The Trudeau government is down nearly 20 points in the national polls. Justin Trudeau himself, in between fielding parries from Pierre Poilievre in Parliament, is now fighting off his own caucus colleagues just to keep his political career alive. This late into its tenure, the decline in fortunes for this government has many contributing causes. Undoubtedly, though, one of the biggest has been the Liberals’ unsustainable increases in immigration, and in particular the mishandling of the temporary foreign worker (TFW) program.
The government has finally started to concede that something needs to change. Desperate to flip its fortunes, this week Trudeau announced a cut to immigration levels following years of extraordinary increases.
This comes on the heels of the government announcing a set of restrictions on the TFW program on August 26, with more on September 18, aimed at reducing the use of the program by employers to fill job vacancies with temporary foreign labour. While there are genuine reasons why employers in certain sectors and regions need this program, they don’t account for its recent exponential growth, particularly in low-wage positions.
What makes today’s TFW program challenges stand apart from past ones is that they were entirely predictable. This isn’t a case of formulaic growth or even benign neglect. The massive increase in temporary foreign workers was a choice.
It stems from the Trudeau government’s decision to deregulate virtually all aspects of the program: lifting caps on low-wage workers in areas of high unemployment, performing compliance inspections remotely, and fast-tracking applications by skipping key steps designed to reduce fraud and maintain program integrity.
More broadly, it is consistent with the approach taken by the government after 2015 across various immigration programs, whether it’s permanent, temporary, or student. Across successive immigration ministers, the Trudeau government opted for bigger numbers and fewer safeguards.
Within mere months of taking office after its late 2015 election win, then-Immigration Minister John McCallum was blunt about the new Liberal government’s designs on TFWs: “We’re also going to reduce some of the barriers and the silly rules…in order to give companies freedom to bring in the best and the brightest. We’ll get rid of many of these [required] labour-market impact assessments which slow things down enormously.”
What he characterized as “silly rules” were part of an overhauled framework aimed at putting Canadians first for available jobs. The Trudeau government inherited a system that had been significantly reformed barely 18 months prior. After an earlier series of incremental steps to curtail misuse of the program, the former Conservative government announced a substantial overhaul to the program in 2014 under then-Employment Minister Jason Kenney.
That set of comprehensive changes included a restriction on hiring low-wage TFWs in areas of high unemployment, a 10 percent cap on the proportion of an employer’s workforce that can consist of low-wage foreign workers, investments in better labour market information, and stronger penalties for employers that misused the program. It also included replacing the old Labour Market Opinion (LMO) requirement with the Labour Market Impact Assessment (LMIA), mocked by the Liberals, which now required employers to explain why Canadians weren’t hired for a vacancy. As part of the reforms, wage levels replaced the National Occupational Classification (NOC) as criteria, because wages could offer better on-the-ground insight into local market conditions than bureaucratic NOC codes.
Altogether, the use of low-skill and low-wage foreign workers (outside of the Seasonal Agricultural Worker Program) as an operating model for businesses was nearly extinguished by those 2014 reforms while the “temporary” aspect of the program was clarified for higher wage occupations.
Instead of preserving the newly reformed system, the Liberals opted to take a sledgehammer to it and open the floodgates. It began with 2016’s quiet unannounced scaling back of restrictions for seasonal industries. It culminated in 2022’s post-pandemic opening of the program, the most brazen loosening since a previous Liberal government created the low-skill stream of the program in 2002. (While the federal TFW program had existed since the 1970s, it did not actually include a lower-skill stream until 2002.)
The more recent post-pandemic deregulation removed the rule barring employers from bringing in workers to low-wage occupations in areas where unemployment was over 6 percent. The government removed the 10 percent cap on the proportion of an employer’s workforce that can consist of low-wage foreign workers, raising up to 20 percent and up to 30 percent in seven select sectors.
The post-pandemic timing remains curious. An estimated three million Canadians were laid off during the pandemic and a further two million saw their working hours reduced, according to the Bank of Canada. Instead of incentivizing the re-hiring of Canadian workers, the Trudeau government lifted restrictions on hiring low-wage foreign workers in areas of high unemployment. More curiously, this was done amidst an ongoing housing and affordability crisis wherein many Canadians are turning to second jobs to make ends meet.
The latest TFW directional shift only adds uncertainty for those employers who use the program in good faith to meet labour needs when Canadians are unavailable for advertised jobs. It’s expected that 700,000 skilled trades workers will retire from Canada’s labour force within this decade, feeding a persistent and growing skills shortage in addition to Canada’s broader ongoing economic productivity challenges.
Canada’s aging population and the comparatively long geographic distances between population centres relative to other nations all add to the complexity of these problems. That there are sustained massive labour shortages in key sectors after a historically unprecedented high level of immigration, both temporary and permanent, speaks to how misaligned Canada’s migration programs have become with economic realities.
A policy challenge facing the next government after the coming election will be to meaningfully stop repeating the TFW program reform cycle wherein governments tighten or loosen the program in perpetuity every few years when it reaches a breaking point. Continuing this is untenable and only distracts from a long-overdue discussion on addressing Canada’s long-term labour market challenges. The current cycle only contributes to the rapid erosion of public confidence in Canada’s migration programs in addition to creating perpetual unpredictability for well-meaning employers who do follow the rules.
One policy mechanism for the next government to consider is the use of prescriptive legislation to curtail the relative ease with which TFW program changes can be made. Moving more of the program into legislation before Parliament where change needs to be publicly debated and voted on could massively increase transparency. It would largely eliminate changes done quickly and often quietly through regulation or through delegated authority to unelected officials.
Such a change would significantly shift the burden of evidence and justification, requiring both the government and MPs to explain their position directly to Canadians ahead of any significant changes in the TFW program direction.
This could give Canadian communities and businesses a chance to make their voice heard before they are impacted, a component that’s largely been missing so far.
The government’s signal this week that it is willing to not only entertain but actually implement restrictions on its broader immigration agenda is welcome, but far too little, too late. While the high-profile announcement of cuts to the number of permanent residents allowed into Canada is much needed, broader problems persist, particularly with the TFW program. It will be up to the next government to solve them.
