(Adds remarks by Kenney about wages)
By Frank McGurty
April 25 The Canadian government said on Friday
companies should raise wages to encourage more Canadians to
apply for unfilled jobs, saying the freeze it imposed this week
on restaurants hiring temporary foreign workers is a wake-up
call for all employers.
The moratorium is on foreign hires in food-service
businesses only. It follows media reports that McDonald's Corp
restaurants turned away qualified Canadians while using
Canada's Temporary Foreign Worker Program to fill job openings.
Jason Kenney, the employment and social development
minister, said he was distressed that wages in Canada have
barely kept pace with inflation since the global economic
"It's about raising wage rates. It's about increasing
salaries. It's about increasing investments in training," he
said at a news conference. "We expect to see employers not just
in that sector, but in every sector, doing better."
The Temporary Foreign Worker Program was designed to let
employers go outside the country for new hires when unable to
find locals to do the job.
"Our government has been clear," Kenney said in a statement
late Thursday in announcing the freeze. "Canadians must have the
first chance at available jobs."
He said the Conservative government is considering
unspecified reforms of the program to make sure employers
recruit and train Canadians for jobs.
Canada blacklisted three McDonald's restaurants from the
program in early April, and the company ended up suspending all
applications for temporary foreign worker permits this week
while a third party conducted an audit.
Tim Hortons Inc, which operates more than 3,500 doughnut and
coffee shops in Canada, would not immediately comment on the
impact of the mortorium on its operations, but it said that
temporary foreign workers account about 5 percent of its
90,000-strong Canadian workforce.
The government is no longer processing new applications from
food-service businesses and would stop restaurants from hiring
foreign temporary workers even if it has already approved
applications, Kenney said.
The minister gave no indication that he supported a complete
shutdown of the practice of bringing in low-skilled workers,
saying only that the moratorium in food services would last
until his department completes a general review.
IMPACT ON UNEMPLOYMENT
An easing of the program's restrictions on hiring foreign
workers over the past decade has contributed higher unemployment
in some sectors in the provinces of Alberta and British
Columbia, according to a report released by the C.D. Howe
Institute this week.
Low-skill workers, such as those in the hospitality and
service industries, have been hit particularly hard, Dominique
Gross, the study's author, told Reuters.
"The local workers were penalized by the fact that it was
much easier to hire temporary foreign workers," said Gross, a
professor of public policy at Simon Fraser University in
Alexandra Fortier, a spokeswoman for Kenney, said Statistics
Canada had deemed the effect of temporary foreign workers on
employment to be negligible, representing 2 percent of overall
Canada has already tightened restrictions on the program,
which the C.D. Howe study said expanded from 101,000 foreign
workers in 2002 to 338,000 in 2012. It no longer allows
companies to pay foreign workers below the median wage for a
given job and now charges a C$275 ($250) fee for each
But the study found those changes insufficient, noting that
the fee was too low to serve as a deterrent to applications.
Also, empirical labor market data on which to base decisions is
lacking, it said.
"We recognize the need for better labor market
information," Fortier said. "That is why we are working with
StatsCanada on ways to get more robust labor market information
and are also working with provinces."
The moratorium announced this week has no effect on a
temporary foreign worker program for the agricultural industry.
The government said there were "proven acute labor shortages" in
that industry, and unfilled farm jobs were short-term "by
The Canadian Broadcasting Corp reported this month that a
McDonald's franchise owner in Victoria, British Columbia, was
bringing in foreign workers at three locations, while turning
away seemingly qualified Canadian job-seekers and cutting the
local staff's working hours.
That was followed by similar media reports involving other
McDonald's restaurants in Western Canada.
The company, which said temporary foreign workers account
for about 4 percent of its 85,000-member Canadian workforce, has
cut ties with the Victoria franchise-owner but has defended its
broader use of the program. It said it has used the program only
as a last resort in markets where there are severe labor
McDonald's is not the only company to face a backlash.
Outside of food service, Royal Bank of Canada was
criticized last year after a CBC report that U.S. outsourcing
company used temporary foreign worker visas as it worked to
replace staff in RBC's Toronto investor services division.
(Additional reporting by Solarina Ho in Toronto, Julie Gordon
in Vancouver and Randall Palmer and Louise Egan in Ottawa;
Editing by Lisa Von Ahn and Peter Galloway)