectors — retail, hospitality and the small business sector — complained loudly that they cannot find enough workers to do the jobs that they were advertising at the wages that they were offering. Many different reasons have been advanced or hypothesized for this alleged labour shortage: demographic change and the aging society; the idea that somehow consumer spending or aggregate demand in Canada is overheated and excess relative to our productive capacities; or even a lack of work ethic and commitment on the part of individual workers, perhaps because they became lazy and accustomed to public income support.
I think that all of those assumptions are wrong. The policy implications that have been advanced by those accepting the labour shortage hypothesis include reductions in income support programs to reinforce this supposed incentive to work, as well as deferment of the retirement age to keep people in the labour force for longer in their lives. Efforts to curtail labour demand have actually increased unemployment, as we’re seeing from the Bank of Canada these days, and — relevant for this inquiry — there are calls to open up immigration flows to Canada, particularly through the various temporary permit channels for temporary work, as well as to study and others.
I think that this hypothesis is wrong, and, therefore, the implications for immigration policy are misstated. Labour force in Canada has continued to grow. In fact, the growth of the labour supply in Canada has accelerated in the period since the pandemic, in large part because of more liberalized immigration flows — particularly those temporary work permits that we discussed. Overall, labour force participation has remained remarkably stable in Canada over recent decades, despite the demographic aging of society, and it continues to hover around 65%, fully recovering — this is for the whole working-age population, defined as those over aged 15 — and in the core working-age population, between aged 24 to 55, labour force participation is at record highs.
One of the reasons overall labour force participation has remained so strong is the growing labour force participation of older workers. Beginning around the turn of the century, labour force participation by those over aged 55 has grown strongly. It now rests between 35% and 40% of all those over aged 55.
Contrary to the assumption that the population is getting older and that’s why we’re running out of workers, the fastest growth in a working-age population cohort that we’ve experienced in Canada in recent years has been among younger workers. We’ve seen the population of 15- to 24-year-olds grow by over 4% in the last year — 2.5% for all of the over-15 working-age population.
The idea that there’s a labour shortage is also contradicted by the behaviour of wage trends in Canada. We’ve seen a decline in real wages, on average, in Canada since the reopening of the economy after the pandemic, in large part because of the inflation surge at that time, but if something were genuinely in short supply, it should become more expensive and not less expensive.
We have continued unemployment in Canada. The official rate is 5.5%, which translates into 1.2 million unemployed Canadians. That’s an increase over the last year from July; it is up by 170,000. That alone is evidence that we’re a long way away from full employment or a true labour shortage. Moreover, that number understates the true underutilization of labour in our labour market. If we included underemployment and people [Technical difficulties] who work, and those who have a desire to work but are not ticking all the boxes that Statistics Canada requires them to tick in order to qualify as officially unemployed, that number would be bigger.
The whole concept of labour shortage, in my judgment, is an upside-down idea and reflects a very employer-centric view of the world. In fact, economic policy should prioritize full employment as a central macroeconomic goal. If you have genuine full employment — whereby anyone who wants to work could find a decent job, and find it quickly — employers would complain about a labour shortage; they absolutely would. They prefer a situation where they can advertise a position, and get many willing and qualified applicants applying the next day — some of them offering to work for less than the advertised wage. That is the desire of employers, and that’s one reason why employers have called for measures, including liberalized temporary immigration, in order to recreate a situation that is more to their liking. We can see that happening today; we can see rising unemployment in general, but for particular cohorts of the labour market, we see large numbers of desperate people lining up to take low-wage jobs at places like Walmart —
The Chair: Mr. Stanford, I’m sorry for interrupting. Thank you very much. We look forward to asking you questions.
Professor Skuterud, please go ahead with your five minutes.
Mikal Skuterud, Professor, Department of Economics, University of Waterloo, as an individual: Thank you for inviting me.
In addition to being a professor of economics, I am the Director of the Canadian Labour Economics Forum, as well as the Roger Phillips Scholar of Social Policy and a Fellow-in-Residence at the C.D. Howe Institute.
For 20 years, my research has been focused on the economics of Canadian immigration. Most of that work is published in peer-reviewed academic journals. On my website, you can find my disclosure statements. In that document, I state:
In my role as a researcher, I deliberately avoid advocacy, as I believe I can contribute more by seeking and disseminating objective evidence than in advancing agendas. For this reason, I have throughout my career declined funding from organizations with explicit advocacy mandates or private interests.
In 2015, a political narrative about the economic potential of heightened immigration levels began to surface in this country. The claim was that increasing immigration rates would be a tonic for Canadian economic growth. For academic economists like me, who — for decades — have been studying the economic integration challenges of Canada’s newcomers, this claim is naive. Together with Professor Chris Worswick from the Department of Economics at Carleton University and Professor Matthew Doyle, a macroeconomist at the University of Waterloo, we’ve written a non-technical and broadly accessible paper to address what we see as a hyperbolic and risky political narrative. We would be thankful if the members of this committee took some time to read it.
While there’s no question that heightened immigration rates can boost the overall size of the Canadian economy, what matters for economic well-being in the population is the size of the average slice of the economic pie when it’s divided between all Canadians, including our newcomers. As we make clear in our paper, there’s good reason to believe that increasing annual immigration rates from 0.8% of the population — as they were in the first two decades of this century — to well over 2%, as we’re now seeing, has the potential to not only lower GDP per capita, but also, and perhaps more troubling, to increase economic inequality. Indeed, adjusting for inflation, GDP per capita was lower in the second quarter of 2023 than in the second quarter of 2018.
We are getting poorer. What explains this?
A key difference between rich and poor countries is the amount of capital available per worker. Capital is what allows workers in a population to be productive. It’s schools; hospitals; housing; factories; office buildings; roads; bridges; power stations and power lines; equipment and machinery; and the intellectual property that drives innovation and productivity. It’s the technology that allows me to communicate with you from my office in Waterloo and quickly move on to my teaching tasks as soon as I’m done here.
When the population grows at 2% and the capital stock grows at less than 2%, there’s less capital for each of us to use. That lowers how much each of us can produce on average and, in turn, lowers average living standards. This diluting of the capital stock makes us poorer.
On the other hand, immigrants bring human capital — their skills and their talents — which has the potential to raise average labour productivity. But what we’re seeing now is a clear shift in Canadian immigration policy away from prioritizing human capital to plugging holes in labour markets with lower-skilled workers. This is evident in the growth of the low-wage stream of the Temporary Foreign Worker Program and in the new category-based Express Entry draws. There’s no question that this shift is good for the profit margins of businesses that rely upon these workers; it’s not good for growth in GDP per capita or economic inequality.
Somehow, politicians in this country have been convinced that labour shortages are a first-order economic problem that governments need to solve when, in fact, labour shortages are an opportunity to incentivize businesses to get more out of their existing workers through training and technological investments, and to weed out businesses that can’t compete. That’s good for labour productivity and economic growth.
For decades, Canada has simultaneously enjoyed high immigration rates and strong public support for high immigration, but if we don’t manage the system responsibly, we threaten that public support. As an immigrant who was embraced by this country when I came here with my family in 1979, in my view, that is the ultimate cost of the direction I see Canadian immigration policy moving in.
Thank you for the invitation, and I’m happy to take questions.
The Chair: Thank you, Professor Skuterud. You were bang on time.
Dr. Qadeer, please go ahead with your five minutes.
Mohammad Qadeer, Professor Emeritus, Department of Geography and Planning, Queen’s University, as an individual: Thank you very much, senators and witnesses.
I’m a city planner. I’m not very active in doing research in the conventional sense. My work is mostly in multiculturalism, and how people who come here adjust. I have a book on multicultural cities. I have done some other work. These days, most of my work is synthesizing information from various sources, including anecdotes about what I experienced living in Toronto.
I am one of the immigrants — probably one of the oldest. I came here in 1971. I have spent more time in Canada than in my home country, so I don’t know how I’m an immigrant.
First, my viewpoint is that the labour market is part of the social organization. You cannot detach that. Labour is not a commodity. They come — they’re human beings — and they have other needs, as we experience every day, such as newspapers, housing, infrastructure, health care, et cetera.
The second point I want to make is that today’s labour markets are not bonded anymore; they are not territorially bonded. They are now diffused. For example, I get calls in my home — while sitting here — from the Philippines for holiday reservations. Similarly, I personally know people here in Canada — in Pickering — who are working for a company in Saudi Arabia. The boundedness of the labour market is breached.
The third part is that labour markets are also subject to business cycles. I have been a professor for almost 45 years, in various capacities, and at Queen’s University, I have seen — at different times — different skills going in and out of demand, including mining engineering at one time, and mechanical engineering in the 1990s; there was an excess of teachers, and now there is a shortage of teachers. To base labour immigration on all of these business cycles — and what the need is at any one moment — is wrong.
Like the previous two witnesses said, the large-scale bringing in of immigrants, migrants and temporary workers is not optimal. It is not needed. Some may be needed, but it has to be very clearly monitored and maintained.
In regard to migrants and recruitment, particularly of temporary workers, the government has opened so many challenges: students, full-time work possibilities, racial quotas and so on. Temporary workers are now an issue. That policy requires the real thing: what temporary workers should do, and how many we need.
New workers and new immigrants, as well as temporary workers and student workers, all compete with, interestingly, previous immigrants who came 10 or 15 years ago, or the second generation of immigrants. Therefore, the problems are felt as much by the various cycles of immigrants as by, let us say, third-generation Canadians. That has to be kept in mind.
My final point is that I think Canada has a responsibility. The world is ending, and the climate is ending, so Canada has a moral responsibility not to poach entrepreneurial, professional talent and human resources from Third World countries and poor countries through immigration and giving the incentive for immigration. The more those people come here, the more those countries will be poor — and more people will be knocking at your doors as refugees and asylum seekers.
The Chair: Thank you very much, Professor Qadeer. This brings us to the end of your statements, and the beginning of our questions.
Colleagues, you will each have four minutes for your question and the answer. You will forgive me for asking the first question.
My question is for each of the three wise men that we have here. Can you tell us which recommendation you’d like to see us make on Canada’s temporary and migrant labour force? I know it can be conflated with immigration policy, but it’s a separate yet interlinked bucket. I hope we can get some wisdom from you about the particularity of our recommendations. Professor Stanford, would you like to go first? Please share one recommendation you’d like to make.
Mr. Stanford: Thank you. My recommendation would be to support the people who are already here in Canada under the Temporary Foreign Worker Program, and accelerate the process of regularization and full permanent residency for the ones who are here. That has to be paired, obviously, with other recommendations about controlling the flow of temporary foreign immigration in the future, as well as the use of the temporary work permit system, but, for those who are here, I think the obvious thing would be to give them permanent status and regularization.
Mr. Skuterud: My recommendation would be to not focus on a single recommendation. The solution needs to be multipronged, and it can’t happen quickly. The biggest problem now is that prospective migrants don’t know what to expect. There is far too much uncertainty. If you look at the Express Entry draws, they’re bouncing around in the Comprehensive Ranking System, or CRS, scores and occupational needs. There’s no predictability in the system. I would recommend taking a slow, multipronged approach to moving in a different direction.
Mr. Qadeer: I will be very straightforward: I think temporary workers should be very carefully limited and very carefully selected. It should be modulated with the business cycle of the country. Those who come here should have all their rights, and they should be supported, but we shouldn’t encourage temporary workers.
The Chair: Thank you. That was great wisdom. Our first question goes to Senator Cordy, the deputy chair.
Senator Cordy: Thank you so much for being here, and for your perspectives on what we have been studying in terms of immigration and temporary foreign workers particularly.
At least two of you have said we need a multipronged solution — not just one press of the magic button and everything is solved. As political people, we get a lot of pressure from employers that they need staff now to run their businesses. In Nova Scotia, we have restaurants that are now only open on Wednesdays, Thursdays, Fridays and Saturdays because they don’t have the staff. How do we manage the immigration policy and bringing in temporary foreign workers when you’re getting a human cry from people in your province that they need workers?
I fully agree with you that we need a multipronged approach. Multipronged solutions are not usually quick ones; they take a lot of time and a lot of management. Could you give us some solutions for how we manage our immigration, and how we manage our temporary foreign workers coming into the country?
Mr. Skuterud: Thank you for the question. I’ve been thinking a lot about this for many years — particularly since 2015 when Canadian immigration policy moved in a different direction. I’ve written much about this; there are many C.D. Howe Institute reports and IRPP — Institute for Research on Public Policy — reports, and I encourage you to read that. I encourage you to read our paper published with the Canadian Labour Economics Forum. It’s a very accessible paper; please take some time. There are very clear recommendations on the low-skilled to low-wage stream of the temporary foreign worker.
We’ve recommended a cap-and-trade system; I think that’s the best approach. It is a system that doesn’t just shut down the program — that’s just not realistic. You can’t shut down the program, but it’s a way to control the growth of it. I think we can learn a lot from that. It’s an economically efficient way to do it.
If there’s one thing I will point to — which I’ve noticed that this committee, in particular, has been advocating for over quite some time, but there is an unintended consequence, and we don’t often think these things through — is there is a push for more pathways to permanent resident, or PR, status for low-skilled workers, which potentially does more harm than good. The reason is because for a prospective migrant who is making the decision to come to Canada — as a foreign student or a temporary foreign worker — to get on the pathway to PR status, they have an incredible willingness to pay for that PR status. The way they pay for that is through exorbitant tuition fees, or by accepting substandard wages and working conditions, to get through the probationary period to reach PR status.
The problem now is that the system is not predictable. There’s no transparency in it. These ad hoc PR pathway programs are creating a lure. They are luring in prospective migrants and saying, “Try your luck; get on this pathway, and you might get lucky.” That is leading to very large inflows of migrants who are hoping to get lucky, but it is also creating a huge imbalance with the inflows of temporary residents and the targets for permanent residents, which will inevitably lead to a big growth in the undocumented population of this country.
That should really worry this committee. If our number one objective is to maintain public support, that should worry this committee.
The Chair: Thank you, Professor Skuterud. Could you please submit your paper to us so that we have it as a part of our official documents?
Mr. Skuterud: I’d be happy to. Senator, I have emailed it to you twice before, but I will email it again.
The Chair: You haven’t sent it to the committee. I am just an individual senator who happens to be the chair of this committee. It needs to go to the committee.
Mr. Skuterud: Okay. I will do that.
The Chair: Thank you, Professor Skuterud.
Senator Osler: Thank you to all the witnesses for being here today. I would like to explore the comment — which I believe Professor Stanford had made — regarding more support for international temporary and migrant workers. This committee has heard from the workers themselves, along with their advocates, that on arrival, many have problems with the language, as well as access to health care and housing. There are limited agencies that do provide support, and settlement services aren’t supposed to provide support. Perhaps I will start with Professor Stanford.
Could you expand on that comment you made about the supports needed? Are there any recommendations that you would have for us?
Mr. Stanford: In a way, I think the issue around immigration policy is to make sure that we have a high-quality immigration policy that brings in people for the right reasons. This is why I think the link between our immigration policies and this perception of labour shortage — and the need to solve the labour shortage — is quite misplaced. Those two questions should be treated completely separately. We should be doing immigration for its own reasons, such as we want to be a global citizen; support refugees and displaced persons; and contribute to a more diversified and multicultural society.
To do immigration right, we have to bring in people under the right circumstances. That means coming in with security, stability and permanency. It also means coming in with the supports for settlement, training, language and employment services so that they can, indeed, build good lives here — instead of being, in a way, misled into coming to Canada, and then joining that giant lineup for minimum-wage jobs at Walmart that we saw on TV last week.
As soon as we break the assumption that the purpose of immigration is to meet the so-called labour shortage needs of employers, then we can do it on a more humanitarian and fair basis.
Let me take a quick minute to respond to Senator Cordy’s initial remarks about the pressure that you all face from employers who complain about labour shortages. Part of the response to that should be “Good. Go out and solve that labour shortage.” If employers face that pressure, then they will have to think about how they can use labour more efficiently — that is what productivity growth is all about — and they will also have to improve the conditions of those jobs in order to recruit and retain people into an environment where you actually have the choice, as a worker, about where to work.
We have seen that happening: In the hospitality sector, for example, we have seen a noted shift in the structure of work toward more full-time jobs and permanent positions rather than temporary positions, as well as the offering of benefits, which used to be unheard of in the hospitality sector — precisely because employers have felt the pressure to improve their offerings in order to address those recruitment and retention challenges.
I know it’s difficult for someone in a political position, but the response could be, “This is actually a good thing, and I hope you solve your labour shortage problem in an effective way. Don’t come to the government, asking us to bail you out by enhancing a supply of exploitable and insecure low-wage temporary migrant workers.”
The Chair: Thank you.
[Translation]
Senator Cormier: My question is for Mr. Skuterud.
When we went on a mission to New Brunswick and Prince Edward Island, all the employers we met with told us that if they didn’t have access to temporary foreign workers tomorrow morning, they would have to close their business. In fact, they wouldn’t be able to keep their businesses open.
In an article co-authored with Fabian Lange and Christopher Worswick, you recognized that an immediate halt to the flow of low-wage temporary foreign workers could indeed disrupt business operations. As a potential solution, you propose a cap-and-trade system, in which Immigration, Refugees and Citizenship Canada would issue a set number of permits to meet current demand, but gradually reduce the number of permits issued in subsequent years.
Can you tell us more about that proposal? What would be the potential benefits of implementing such a system, given that employers have all told us they have a great need for these workers?
[English]
The Chair: I imagine that question goes to Professor Skuterud for the cap-and-trade system?
Senator Cormier: Yes, it’s for Professor Skuterud.
Mr. Skuterud: When you design policy, you need to be very clear about what your objective is. That is the number one problem we have with immigration policy in this country; when we design programs, we don’t clearly state what the objective is.
Is the objective of Canadian economic class immigration to maximize the number of jobs in the economy? Is it to minimize business failure rates? If that is the objective, then clearly this cap-and-trade system is the wrong policy instrument.
Our argument — both in the paper with Chris Worswick and Fabian Lange at McGill University, and in this longer paper that I’ve discussed — is that the most reasonable objective in an egalitarian country like Canada is to leverage immigration to boost GDP per capita. If that is the objective, then you have to be careful about trying to keep businesses afloat that are just barely getting by, and the only way they can continue to get by is with low-wage workers. That is not a clear objective if it’s about raising productivity and living standards. If that is the objective, then something like a cap-and-trade system clearly provides a solution. We describe that system in our written piece.
Senator Cormier: Thank you. I come from a French community where there is a deficit of immigrants anyway — not only foreign workers. Generally, there’s an imbalance in terms of immigration into francophone communities. There is a real challenge to have economic success in our communities.
What should we do if the solution is not to bring more foreign workers? What is the solution? We want to integrate those workers, of course, into our communities. They are not only there to work; they are there to live their lives and raise their families. That is a real issue in our communities.
Mr. Skuterud: Yes, I think the issue is we can’t treat immigration as just some homogeneous population. The piece that we talked about — with this cap-and-trade system — was speaking very directly to a particular program: the low-wage stream of the Temporary Foreign Worker Program.
This is not about skilled immigration. If you read our other piece, skilled immigration is very much about the potential for immigration to boost the human capital stock and average living standards. That’s about leveraging immigration to select high human capital immigrants. In my mind, there is no question that the U.S. is successful in that. Immigrants in the U.S. serve to boost average living standards because they attract the crème de la crème through their top universities, and then employers cream-skim that talent. The IT sector is cream-skimming Indian talent from the top universities in the U.S. It is not about whether immigration is good or bad; it is about how we do immigration. It is much more nuanced.
[Translation]
Senator Mégie: I don’t know who my question is for, but certainly one of you.
What strategies could Canada adopt for temporary foreign worker programs, given the changing market? The market won’t always stay the way it is. Robots and AI will take over. Right now, employers are competing with each other to attract customers. We hear this every day in the restaurant industry, for example. Have you thought about that? Do you have any suggestions or proposals for the near future?
[English]
Mr. Skuterud: The first thing I always recommend is to not get too caught up in the hyperbolic narrative that you hear around artificial intelligence, or AI. I think that is also a problem we have. These are slow-moving technological changes. That is the first message.
The second message, which I think is more important, is the following: The way economists think about the jobs that are done in an economy seems to be very different than the popular notion. The popular notion is that somehow jobs get handed down from heaven — there are a certain number of job slots, and the job of policy-makers is to fill those slots.
That is not how economists think about where jobs come from. Jobs in an economy are largely driven by the labour supply. If you look at countries where there is a large inflow of low-skilled workers, you are going to find that in those countries, a larger part of the economy includes low-skilled jobs. In countries that are investing a lot in education and high-skilled workers, the jobs that are done in those countries tend to be very high-skilled.
The labour supply drives the labour demand.
The job of a policy-maker is not to plug the holes; the job of a policy-maker is to drive the labour supply to create the kind of economy we want. If you want a high-skilled, high-wage economy, then target high-skilled workers. If you want a low-skilled, low-wage economy, then target low-skilled workers.
That is the way to think about labour demand: It is a function of labour supply.
Mr. Stanford: In regard to the whole issue of technological change and some of the fears about AI, robots and so on displacing large numbers of workers, unfortunately Canada’s problem is that we haven’t been investing enough in technology, machinery and robots — it is not that we’re investing too much to threaten future job security. Professor Skuterud stressed that in his remarks about capital intensity, and how important that is.
Ironically, if we respond to the complaints of employers — such as “I can’t find enough people to do this low-wage job” — by saying, “Okay, here are the people who will do that low-wage job,” we’re dissipating the pressure for those employers to invest in machinery and automation, which will ultimately be important. It is more challenging in some industries than in others, but even in labour-intensive sectors, like retail and hospitality, we’ve seen innovative ideas from business owners who are looking to run their businesses with less labour.
That is actually a good thing for their businesses and the economy.
Senator McPhedran: Thank you to all of our witnesses.
I have a cornucopia of questions, so I am trying to decide what I am going to pluck to ask you.
I am very interested in better understanding the extent to which many of your recommendations to us today seem to be grounded in some operating principles of human rights. I want to ask each of you this: On a scale of one to five — five being “good” and one being “not-so-good” — give us a sense of the alignment that you see between human rights principles and the existing policies that we’re looking at for temporary foreign workers. It is an open question to all three witnesses.
Mr. Qadeer: I would give a score of two at the moment. With temporary workers, you have to come to Toronto to see the young Indian men on bicycles with bags on their backs; they are delivery boys. Let me tell you, anecdotally, I heard on the radio that, in Brampton, the Lotus Funeral and Cremation Centre sent back four suicide deaths of Indian students who came here with the idea of working on student visas. That is four per month.
You have to begin to think of what happens to the temporary workers who come here — not just to our economy and employers, but also to the workers.
Senator McPhedran: Thank you.
Mr. Stanford: I would second Professor Qadeer’s nomination of 2 as the appropriate number in all kinds of ways. First of all, Canada should have a special responsibility to welcome refugees and displaced persons, given what is happening in the world geopolitically, and as a result of climate change and so on. Our inflows of refugees and displaced persons have not been up to what they should be.
Second, it is how we treat the temporary foreign workers who come here. Since their status in Canada is tied up with the employment position they have, they are very vulnerable to exploitation. We have seen that in all kinds of documented examples of employers who take advantage of the vulnerability of those workers to demand things that no one in Canada should be required to do.
Finally, there is the issue I raised earlier about the uncertainty of reaching permanent resident status for those folks. Again, for the folks who came to Canada already, we have to manage the flow in the future better, but for those who are here right now, the best thing to do — from a human rights perspective — is to give them a full welcome, full rights and full protections.
Mr. Skuterud: I do not know what the number would be; I do not know what the metric is.
However, I will say that Canada has programs that are designed to meet the objective of increasing the economic well-being of migrants. Economic class programs are about trying to leverage immigration to improve the economy for the full population, but we also have programs that are just about trying to address the well-being of migrants. Those are called humanitarian class programs. I tend to be a really big believer in those programs.
I worry about how small those programs are in our targets. If you look at our targets, those programs are getting smaller over time — not just the percentage of the targets that are going to humanitarian class programs, but also the levels; the absolute numbers are going down in the 2023-25 targets. Nobody talks about that.
With this narrative around the economic benefits of immigration — which has been very misleading and naive — we’ve pushed all these humanitarian objectives into economic class programs, and then we end up doing everything poorly. If you want to deal with humanitarian programs — if those are the goals of immigration, and I would strongly support that — then design programs to achieve those objectives. That is not economic class immigration. Those are humanitarian class programs.
The Chair: Thank you. I like that a great deal because we have so many displaced people in the world, and we have so many jobs in Canada.
My question is around the location of those jobs. They might be in parts of rural New Brunswick or P.E.I. We recently visited them.
If we are going to target refugees for these jobs, let’s remember that refugees in Canada, once their status is normalized, have the freedom to work and live where they want — as they should.
What is the incentive for them to work on that apple orchard, which would close down tomorrow, or that dairy farm, or that seafood processing plant? I’m struggling with that. Help us out, even though I like the recommendation a great deal.
Mr. Skuterud: Can I jump in right there, senator?
The Chair: Whoever.
Mr. Skuterud: One of the problems we have in the way we talk about temporary foreign workers is we say that Canadians won’t do these jobs. But that comes back to Mr. Stanford’s point. Part of the reason Canadians won’t do these jobs is because they offer substantive wages and working conditions. You’re asking a Canadian to compete with an immigrant who is willing to do anything in that job because there is a massive prize they might win at the end: That’s PR status. The Canadian worker doesn’t have that prize — that compensation. It’s a form of compensation. Employers and universities and colleges are essentially exploiting that compensation — that prize.
And so you can’t compete.
The Chair: Thank you. I’ve eaten into Senator Dasko’s time.
Senator Dasko: Thank you to our panel of witnesses for your expertise, and for bringing to us this perspective, which I don’t think we have explored a lot before today.
Of course, we were travelling in Eastern Canada, and we were on the ground talking to employers and workers about the program. We learned that there are obvious downsides and problems for the workers in terms of exploitation, and also the employers have certain issues. As typical employers, they would like more flexibility and all of those things. But we also learned about the upside and the benefits — not just the obvious benefits for employers, but also the benefits for workers.
We learned from many employees — we don’t exactly know how many — that not everyone wants to be a permanent resident of Canada. That is one side of it that I wanted to ask you about.
We also learned that the program brings benefits to communities in the home countries where the labourers come from. They send money back to their communities and to their families. We learned that this is a very important factor for a number of workers. Again, we don’t know what the percentages are regarding who feels this way or that way, or who wants to have permanent resident status and so on. But we definitely learned this is a benefit.
If you were looking at this from a humanitarian lens, would you take this into account and say this is an important factor of the program, given that they said this to us? It’s not as if we are putting it in their mouths; we learned this from the workers. Again, we were on the ground talking to real people about this. That’s the perspective we had, and that’s the way we came to view it.
I wonder if any of the witnesses would like to comment on that.
Mr. Stanford: I’ll jump in first, Senator Dasko.
In regard to the statement that not everyone wants permanent residency, I’m not quite sure how to interpret that because whatever you’re doing, if you have the right and the choice to stay in Canada permanently — as opposed to not having the right and the choice to stay in Canada permanently — it’s hard to see how that’s a negative.
The remittance payments that migrant workers send back to their communities at home would continue. Permanent residents send big remittances back to their home countries as well. In neither of those cases do I see that as a convincing argument to maintain the temporary work status that has come to dominate so much of these immigration inflows.
In terms of the human rights dimension, we, for sure, want to support other countries in grappling with war, climate change and the other crises that they face. But that is not going to be, I think, an adequate rationale for the particular nature of the temporary migrant stream. If anything, I think it motivates more for expanding the humanitarian streams that we’ve been discussing.
Mr. Skuterud: I would be very wary or skeptical about any surveys that ask migrants whether or not they intend to apply for PR status. There’s a worry about dual intent. Senator Omidvar knows this very well.
The Chair: That’s enough. Thank you very much.
Senator Burey: Thank you for being here and for bringing your expertise. We’re learning a lot today.
I am always interested in system design, and I’m very happy to hear from all of our witnesses about that. How do we get from here to there — to where we want to go? We have to come up with some recommendations of how to get from here to there — wherever “there” is — or creating that system where Canada’s role in all these various aspects of our global responsibility, and our responsibility to our citizens, is fulfilled.
One thing we heard from both the employers and the international workers was about the complexity of the multiple streams — you talked about this lottery of these multiple streams, and how that actually could be part of the system that sets up all the factors necessary for abuse, with the consultants and higher tuition fees.
This is the other thing we heard about: In some countries where there was a memorandum of understanding between the countries — where they had bilateral agreements — the systems seemed to work better, and, of course, that’s not universal. Can you comment on those two aspects — the bilateral agreements and the multiple streams — in an effort to get from here to there?
Mr. Skuterud: That’s a great question, and a really difficult one. There’s just no way I can do that justice. I’d love to sit down for an hour or two, and talk to you about that. It’s a great question.
All I’ll say to you is the problem isn’t how to get there; the problem is defining what “there” is. That’s what we miss. We jump to the part, and we want to get there before we define what it is we’re trying to get to, and everybody has a different idea about where “there” is. We have a discussion about how we get there, but they’re all going to different places; you never reach any kind of agreement. You have to agree on what “there” is first, and it can’t be a million different places. We need to agree on somewhere.
Mr. Stanford: In regard to the issues in getting from here to there — perhaps not on those two specific issues you raised, senator, but in a generic sense — my overarching recommendation is to strongly limit the temporary work permit system, and instead replace it with permanent migration for people with full status. One important transition measure for getting from here to there is to recognize the insecurity and risks that temporary work folks already have in Canada today. That’s where, again, the full status and regularization process is incredibly important, particularly if it’s paired with what I would see as a more sustainable and efficient vision of a limited role for that temporary work permit system in the future.
Senator Burey: Thank you.
The Chair: Canada is not the only country facing these labour market challenges. We compare ourselves to Australia and New Zealand, and Europe, too, is facing labour market shortages in certain countries. Who does it better? Who can we learn from? Or is self-improvement the way to go?
Mr. Skuterud: Again, I struggle with the premise of the question. The premise of the question assumes there’s a problem that needs to be solved, and I continue to struggle understanding what the problem is.
Mr. Stanford: The way that Canada stands out from other countries is, in fact, on the extent and the speed of the turn to temporary migration as the source of that problem — whether we agree it’s a problem or not.
The thing that marks Canada as different from the other places you mentioned — where employers also face an ongoing challenge to recruit and retain labour — is Canada’s population is growing at 3% per year. There is no other industrial country that comes close to that speed of population growth, and it’s mostly because of temporary migration. This is what we can learn from other countries on that score: Why would we put so much emphasis on that as the alleged solution to a problem that we’re not convinced is a problem in the first place?
Senator McPhedran: I’m going to circle back to my previous question, and ask if there would be any disagreement among our expert panel today with the premise of improving the actual lived rights — the access to human rights — of temporary foreign workers, which, I think, would lead pretty quickly to more secure tenure in Canada. Is there a reason to not frame any kind of program with an alignment with human rights?
Mr. Skuterud: I’ll encourage you to spend some time reading. The first Nobel Prize winner for economics was Jan Tinbergen, and there is a famous rule in economics that we teach our students — it’s called the Tinbergen rule. The rule goes something like this: For every policy objective, you need at least one policy lever. The problem we often have is we’re trying to achieve 10 different objectives with one policy lever.
You want to achieve high profit margins for businesses, keeping businesses that are marginal businesses alive, by providing them with these low-skilled workers, and you want those workers to be willing to accept low wages and working conditions, and then you want all these human rights in there too. You can’t do it. There are fundamental misalignments there. There are economic trade-offs that we have to come to terms with. That’s the problem. You need to define the objective.
Senator Greenwood: I have a really quick question, and I think you started to answer a bit of it already. One of you talked about Canadians not getting jobs versus the temporary labour force, where people work in really poor conditions. This is a very practical question, and maybe it’s one of your lever questions. How do we support employers — who can — to support all potential workers?
Mr. Stanford: Thank you, senator. In a way, we have to not just support employers, but also kick them in the pants a bit — if I can use that language — or use a stick, not just a carrot. Employers who are having a hard time recruiting people to work at the wages and conditions that they’re offering have to be challenged to find a better way to do it. Either improve the offer to workers to come and do those jobs, or replace labour with other means of production. By saying, “We want to help employers stay in business, even if they can’t do it without a ready supply of precarious temporary migrants,” we’re letting them off the hook, and ultimately we’re not doing them or our economy a favour.
I do think that all temporary workers who are here, regardless of the skill or the program, absolutely deserve to have full rights and recognition of normal labour standards, protections, minimum wage, the right to unionization, safety standards and so on. Regardless of what we do on the ultimate policy, we have to ensure that those people are treated in an equal way to folks who are in Canada.
The Chair: Thank you, colleagues. I know there are a lot more questions. I apologize for having cut off our witnesses and my colleagues, but it is my job to manage our time. We have another panel coming in.
I’d like to thank all three professors. You have enlightened us significantly, and I’m sure you look forward to our recommendations.
Joining us today for our second panel, we welcome Armine Yalnizyan, Atkinson Fellow on the Future of Workers, Atkinson Foundation; and Noel Baldwin, Director, Government and Public Affairs, Future Skills Centre. It’s nice to see some gender balance. Thank you both for taking the trouble to come and talk to us in person — we really appreciate that.
You know the drill. You will have five minutes each for your presentation, and then be prepared for lots of questions from my colleagues. We will begin with Ms. Yalnizyan.
Armine Yalnizyan, Atkinson Fellow on the Future of Workers, Atkinson Foundation, as an individual: It’s a great honour to be with this committee today to discuss the growth of Canada’s temporary and migrant workforce, and I particularly thank the chair — Senator Omidvar — for her leadership on this extremely important file for Canada’s future.
I am an economist and the Atkinson Fellow on the Future of Workers. When I was the senior economic policy adviser for the Deputy Minister at Employment and Social Development Canada, or ESDC, in 2018 and 2019, demographic pressures were, indeed, starting to unfold. Unemployment rates had fallen to half-century lows — it was 50 years since we had seen unemployment rates that low. They were pre-staging an era of more retirements than entrants to the labour market, based on the Canadian-born.
Without massive adoption of labour-replacing technologies, which you’ve just heard a lot about — and those pose different types of economic challenges — future economic growth would rely exclusively on population growth, and that would come exclusively from newcomers. The question was this: What kind of newcomers are we inviting into Canada? The answer lies in the numbers.
Senators, I have given you two charts. One of them shows exactly the breakdown in 2022 of every person we invited to live with us in Canada as a permanent resident. There were only three people who were invited to stay permanently to study or work, or to be contemplated for their refugee status. The share of the workforce that are not permanent residents has jumped from an estimated 2.5% of the employed labour force to 3.8% — just since September of 2019. This is astonishing. There has been no public policy debate that charted this course. It emerged solely in response to employers’ concerns that there weren’t enough people to do the work — that is, at prevailing wage rates.
Senator Kutcher, Senator Petitclerc and Senator Dasko have noted that migrant workers may have the same rights as Canadian workers on paper, but are unlikely to exercise them for fear of jeopardizing their job or their future. They are obviously more likely to be exploited on the job, and that kind of contagion spreads very rapidly.
This committee has already raised ideas on how we could change course. Your questions to previous witnesses suggest four paths of policy reform that could create better labour markets for all workers, not just temporary workers: how temporary resident permits are issued; how rules are enforced; pathways to permanence; and quotas. You all have raised these issues.
First, work permits tied to a specific employer are very rare. They’re used only in the relatively small Temporary Foreign Worker Program, which is administered by ESDC. Last week, the Deputy Minister of Immigration, Refugees and Citizenship Canada, or IRCC, Christiane Fox addressed you and acknowledged that open work permits tied to a region or a sector — not tied to an employer — could help specific industries or rapidly aging communities. Addressing a potentially crippling labour shortage, while limiting abuse of workers, seems — to me — like a very promising avenue of reform.
Second, enforcement needs to reduce the number of bad actors. That is the point of enforcement. Over 2,000 government inspections of employers of migrant workers have been conducted in the past year, and they show that the main violation is wage theft. But just a handful of the 763 non-compliant employers listed on the registry since 2016 have been banned from employing more migrant workers. More of these employers need to be stopped.
Recent reforms that the federal government has introduced — which use migrant worker advocates to better inform workers of their rights, and encourage the reporting of abuse — should be augmented. Businesses have lobbyists to plead their case — so should these workers who may not know their rights, much less feel able to stand up for them.
The third pathway is the pathway to permanence. It is so convoluted and multi-staged, as you just heard. Dr. Rupa Banerjee of Toronto Metropolitan University advises me that the IRCC database lists 140 different types of temporary resident permits. The permutations of how people renew their permits, or actually go from one type of permit to another — in hopes of gaining permanent resident status — are mathematically astonishing. The time to transition from temporary to permanent resident status is lengthening, while the probability of transitioning from temporary to permanent resident status has only gone up a little bit — from 20% to 30% — between 2002 and 2011, and that’s for people who have been here temporarily for 10 years.
Simplify the ways to permanence and communicate them before people come into the country, whether they’re a student or a worker. Not every migrant worker wants to build their life here, but everyone should know their chances, their rights, their responsibilities and the amount of time it will be — before they get here — so we’re not playing a lottery game.
Finally, in terms of targets and thresholds, with more people displaced from their homes due to political violence or climate emergencies every year, we should not be setting hard numbers on asylum seekers. Just as we set limits on the number of immigrants allowed to stay and live here permanently, the number of people permitted to study or work here temporarily — often in hopes of staying here — should also be controlled.
For international students, the federal government will need to set targets in relationship with the provinces. For migrant workers, federal rules that, just last year, tripled the use of temporary foreign workers in individual workplaces — from 10% to 30% — should absolutely be rolled back, with similar limits placed on employers who use migrant workers who enter through other pathways.
These four reforms of intake policy would reduce the exploitation of the newcomers we say we need. However, as Ms. Fox told you last week, the intake isn’t the only problem; you need to coordinate planning with other departments besides the Department of Immigration. She said, “. . . it’s beyond the Department of Immigration. It has to be with a skills strategy and a housing strategy.” Canada’s economy would thrive because of our new neighbours, but it will take the type of thought you are bringing to the alignment of mission, policies and implementation to make this so. I look forward to the encouragement of your work to help the Government of Canada in achieving these goals. Thank you.
The Chair: Thank you very much, Ms. Yalnizyan. Your paper has not been distributed to our colleagues yet because it’s in translation. Colleagues, you will get this paper. One doesn’t have to take lots of notes because it will be before you in time.
Mr. Baldwin, you have five-plus minutes. I’ll try to be fair to you as well.
Noel Baldwin, Director, Government and Public Affairs, Future Skills Centre: I’ll do my best. Thank you, chair and senators.
For those of you who don’t know us, the Future Skills Centre is a research and innovation hub for skills and workforce development in Canada, funded by the federal government and located at Toronto Metropolitan University. We’ve seeded more than 240 innovation pilots and research projects in the last four years, focused on ensuring that Canadian workers and employers have the skills they need to navigate a rapidly changing local and global economy.
As we’ve engaged with partners across Canada — including governments; employers; workers and labour; and service delivery organizations — we’ve heard the same things that you have: There are very persistent, stubborn labour shortages across many sectors, and temporary and migrant workers are one element of a strategy to address those challenges. However, we know — and it sounds like you’ve heard — there are a number of challenges to newcomers’ entry to the domestic labour market, and we’re trying to pinpoint some of those problem spots and test solutions to resolve them with partners who are engaged in this work on the ground.
I’d like to emphasize two particular issues that have emerged as important from our experience to date. One is bringing a stronger lens around skills and skills assessment to the process of supporting newcomers. The second is supporting small- and medium-sized enterprises, or SMEs — employers — to better engage with newcomers entering the labour force.
On the first point, we think that there’s an opportunity to embed a stronger skills lens in all of the pathways for newcomers. Layering skills identification and assessment on top of some of the current processes that may identify potential — largely through credentials or experience — could, over time, improve labour market integration, and maybe ultimately improve selection processes and transitions.
We’ve been working with the Immigrant Employment Council of British Columbia on a project called Facilitating Access to Skilled Talent, or FAST. Working with employers to identify the skills they’re looking for, FAST has developed skill assessment tools that help newcomers demonstrate their skills, and learn new skills or skills more closely aligned with the needs of their local economies. The initial results from the first phase of the pilot have been promising, and FAST is now expanding to New Brunswick in partnership with the provincial government there and into new occupation areas.
Many of the participants, interestingly, indicated that some of the learning modules that focused on the Canadian workplace and cultural competencies were as valuable to them as the technical skills, and we think this also has some promise that could be tied more specifically to economic sector or geography in a helpful way.
With SMEs, as you know, Canada’s economy is made up of a significant number of small- and medium-sized enterprises. Most Canadians are employed by SMEs, depending on how you draw the definition of these things, but SME investment in recruiting and developing talent is often constrained by capacity issues that can affect their ability to accurately assess the skills they need — especially in a forward-looking way — to invest in training and to adopt advanced recruitment practices.
We’ve been working with the Toronto Region Immigrant Employment Council, or TRIEC, on a project called Career Advancement for Immigrant Professionals, which works with employers to try to reduce underemployment, and recognize and value the skills and experience of newcomers who have the potential to assume advanced and leadership roles.
From that project, we learned that there’s a huge cultural change aspect and change management part to that shift toward more of a skills focus, and TRIEC is working with employers to embed meaningful organizational processes and ensure leadership buy-in, which seems to show some promise. As a result, a majority of the employers they’ve been working with are implementing some of those changes.
We’ve also worked with the Ontario Chamber of Commerce, which has brought in a number of their provincial counterparts, leading an initiative that puts an on-demand learning management system — that is demand-driven and SME-led — in the hands of the chambers and their members. They can access these resources when they want them, and pick the ones that make the most sense to their businesses.
Initial offerings have focused on creating welcoming and inclusive workplaces. So far, we’ve been able to engage dozens of chambers across four provinces and hundreds of SMEs. The initial results on usage and satisfaction are encouraging. The modules are getting used, and being completed, and about 9 in 10 respondents have said that they can actually apply the material they have accessed into their current role or current business. We’re looking to expand that into other areas, including technology, the adoption of technology and green skills.
There is certainly a lot more to do and a long way to go to improve experiences for temporary and migrant workers. I have not touched at all upon exploitation or working conditions, but those are often very real and serious issues.
I know I am approaching the end of my time, but please let me make one more point. I would echo my colleagues who have made the points that being intentional about our objectives, asking serious questions about what we’re doing now and where we want to get to and, from our perspective, innovating and testing potential solutions can all help.
If I can leave you with three things, it’s the following: Again, there is an opportunity to bring a greater focus upon the skills that people are bringing into Canada, and into the work that they want to engage in; we can do more to support SMEs to be prepared to successfully welcome newcomers into their workforces; and we need to ensure that newcomers have the supports they need — beyond just placement in a job — to be successful in their integration here, whether it is temporary or permanent.
Those are some of the thoughts I would leave you with. Thank you. I look forward to your questions.
The Chair: Thank you to both of you. Senators know the drill: We will be able to do five minutes per question and answer, starting with the deputy chair.
Senator Cordy: Thank you both very much. You have provided a lot of helpful information.
Ms. Yalnizyan, the points you have made are things we have all looked at, but when I look at your pathway to permanent residency — and we have heard the challenges that are there — you were very open about the fact that it is so convoluted: There are over 100 kinds of permits, which makes it very challenging for someone coming in from another country, whether it is a temporary foreign worker or someone who wants to come and stay in Canada.
There is also the challenge of people not knowing their rights, and, even if they do know their rights, they are coming into another country — there is the challenge for them in understanding that they can speak out. Many, of course, don’t feel comfortable doing that, so they are not telling us about bad actors, as you spoke of.
How do we deal with that when we are looking and trying? Do we have too many programs, or are they too complicated and too convoluted? Should we be streamlining more?
Ms. Yalnizyan: Yes.
Thank you for your question. The answer is to simplify it. I do not know how you go from 140 permits to, say, 6. We have far too many streams, where people are seeing that they don’t fit in one stream anymore, so they are going to jump over there.
We just learned that Statistics Canada is counting the population differently. They used to count people whose permit had expired, and gave them another grace period of 30 days, but it takes months and months to renew a permit, so they are now averaging 120 days, plus an expired permit if somebody has applied for it. But there are plenty of people who do not apply.
We have danced around the topic of undocumented folks, but the more that you bring in hundreds of thousands of temporary foreign workers every year, the more that you will have people who just stay. Then, you have a really ugly conversation about illegals, and what to do about illegals, which your policies have created.
There is a whole separate conversation about what to do about undocumented residents.
Dr. Stanford spoke about it briefly in talking about regularization. I hope to be able to submit to you — before the end of your deliberations — some document about the idea of regularization, and what Canada could get out of it, as well as these people. We have not done a regularization program since 1973.
Senator Cordy: It seems that we are piling on and not simplifying. It just seems like we are adding, which is making it more complicated and challenging.
Mr. Baldwin, I thought you ended with a really good comment. You said that we must be intentional about our objectives. Is that a part of the problem? Have we clarified what our objectives are in bringing people into Canada?
Mr. Baldwin: On the systemic question, I would defer to the other witnesses, who I think have clearly said that we are not clear about the objectives — we now have many objectives, and don’t necessarily have the tools that are designed to achieve them.
In coming at it from the perspective that we have — around trying to identify the skills that the labour market needs, both today and going forward — our experiences and understanding are that it’s not a part of the way that we execute the processes for bringing people into the country now. We think that it could be. That could help both employers and people who are coming in order to have the skills that they already possess recognized, or strengthen them to meet the needs of the Canadian labour market.
Senator Cordy: In terms of international students, Ms. Yalnizyan, you spoke about limiting them in conjunction with the provinces. Are we exploiting international students by taking so many who come in with high expectations?
Ms. Yalnizyan: Yes. Thank you for your clear question.
Mr. Baldwin: I apologize, if I could add one point, my previous background was in post-secondary policy. I would just like to say that the question of international students can’t be addressed without having conversations about the funding of post-secondary systems, which is a very difficult area for the federal government to get into. However, those are absolutely interrelated.
Senator Osler: Thank you to both witnesses for being here today. I have a question for each of you.
Ms. Yalnizyan, I would like to follow up on Senator Cordy’s question about simplifying the streams. I’m a physician by training, and, in medicine, we have a concept of medical reconciliation where you will look at what medications a patient is on, what medications they need to be on and whether there are interactions. Then, you deprescribe what they don’t need. That builds upon what you had said about us just piling program on after program.
What are your thoughts on how to simplify the different streams within the Temporary Foreign Worker Program — the five main streams?
Mr. Baldwin, my question for you is this: How could the Temporary Foreign Worker Program incentivize employers — as we heard from our previous panel — to improve working conditions and wages?
Ms. Yalnizyan: I actually need to think more deeply about your question. I love the medical analogy; it’s really striking and needs to be considered more regarding how you can deprescribe what is going on.
I want to take your question outside of the context you raised it in — which was how to decomplexify the Temporary Foreign Worker Program streams — and say they already are complicated by the fact that they are embedded in the permanent stream, increasingly. About 50% of the people we didn’t permit to become permanent were previously temporary. So we’re creating this lure, which Professor Skuterud talked about.
You cannot simplify without understanding your objectives. Do you want all of the people to come here permanently, or do you want a good share of them, apart from the humanitarian group, to have lived here successfully for some time before they are permitted to be here permanently? We didn’t ever do that historically. Is that what we’re moving toward de facto?
I need time to think about your question before I can answer it because it isn’t just the temporary streams.
Mr. Baldwin: This is a little outside of my knowledge and expertise, but part of what has led to the creation of so many different types of permits has been a willingness to essentially respond to much narrower segments of the demand for labour. If a particular sector spikes, we say that we have to deal with this and create a new way of doing this. Then, as you say, we don’t close it off. That can also leave some of these processes open to a higher chance of manipulation because it is a temporary thing that becomes permanent, and probably less attention is paid to some of the conditions under which people are then brought in.
I would echo the point made earlier that we need real enforcement. There’s an opportunity to work with some of the people who want these programs to work well. We have made good partnerships with folks in the agricultural sector who are trying to create a long-term view of what their labour needs are beyond immediate emergency needs. That is the opportunity to build in higher standards and more control and, hopefully, less reliance on some of the ways that people come in and then suffer abuse.
Senator Osler: Thank you.
[Translation]
Senator Cormier: I’ll do what my colleague did and ask each of you a question.
Mr. Baldwin, you mentioned chambers of commerce. There is a whole ecosystem around temporary foreign workers: employers, the chambers of commerce, the host and integration organizations and the federal government. We want to achieve common goals that seem poorly defined.
What recommendations would you make to the federal government to encourage better coordination and co-operation among organizations? It seems there is no formal mechanism from the federal government to bring all these players to the table in order to set common goals.
Ms. Yalnizyan, in an interview you gave to CBC last week, you talked about artificial intelligence. You said that artificial intelligence could either replace or enhance the workforce. What could the federal government do with employers to take into account these new trends in the world of work, and what impact could this have on the arrival of temporary foreign workers and their joining our businesses? Those are my two questions. Thank you.
Mr. Baldwin: Thank you for the question. It is quite difficult for the federal government to find the answer, because the economies in Canada have very significant regional differences.
For some of us, it is very important to be on the ground in a specific location to respond to a challenge, as it is to find partners who have the skills required to bring all the major players together. Sometimes it’s a more focused challenge for the provinces and territories. In Calgary, we found an opportunity to get together with their economic development corporation to do some good work on energy transitions.
If you can find a partner who can bring the key players together, so that objectives can be defined, and if people can implement strategies, it’s very effective. It’s a difficult challenge for the federal government, because it has to consider ways of doing things across the country. There is no simple answer, but bringing together the major players on a regional or more local basis is a criterion that we believe is very important.
Senator Cormier: Thank you.
[English]
Ms. Yalnizyan: You have asked two of the toughest questions there could be. I appreciate that you saw that segment. It is an issue that I have been dealing with for quite some time. When I was at the deputy minister’s office, and we would talk about the future of workers and stress-testing skills development programs, this was the go-to question: What is the technological impact? Nobody knows. When it comes to AI, nobody knows even more. We don’t know what the future will hold.
Partly in response to your previous question about how the federal government should be working with the chambers of commerce — and there is a Venn diagram with your second question about technology — we need more sectoral tables. We need tables where employers, employees and governments are sitting together, talking about what is unfolding in real time. This shouldn’t be on a workplace-by-workplace basis. It should not be on an advocacy basis. It should be on a real-time information basis, which is something that we do not practise sufficiently; we used to. We had the Canadian steel technology council — it no longer exists — but that is the type of modularity that would bring you some insight as to what industries are facing.
Partly, when issuing open permits within an industry or within a region that is really struggling with the population aging, and consequently does not have enough workers, these are the ways that you — because it is more than one employer, one permit or one person that desperately wants to get into Canada — are getting a flavour for how things are evolving in real time.
Things in AI are going to change more rapidly than we’ve ever seen before, and it is controlled by a handful of globe-straddling corporations. We will not be able to regulate them any faster than any other country can. We are doing this in real time around the world. Companies that do not like our regulations will simply practise elsewhere.
We have a real problem in terms of understanding the future of skills, but it won’t be so-called low skills. It won’t be very labour intensive, like the care economy or a lot of infrastructure jobs. We will continue to have labour shortages in those areas. If the solution is always temporary foreign workers because we can get them faster, then we are creating a society in which people who come here do the work that isn’t temporary, but it is in accentuated shortage — but they are not allowed to get sick, not allowed to form families, not allowed to age or be unemployed, or they are out. What kind of society are we building? We are creating a dystopian society.
Senator McPhedran: Thank you to both of our witnesses for what you have shared. You are familiar with the questions that I asked previously about using a human rights framework; I will not repeat that.
I am interested in trying to connect with the question that Senator Osler asked regarding the implementation of human rights obligations in an economic context. Is there any compelling argument against actually enforcing that as the driver for where the country needs to go?
Mr. Baldwin: I don’t know of a compelling argument to not do that.
Ms. Yalnizyan: I do. It goes back to Professor Skuterud’s argument about what it is that you are trying to achieve by bringing in people. Are we trying to achieve a more profitable or faster growing GDP? Are we trying to improve productivity and GDP per capita? What are you trying to achieve with your intake policy?
Based on the answer to that, you may very well want to have all of the levers on the temporary side. You may not want people to get old here. You may not want to have people stay here who are no longer needed in a sector where skills are disappearing because of AI. I’m arguing against myself because I hate that. However, that might be what the Government of Canada — and the voters who vote that government in — wants the future of our intake policy to look like. Human rights may not trump whatever it is that your intake policy is all about.
Senator McPhedran: Part of what we have been seeing and hearing is a quite intense bureaucratization of the immigration process — in particular the permits that we have been talking about and the proliferation. It is interesting how often we focus on immigration, and then we hear from immigration representatives that it can’t possibly be solved by immigration. It is kind of a throwing up of the hands. What kind of coordination model should we, as a committee, be looking at? We have to make recommendations. What are your thoughts on that, please?
Ms. Yalnizyan: Right now, the Government of Canada is apoplectic about housing. Getting anything else on the agenda is going to be really difficult. The questions we are tackling here are all-of-government questions. Deputy Minister Fox raised it last Thursday when she was speaking to you. This isn’t just an immigration problem. We are seeing it in housing. You brought in all these people, and we do not have enough places for them to live. You brought in all these people, and we do not have settlement services. You brought in all these people, and we do not know what skills we need. We are just responding to what employers are saying. It is an all-of-government problem. But do you have the government’s attention to do the thing that needs to be done from a public policy perspective? Good luck.
I think you have to make these recommendations as not just the Department of Immigration or the Department of ESDC — under that one volière. I would personally love to get rid of the Temporary Foreign Worker Program. But I agree with Mr. Stanford that you cannot just shut it down.
But we have been moving there anyway de facto, as a share of all the temporary intake. The focus of your committee has been sometimes about immigration, and sometimes about migrant workers. I think that you need to pick a lane. Are you talking about migrant workers within immigration or labour shortages, or the combination of the two?
What is the problem that you are trying to address? I will harken to Professor Skuterud’s question: What is the problem that you are trying to answer? That will help you determine what the landscape of the solution looks like. Who does it involve?
You are going to need the federal government to actually row with you. Good luck.
Mr. Baldwin: The other coordination issue is the one that we just keep talking about. You had deputies from IRCC and ESDC. You could have had a deputy here from Innovation, Science and Economic Development Canada, or ISED, to talk about skills and economic issues. You’ve got a Temporary Foreign Worker Program in ESDC. You have credential recognition over there. Almost all of these things require coordination with the provinces, and it is not clear that those conversations are happening that are going to allow for that.
Ms. Yalnizyan: Chair, can I double down on one little piece of this? When I was at the deputy minister’s office, I was trying to get the deputy minister to see this is not ESDC. You cannot talk about skills development and future-proofing your skills program for labour adjustment, technology or anything if you are not also talking about intake because of the demographic issues. There is a pattern in the Canadian government — in the public service — to not cross over bowling lanes.
Bringing these departments together to work cross-departmentally is very challenging.
The Chair: Thank you. I have a question based on our recent study trip to the Maritimes.
Employers are paying a lot to bring temporary workers in. They pay $1,000 for the Labour Market Impact Assessment, or LMIA. Some of them have to pay for consultants who are able to facilitate the entry. They pay for housing. They pay for interim health insurance. Certain employers have said to us that adds up to $7,500 per employee.
It is not as if they are not willing to pay these, in my view, extraordinarily high costs. They seem to be addicted to the Temporary Foreign Worker Program as opposed to investing those kinds of resources — as a sector — into technology, human resource development or whatever.
We are not making recommendations to employers. We’re making recommendations to the government. How should we factor this upfront investment that is being made into our recommendations?
Mr. Baldwin: It is a great question. When you sum it up, it is a shocking number. I would not have guessed that it was that high. One of the questions that I would be asking people is this: Why is it not more effective for you to recruit locally — from populations that, perhaps, are not your usual pool that you recruit from? There are big challenges for many Canadians entering the labour market who would probably benefit from even a portion of those resources in order to get into that hiring pool.
In Canada, employers are notoriously challenged around technology adoption. Mr. Stanford mentioned it earlier. There is a study that about 4% of Canadian firms, so far, are adopting AI and other advanced technology — that is half of the leading country. And there is big stratification by big firms compared to smaller firms, going back to the point I made earlier about SMEs. It’s the same thing on funding training. We are vexed with some of these questions, too. I am afraid that I do not have a clear answer. There are, at least, three things that we need to be looking at regarding why employers are not doing more tech, human resources and recruiting from a Canadian population that has a hard time getting into the labour market.
The Chair: What do you think about the trusted employer program initiative — it’s another pilot?
Mr. Baldwin: I don’t, sorry.
Ms. Yalnizyan: Some, not all, of these employers — who are paying all of these excessive extra fees — take them off the wages of the people that come in. They are not paying them. They are paying it up front, but they are getting repaid.
Other employers are addicted to such programs because it gives them the bargaining power that they would not have with local residents. The LMIA means that worker is tied to them. Tomorrow, you will hear from the UN Special Rapporteur on contemporary forms of slavery who makes the low-wage stream and the agricultural stream of the Temporary Foreign Worker Program akin, in some cases, to modern-day slavery. Wage slavery is a thing — we don’t want it to expand, and yet that is, partly, the addiction for some employers, but not all: It maintains their bargaining power in this rapidly changing world where demographic forces, notwithstanding what Mr. Stanford said, in any country that had a baby boom after the Second World War are going through exactly what we’re going through. They’re not dealing with it the same way we are, but we are all facing the same pressures. Unemployment rates are at 50-year lows. That changes bargaining power. Whatever an employer will do to maintain bargaining power, they will do.
That brings me to the enforcement question. We have all of these investigations; some of the fines are $500 here, or $700 there. Sometimes they get banned because they did not pay their fine. These companies come and go. They disappear. They rebrand themselves. We know who they are. We could follow them. We could do more blitzes — we did it in Ontario. We know how to do enforcement more effectively and make those punishments stronger because demographic gives us — on a silver platter — the opportunity to make marginalized populations better employed; more opportunities to earn and to learn to become better human beings; and more opportunities to make every job a good job. If you do not penalize the malfeasant employers and, at least, reduce a little bit of their addiction to this kind of power, then we’re not doing our job right. That is the advice that you can give the federal government.
[Translation]
Senator Mégie: I’d like to thank the witnesses for being with us. I’ll ask each of you a question, like my colleagues did.
Mr. Baldwin, you said earlier that we need to define the objectives and know where we want to go; other witnesses before you have also mentioned this. You talked about taking skills into account and improving workforce selection. What we heard during our visit to the Maritimes is that sometimes people with university degrees, such as engineers, agree to go through this program to be able to immigrate to Canada. So I’d like to get your thoughts on that in terms of skills.
My second question is for Ms. Yalnizyan. In your research, I thought that you must have tried to find good practices elsewhere, in reputable countries that have the same kind of programs. Have they come up with solutions or ideas that could inspire the Canadian government to better implement these programs, based on what the information received from those countries?
Mr. Baldwin: On the issue of high-skilled people in temporary employment programs, since there are 140 ways to get in, it’s hard to say they’re all misplaced. One of the questions that probably needs to be asked, as we’ve discussed, is whether there are many reasons for a person to come to Canada to work but not to settle here full-time or permanently. So we would have to ask ourselves whether that person entered the country through the wrong path or whether they entered because that was one of their goals. I don’t know, but I would say that we often hear about people with very advanced certificates or diplomas who enter Canada and who do not work in their own trade or field. Sometimes it’s a matter of recognizing their qualifications.
One of the things that could be improved, if we want to put more emphasis on the issue of skills, is that if it is difficult to recognize qualifications, we still need to have information on their skills, which are very strong. Perhaps they are well placed in their own jobs, or the jobs they are in are closer to their skills than in a system where we have no information. Qualifications seem to be linked to skills in much the same way as the consumer price index is linked to the price of an apple. The consumer price index gives you a lot of information on a lot of things, but if you want the answer to a single question, whether it’s skills or the price of an apple, it’s not the best tool.
Senator Mégie: Ms. Yalnizyan?
Ms. Yalnizyan: That’s a very good question, Madam Senator.
[English]
The world is changing. Canada didn’t used to be reliant on temporary foreign workers. This is a relatively new phenomenon. You’re asking who does the temporary foreign worker thing better? We did. Not long ago, we really did it a lot better.
When we talk about having clearer pathways to permanence, when we talk about regularization of the people who are already here and undocumented, when we talk about providing better settlement services for temporary residents who are working and studying — not just for permanent residents — when we talk about the need for migrant worker advocates to act as lobbyists, to report abuse and to inform people of their rights, we know how to make it better. We don’t need to look elsewhere. We know exactly how to do it here. But the world is facing the same pressures in advanced, rich countries that are also aging, and all struggling with the same question.
Is there a place that does it right? No. Almost every place is dealing with a populist backlash that thinks the newcomer is the problem when the newcomer is what we need. What we need to do in this environment is become the people magnet — become the place that newcomers want to come to because they are treated fairly, with human rights embedded in everything that we do. But we have to be super clear of what our objective is because labour shortages can be seen two ways. It’s in the eye of the beholder. It’s “I can’t get enough cheap labour” or “I can’t get enough care.” It’s “I can’t find an IT expert” or “My community is drowning in older people, and doesn’t have people to even work in retail.” These two things can exist at the exact same time.
What is our objective? How are we interpreting the meaning of labour shortages that are real? As you know from your study trip, they are totally real. What are we doing to make those jobs great so that people want to not only come, but also stay — and encourage them that they’re not only good enough to work here, but they’re also good enough to stay here? It is not a complicated recipe for success.
Senator Dasko: Thank you both for being here. It’s nice to see you again.
Two of the three witnesses — both economists — in the last panel had an analysis of the labour market that goes along the following lines: Mr. Stanford said that there is no labour shortage in Canada, and he talked about the growth of the labour force. Professor Skuterud said that the increase in foreign workers will lower our GDP and increase our inequality. We’re getting poorer because of what we’ve been doing. All we’re doing is trying to plug holes in the labour market, but essentially, these are bad developments.
I want to get a sense of whether you agree with any of the analyses from the two economists. In particular, what do you think of what they said? Of course, they’re providing an analysis, which then leads to the conclusion that we shouldn’t have this program, but let’s set that aside for the moment. Do you agree with their analyses of the big picture?
Ms. Yalnizyan: Is that question to us both?
Senator Dasko: To both, yes.
Ms. Yalnizyan: I have difficulty with the analysis that there’s no demographic pressure. The demographic pressure that Statistics Canada reported in 2022 was that the population aged 65 and older was growing six times as fast as the population aged 15 to 24. We have a real problem about the number of entrants. We don’t have a labour shortage because we are bringing in newcomers.
Frankly, one of the reasons why the GDP was as successful as it was during the post-pandemic period was because we had all this so-called excess demand. Pick a lane: You either want your economy to shrink because, as I said in my opening statement, economic growth — whether it’s GDP per capita, as Dr. Skuterud was talking about, or just plain, old GDP — will shrink at the rate of adoption of the technology that we are currently involved in. Our productivity has flatlined in Canada since about 2015.
GDP growth, or economic growth, is like the North Star for every government everywhere, regardless of political stripe. Everybody wants growth. How do you get growth? You get growth through, basically, three things. Number one is technology because you do things faster, cheaper and better, or you do something new. Number two is population growth, which is workforce growth. Number three is the old “more exports than imports” — it is what Donald Trump has been talking about — which is a better-than-thy-neighbour phenomenon, but it will work for a country. It could, at least temporarily, grow your economy.
Trade sucks everywhere because everybody hates everybody everywhere else. Technology has not done anything for growth for over a decade now because it has been lowering prices, not raising prices. What we are left with is population growth. If you say population growth and labour force growth — more employees — is a bad thing, then you have to be resigned to the fact that you are going to be lowering GDP.
As Dr. Skuterud said, adopting technology is a long process, unless it’s not. The “unless it’s not” is AI through Microsoft, Amazon and all these companies that are globe-straddling. When they unleash their AI that will get rid of the good-paying jobs, it’s going to happen like this. But we haven’t gotten there yet.
Right now, our formula for growth is more people. Let’s actually make better jobs, and match people and their skills to the jobs that we need. It isn’t just pouring in low-wage workers because, to Dr. Skuterud’s point, that has been the go-to formula in the last couple of years for hospitality, personal care workers, child care workers and all these crappy jobs that nobody wants to do — where we’re pouring in temporary foreign workers.
Senator Dasko: But it’s not just that, is it?
Ms. Yalnizyan: It’s mostly that. If you look at the numbers, that’s mostly where the temporary foreign worker stream is coming in. In regard to the Express Entry that Dr. Skuterud was also talking about, the people transitioning from temporary residents to permanent residents often come through the international student pathway.
Mr. Baldwin: I was not a great economics student, so I’m not going to debate the economist. I do struggle a little bit because I read some of the same demographic reports, and I’ve had the same conversations you’ve had — not just with employers, but also with government officials who have access to economic data and are saying the same thing.
The point I would raise — that has been on my mind — is more around whether we are substituting labour for some of the advancements around adopting technology. In a link to this committee’s work, it’s whether the ability to bring people into the country, whose skills we may not line up with very effectively — who then may end up in a lower-wage job or worse working conditions — is, in fact, giving Canadian employers an opportunity to not adopt technology at all, or as fast as they might otherwise.
Again, I don’t have figures to support that, but I think it’s a question worth pondering, as we think about how some of these bread crumbs seem to start to create a trail.
Senator Dasko: Thank you.
The Chair: Thank you. This has been absolutely fascinating. I have a final question because you have challenged us, Ms. Yalnizyan, to pick a lane. Time and time again, you’ve said, “Pick a lane.” If you were in our spot, which lane would you pick? You’re very practical.
Ms. Yalnizyan: I’m also an economist, and I do worry about our economic future. The two halves do not easily combine: to be humanitarian on the one side and to seek greater growth.
I need to think about the answer to your question, but you’re looking at the bread crumb trail the right way, and you’re the only ones doing it at the federal level, so God bless you.
The Chair: I want to tell you both that this has been most enlightening. On a personal level, I can tell you I came as an immigrant in the 1980s. My credentials weren’t recognized, and the bread crumb trail led me to the Senate. I know it’s an unusual story, but it’s a story that I like to tell to give people encouragement.
Thank you for the encouragement you have given us. Your wisdom has been greatly appreciated.
(The committee adjourned.)