Canada's fast-food industry's access to the embattled Temporary Foreign Worker Program has been suspended. Employment Minister Jason Kenney made the announcement after the federal government's program took another hit Thursday, this time from the C.D. Howe Institute.
Companies have been accused of using the program, originally intended to fill skill shortages where Canadians weren't available, to hire lower-paid and/or more pliable workers from abroad.
But the Ottawa-based, nonpartisan economic think tank has just issued a report saying there's evidence the program has had an adverse impact on the unemployment rate in Alberta and British Columbia, two provinces with a high percentage of temporary foreign workers.
Study author Dominique M. Gross of Simon Fraser University's School of Public Policy looked at the the labour markets in the two western provinces.
She noted Ottawa eased hiring conditions under the program several times in an apparent response to reported labour shortages in some occupations, especially in western Canada.
In the decade from 2002 to 2012, the number of people employed under the program rose to 338,000 from 101,000, she said, "yet the unemployment rate remained the same at 7.2 per cent."
"Furthermore, these policy changes occurred even though there was little empirical evidence of shortages in many occupations," Gross wrote in her summary.
"When controlling for differences across provinces, I find that changes to the (program) that eased hiring conditions accelerated the rise in unemployment rates in Alberta and British Columbia."
While reforms being undertaken by the Conservative government are welcome, Gross said, they're "probably not sufficient, largely because adequate information is still lacking about the state of the labour market, and because the uniform application fee employers pay to hire [temporary foreign workers] does not adequately increase their incentive to search for domestic workers to fill job vacancies."
What the report seems to say is a lack of solid data about where particular shortages existed allowed employers to win permission to bring in foreign workers where it's possible Canadians were available to take those jobs.
"A lot of the shortages we saw very, very specific, often rural and remote areas with the difficulty in attracting workers there," C.D. Howe's senior policy analyst, Colin Busby, told CBC News.
"The government doesn't really have the types of information necessary to declare the severity of these labour shortages."
The report found the unemployment rates in B.C. and Alberta went down and up by a larger amount than the rest of Canada.
"On average, the variation in the unemployment rate during the whole period was 2.3 percentage points in the rest of Canada and 6.2 percentage points in Alberta and British Columbia," the report said, "which suggests the [program] potentially accelerated the rise in unemployment by about 3.9 percentage points in the two provinces between 2007 and 2010."
The program has been under fire for some time. It made headlines a couple of years ago when a mining firm hired more than 200 Chinese miners for a new northeastern B.C. project because it said it was using a mining method not done elsewhere in Canada.
The Federal Court of Canada upheld the applications last May but the public scrutiny created by the case spurred the government to review the program.
More anger brewed when it was learned a contractor working for the Royal Bank of Canada was using the program to import IT workers from India to be trained by their Canadian counterparts, who would then lose their jobs when the work was moved overseas.
The bank quickly reversed itself under the public backlash and promised the work would not be sent offshore.
The program's latest troubles began last week with news reports that some McDonald's outlets in B.C. were hiring temporary foreign workers while cutting the hours of existing Canadian staff. The fast-food chain quickly suspended the franchise-holder and has since halted importation of foreign workers while it conducts an audit of how the program is used.
Now Tim Hortons says it's severing its relationship with a franchisee that's being investigated after a temporary foreign worker from the Philippines complained his employer was clawing back overtime pay in cash.
The complaint initially cropped up last year related to a Tims outlet located in Fernie, B.C., near the Alberta border. Workers said they were paid overtime on their cheques but were intimidated into handing it back in cash out of fear it would affect their applications to stay in Canada permanently.
Federal Employment Minister Jason Kenney has ordered investigations into possible misuse of the program but said Wednesday only a relative handful of companies are abusing it.
“Obviously, in some small numbers, there are cases of abuse, and we don’t tolerate those; we intend to crack down on them severely,” Kenney said, according to The Canadian Press.
“The more important thing is that we prevent abuse in the first place and that’s why we’ve tightened up the rules, and we’ll continue to do so.”
The fresh complaints, coupled with the C.D. Howe's finding that Ottawa hadn't done its homework to justify the explosion of temporary foreign workers, likely will fuel more demands the program be scrapped.