(Ottawa) The federal government’s change of direction on temporary immigration has sparked a heated debate over how to address labour shortages.
Prime Minister Justin Trudeau announced Monday that the federal government will tighten rules and toughen eligibility criteria to reduce the number of temporary foreign workers in the country. He urged companies to hire and train Canadian workers.
The pandemic and the resulting labour shortage had led the government to be more flexible on the entry of temporary foreign workers into the country.
Business groups have endorsed policies that encourage immigration and the arrival of foreign workers to address labour shortages, but economists reject the very idea of government intervention in this area.
“Ideally, governments should do nothing, but it’s hard for them to do nothing when employers are upset,” says Christopher Worswick, an economics professor at Carleton University in Ottawa.
Many economists argue that a tighter labor market is good for workers and the economy. They say the shortage of workers forces companies to raise wages and invest more in technology to boost productivity.
“When governments and business groups talk about shortages, it’s not clear what they’re talking about. Do they want lower wages so they can hire more employees? Hey, that’s not how the economy works,” says P.r Worswick.
Data from the Department of Immigration, Refugees and Citizenship indicates that 183,820 work permits were granted to foreign workers in 2023, an increase of 88% since 2019.
The pr Worswick is even calling for the abolition of the program for temporary foreign workers. The government should give more priority to the high-wage component of its immigration programs.
Economist Mike Moffatt — one of the experts who addressed federal ministers earlier this week — is also calling for the elimination of the stream for low-wage jobs in non-agricultural sectors.
“We have to be careful with these demands because they don’t reflect the reality of the economy,” counters Diana Palmerin-Velasco, Senior Director, Future of Work at the Canadian Chamber of Commerce.
She argues that many low-wage positions still need to be filled in the country, particularly in small communities where population decline makes it difficult to recruit employees.
Mme Palmerin-Velasco also rejects the idea that the presence of temporary foreign workers hurts wages.
If businesses have to raise wages to attract workers, who will pay the price? The bill will be passed on to consumers at a time when our economy is not showing signs of strength.
Diana Palmerin-Velasco, Senior Director, Future of Work at the Canadian Chamber of Commerce
The pr Worswick wants Canada to try to attract the elite of skilled workers. But immigration should not be aimed solely at solving labour crises, because these are unpredictable.
“We need to focus on skilled immigration. We need to stop talking about labour shortages. We need to convince businesses to raise wages if they can’t fill jobs or, as the Prime Minister said, to train their employees.”
He said he does not know whether the federal government’s change of direction signals a new focus on the labor shortage.
“It was the housing crisis that caused all this,” he said. “Governments like to talk about labour shortages. I don’t know if we’ll change the narrative on that, but the country’s capacity to accommodate people is now an issue.”