Pipeline Economics: The dollars & cents of the energy export debate
When Alberta's oil sands started being commercially developed almost 50 years ago, the biggest challenge for companies was finding cost-effective production technologies. Producers such as Sun Oil Company (now Suncor Energy) and Syncrude focused on securing capital rather than launching public relations campaigns.
Industry and the Alberta government might have some regrets in that regard. As opposition to the carbon-intense development of the massive resource mounts, even seemingly benign pipelines have become vehicles in the battle over bitumen.
Energy corporations, as well as provincial and federal politicians argue the ability to move bitumen — either raw or upgraded — to markets is vital for Canada's economic prosperity. First Nations, environmental groups and landowners believe blocking pipelines will halt further development of oil sands and reduce the risk of oil leaks polluting land and water.
Lack of access to markets has Canadian crude trade at a massive discount to U.S. oil benchmark West Texas Intermediate, reaching a record $42.50 per barrel discount in December.
"If we do not go ahead with infrastructure, with pipelines to move our resources to tidewater and on to markets that want the resources, we will see them stranded and our legacy lost," federal Energy Minister Joe Oliver said in a recent interview. "The people who will be hurt by this will be Canadians and we don't want that to happen and we are determined it will not happen."
The gap between Canadian and U.S. crude prices is expected to narrow substantially by 2014 when pipeline expansions in Canada and the U.S. start flowing, increasing the value of exports by an estimated $8-billion per year. The discount currently hovers around $22 per barrel.
"The so-called 'bitumen bubble' is having serious consequences for government finances in Alberta and the rest of Canada and is costing the Canadian economy at least $20-billion per year," says Alex Pourbaix, TransCanada president of energy and oil pipelines. "Narrowing this price gap will ensure that Canadians and Americans realize the best possible value for their precious natural resources."
The so-called 'bitumen bubble' is having serious consequences for government finances in Alberta and the rest of Canada and is costing the Canadian economy at least $20-billion per year
Mr. Pourbaix says Keystone XL will also support job growth through increased corporate and tax revenues, adding there will be an estimated 2,200 jobs building the line through Alberta and Saskatchewan. The pipeline also is projected to add $3.5-million per year in Alberta property taxes and $1.3-million in Saskatchewan.
While TransCanada and the Alberta government are focused on trying to convince the U.S. public of Keystone's economic benefits, the pipeline is more important to Alberta and Canada, adds Frank Atkins. economics professor at the University of Calgary.
"If we don't get this, it's a big blow," he says. Keystone will help producers continue the expansion of the oil sands, while its delay — and uncertainty over accessing the U.S. — has some producers slowing or temporarily capping investments in the region.
The benefits of oil sands development extend far beyond Western Canadian borders, Mr. Atkins notes. Within the next 25 years, just under a million people will hold oil sands related jobs, up from 75,000 two years ago, and 126,000 of the total will be held by people outside of Alberta, according to a 2012 Conference Board of Canada report.
But for union leader Gil McGowen, Keystone XL would allow more than the movement of bitumen to market. The president of the Alberta Federation of Labour sees the pipeline drain jobs from Alberta and Canada, high-paying, long-term work associated with upgrading and refining bitumen in the province. "We think that pipelines like Keystone XL will simply act as conduits to take high-paying jobs in upgrading and refining out of the country, down the pipeline, to places like the American Gulf Coast and perhaps to China," he says.
Workers in upgraders and refineries earn about two-thirds more a week than the average worker in Canada, notes the association, which represents 145,000 unionized workers in Alberta.
The province of Alberta's own efforts to promote its bitumen royalty in-kind program in 2009 outlined the benefits of an upgrading, refining petrochemical hub as increasing provincial and municipal revenues by $748-million, adding almost 2 million jobs and increasing the GDP by more than $5-trillion over two decades.
Taking all into account, the loss of refinery jobs and spin-off jobs triple the loss for each dollar gained on exporting bitumen, Mr. McGowan argues.
The Canadian Association of Petroleum Producers notes oil sands employ 112,000 people across Canada, from which goods, materials and services used to build oil sands operations are sourced. But with a tight labour market expected to become more acute as boomers retire, the issue of jobs flowing south is a non-issue, says spokesman Travis Davies.
"This isn't about jobs. The oil sands are going to be supplying more jobs that we can handle," he says. "The economic case for building brand new refineries is a tough one; we have existing product and existing customers that want our product on the Gulf Coast and to the degree that we should take advantage of that [Keystone] is clearly good for Alberta and good for Alberta workers."
Getting the stuff to the U.S. is important, but we would still be a seller with one customer, which is not good for any business
Why go south? The region between Texas and Louisiana has the most oil refining capacity in North America at 8.5 million barrels a day, including about three million barrels of daily capacity for heavy crude. Producers such as Suncor, a major backer of Keystone, much prefer to flow bitumen to existing facilities rather than invest billions of dollars in developing their own. The veteran oil sands producer is expected to red light its $11.6-billion Voyageur upgrader project any day now after warning the economically challenged project was not a "strategic investment."
Mr. Atkins points out Enbridge Inc.'s Northern Gateway pipeline project, from Alberta to Kitimat, B.C., is also an important option for producers and Canada.
"If you can get to the west coast, you can get it to Asia and Asia has huge demand we've got to capitalize on it because if we don't we miss out on a big market," he says. "Getting the stuff to the U.S. is important, but we would still be a seller with one customer, which is not good for any business."
Production of non-upgraded bitumen is expected to increase by 17% to 1.04 million barrels per day. Bitumen upgraded to refinery-ready feedstock is slated to rise to 1.03 million barrels per day.
And come what may, the product will ship to markets, either by pipeline, railcar, truck or barge — all alternatives being used and expanded on by Canadian producers.
The debate on bitumen pipelines out of Alberta could cool down once Keystone XL's future is determined, but don't expect the issues around transportation to go away, says analyst Phil Skolnick, managing director with Canaccord Genuity.
"Keystone is a big fix but it's not a permanent one," Mr. Skolnick says. "We'll run into that situation again when other oil sands projects come online in 2020-2021."
Edmonton Journal, Friday Apr 12 2013
Byline: Dina O'Meara, National Post
Alberta town would be 'shut down' without foreign workers
After news of RBC's outsourcing of jobs caused a nationwide outcry, one small Alberta town said it depends on foreign workers to fill jobs that Canadians refuse.
In Rocky Mountain House, a town in central Alberta, business owner Nikki Searth said she relies on the program because she has trouble finding a student who will accept an $11-an-hour cashier job.
According to Searth, it wasn't always so."Our ethics have changed with work. I know when I was younger everybody had a job," she told CTV News. "I find today it's not the case."
The turning point for town was the oil boom of 2007, after which it became hard to compete with the lure of a six-figure salary.
"A lot of businesses scaled back the hours, a lot of them were shutting days they weren't before. And owners were back in the kitchens," Donald Verhesen, a town councilmember, said.
Today there are "quite a few foreign workers in Rocky," one resident told CTV News.
"I know the Burger Baron in the town close to here is getting foreign workers, because you just can't get anyone to work," she said.
In fact, out of the 340,000 temporary foreign workers currently in the country, 85,000 are in Alberta, more than any other province.
To labour unions, that is far too many.
"This is not the way you build a country, but it is the way you break a labour market and drive down wages and conditions," Gill McGowan of the Alberta Federation of Labour said.
However, there are fears from the industry about changes to the foreign worker program.
The tourism association in particular relies heavily on foreign workers.
In a letter to several ministers Friday, the association warned that changes to the program could hurt the $84.8 billion industry.
Rocky Mountain House residents also fear what would happen to the town if there were no temporary foreign workers available to fill jobs.
"It would be shut down because there are not enough young people to work in these places," one resident said.
CTV News, Friday Apr 12 2013
With a report by CTV Daniele Hamamdjian
Who hires temporary foreign workers? You’d be surprised
Todd Bender doesn't seem like he'd be in the market for temporary foreign workers: He's executive director of CityKidz, a faith-driven group working with young people in inner-city Hamilton. His focus is local.
But three years ago, while hiring a youth coordinator, the hiring team realized their preferred candidate – a young woman from the Bahamas who had been studying in Canada – didn't have the right visa to work in the country.
"It wasn't until near the end of the interview process the question came up, and by then we were committed," Bender said. So they started filling out paperwork.
"It was quite a learning curve. ... I remember feeling there were just a lot of hoops to jump through," he said. Every year they wanted to keep the woman on, they had to re-post the position and go through an interview process again.
"She was here for three years. Did a phenomenal job. It worked out great," he said. By the time she left, she was awaiting her Canadian citizenship.
Who's hiring temporary foreign workers?
Lots of people: A range of companies and government agencies, according to a document posted online by the Alberta Federation of Labour, obtained through a freedom-of-information request. It lists 90 pages of employers, including the company name and province of each, but not whom they hired, when or for what work.
Human Resources and Skills Development Canada told Global News it couldn't give out those details because "the information requested is not public."
The Bank of Canada, the Canada Pension Plan Investment Board, Tim Hortons, McDonald's, Maple Leaf Foods, the City of Vancouver, the Edmonton Police Service and eateries of various vintages are among the thousands of employers who've been approved for accelerated labour market opinions: Their need for foreign workers, they said (and the federal government agreed), was so urgent they required an expedited approval process.
Canada's Temporary Foreign Worker program came under scrutiny this week over claims Royal Bank of Canada was replacing Canadian employees with workers contracted from overseas. The ensuing furor was enough to prompt a public apology from RBC Thursday.
stensibly designed for urgently needed skilled labour, statistics from Human Resources and Skills Development indicate the largest group is comprised of "intermediate and clerical" workers. The program "is intended as a last-resort, short-term solution so businesses can continue to grow," HRSDC said in an e-mail. Its swift growth has prompted concerns not just for Canadian workers, but for the rights of often vulnerable temporary ones.
While the spectre of outsiders stealing Canadian jobs looms large, the reality isn't quite so clear cut.
Global News contacted more than a dozen employers approved for accelerated labour market opinions to ask about their exceptional need for temporary foreign labour.
Many – including the Bank of Canada, the Canadian Pension Plan Investment Board, Maple Leaf Foods and Caterpillar Canada, whose closure of its Electro-Motive plant in London walloped the southwestern Ontario community – did not respond or refused to comment.
The Edmonton Police Service applied for expedited permission to hire temporary foreign workers when the people they wanted to hire – both already working in Canada – needed new visas.
"They were the most qualified," said spokesman David Schneider.
One was in charge of identifying and analyzing risks in the police service's environment; he moved on when his job was complete. The second is leading a review of the police service's policy and procedures.
Schneider noted candidates for these positions are "not easy to find: We look for backgrounds in policing plus skills in that particular area."
The city of Vancouver has hired three workers under the accelerated labour market opinion process, says spokeswoman Wendy Stewart. One is in planning and development, another was hired last year to provide specialized fire engineering services to the fire department, but has since returned to his home country; and one is joining the equipment services department.
"All of these individuals were hired following extensive recruitment processes which failed to identify interest on the part of equivalently qualified Canadian applicants," Stewart said in an email.
McDonald's Canada employs more than 2,000 "international recruits," a spokeswoman wrote in an e-mail.
Tim Hortons has been hiring temporary foreign workers since 2005, spokeswoman Alexandra Cygal wrote in an e-mail.
"Without this employment program," she added, "many Tim Hortons restaurants would not be able to operate full time or, in many cases, remain open at all."
The Conservative government has said it plans to tighten the rules and ensure employers have no Canadian option before recruiting workers from abroad.
"We have to do our due diligence, and we recognize that," MP Kellie Leitch said in an interview with Global News. "We have committed to reviewing this and fixing this program, because we realize there have been some discrepancies. ... We need to pick up our socks."
Global News, Thursday Apr 11 2013
Federal program being misused?
The controversy over the outsourcing of dozens of Canadian jobs by the Royal Bank of Canada has put the spotlight on the much bigger issue of how Canada's Temporary Foreign Worker Program is being utilized.
The Alberta Federation of Labour added its voice to the debate Tuesday by calling for a review of the federal program because of concerns the program is being used to replace Canadians workers and drive down wages.
There appears to be legitimate cause for concern. The program was originally intended to assist employers in hiring temporary foreign workers to fill high-skill jobs because of the shortage of skilled workers already in Canada. Instead, the AFL points out that since the program was announced a year ago, more than 2,400 permits have been approved to hire foreign workers for low-skill service industry jobs.
The federal Accelerated-Labour Market Opinion (ALMO) program allows employers to pay foreign workers up to 15 per cent less than Canadian workers are paid. It also speeds up the process of hiring foreign workers so it can be done within 10 days.
It doesn't require a degree in rocket science to figure out that being able to pay workers 15 per cent less is going to be an attractive lure for business operators. And it appears businesses are taking full advantage of the opportunity.
"The percentage of ALMO approvals for businesses that largely employ low-skilled workers appears to be in direct contradiction to the stated parameters of the program," AFL president Gil McGowan wrote in a letter to federal auditor general Michael Ferguson.
In a Canadian Press story in Wednesday's Herald, McGowan noted that documents obtained through the Access to Information Act show that employers using the ALMO program include fast-food restaurants, convenience stores and gas stations.
"Are we supposed to believe that these are 'high-skill' employment opportunities?" McGowan asked.
Dan Kelly, president of the Canadian Federation of Independent Business, defended the federal program, saying many small- and medium-size employers need temporary foreign workers to fill jobs, and the need is most pressing in Western Canada and in rural communities across Canada.
"I take it as a positive that businesses of all skill levels are able to access this expedited process," said Kelly. "Our members really need those expedited processes."
The issue, however, is are those workers preventing Canadians from landing those jobs?
McGowan suggested a couple of ways employers could deal with the difficulty in finding workers - they can either offer higher wages or the federal government can increase immigration. Of course, offering higher wages isn't an attractive option for businesses, and for those just squeaking by, it might not be an option at all.
But the bottom line is it appears the federal temporary foreign worker program is not being used the way it was intended, and that warrants an investigation.
Lethbridge Herald Opinion, Thursday, Apr 11 2013
Fast-food chains abusing foreign workers program, says labour leader
Program intended to address shortages in high-skill jobs
A federal program intended to fast-track skilled workers into Canada is instead being used by a "who's who" of fast-food chains and service industry companies to import low-wage employees, says the Alberta Federation of Labour.
The AFL said Tuesday its research found half the successful applications for temporary foreign workers under the "accelerated labour market opinion" (ALMO) program last year were from employers who typically employ low-skilled workers, such as fast-food chains, gas stations and convenience stores.
"What's disturbing to us about the list is the majority of applications were for employers that were not normally employing highly-skilled workers," AFL president Gil McGowan said.
"It's a who's who of the Canadian service industry sector."
By the numbers: How the program is used in Alberta
The initiative, started by the government last April, gives employers with an established track record in the temporary foreign workers program the necessary go-ahead within 10 business days.
Employers who want to hire a temporary foreign worker must first get a labour market opinion from the federal government agreeing there is no Canadian capable of filling the position.
When it launched the program last April, the government said the initiative was intended to address labour shortages in "high-skill occupations," including skilled trades.
But McGowan said documents obtained by the AFL under access-to-information legislation demonstrate otherwise.
Temporary Foreign Worker Approvals
According to the AFL, half of 4,839 ALMO approvals nationwide between April and December 2012 were "questionable" because they were granted to companies that employ mainly unskilled workers.
Alberta had the highest number of ALMO applications of any province or territory: 2,640.
The AFL considered 58 per cent of Alberta applications — 1,542 — as questionable.
"It stretches the bounds of credulity that all these employers have been using the program to hire highly-skilled workers or managers," McGowan said.
However, one well-known Canadian company included on the list of ALMO applicants — Tim Hortons — said it has a legitimate need for a high number of skilled workers.
"These individuals often have many years of industry experience and education within the restaurant and hospitality industries and are crucial to our business," spokeswoman Alexandra Cygal said via email.
"Every Tim Hortons restaurant requires about four supervisors and at least one manager to handle our 24/7 business."
Tim Hortons franchisees have been hiring temporary foreign workers since 2005, but Cygal stressed they do so only after exhausting their options locally.
"Without this employment program, many Tim Hortons restaurants would not be able to operate full time or, in many cases, remain open at all," she said.
The AFL has asked federal auditor general Michael Ferguson to investigate the ALMO initiative.
The AFL's concerns come just days after reports the Royal Bank of Canada is laying off 45 employees in Toronto and replacing a portion of them with foreign workers and outsourcing the remainder of positions abroad.
RBC has denied the report, saying it is not using foreign workers to replace employees in Canada.
A spokeswoman for Human Resources and Skills Development Minister Diane Finley said Tuesday the government is "very concerned" about the recent controversies involving the temporary foreign worker program.
"The program exists to address real and acute labour shortages in certain sectors and regions across the country on a temporary basis. It was never meant to replace Canadians with foreign workers," Alyson Queen said in an emailed statement.
"Officials are investigating and will look into any evidence that the program is being misused."
Although McGowan has specific criticisms of the ALMO process, the AFL wants the temporary foreign worker program abolished.
The program allows employers to pay temporary workers up to 15 per cent less for high-skill positions and up to five per cent below average wages for low-skill jobs — but not lower than the local minimum wage.
"The real problem is not rogue employers, but the temporary foreign worker program itself," McGowan said.
Calgary Herald, Thursday, Apr 11 2013
Byline: Jason Van Rassel
RBC iGate scandal: Ottawa urged to publicize Canadian employers using foreign temps
The RBC scandal is the “tip of the iceberg,” a unionist says; taxpayers have a right to know who’s benefiting and where the real labour shortages are.
The RBC scandal is the "tip of the iceberg," a unionist says; taxpayers have a right to know who's benefiting and where the real labour shortages are.
Ottawa must make Canada's temporary foreign workers program more transparent and accountable by publicizing the names of employers who bring in migrant workers and the jobs they fill, critics say.
Canadian taxpayers have a right to know which employers are benefiting from the $35.5 million a year taxpayers pay to process their applications for a "labour market opinion," say major labour groups. Potential employers aren't charged a fee for this service, which is required to justify their claim that they need to bring in foreign workers to fill a need.
"Transparency is incredibly desirable for Canadians. This can act as a check against disingenuous Canadian employers," said Karl Flecker of the Canadian Labour Congress (CLC).
"If the labour shortage is genuine, why would employers not want the data made public, so the government can take on job training strategies? By keeping it quiet, they are not helping our work force development."
The call came amid an ongoing investigation by Human Resources and Skills Development Canada (HRSDC) into the use of foreign workers by oursourcing company iGate to replace 45 Canadian employees in information technology at the Royal Bank of Canada.
Flecker said the CLC has been trying in vain to obtain information from the government about participating employers since 2006. That was the year the temporary foreign worker program began to explode as it was opened up to "every legally recognized occupation" by the Conservative government.
"It's important that we know who is applying so we can identify if there is a genunine shortage," Flecker explained. "Both the federal government and the provinces are understaffed with their labour inspectors. (The unions) have the ability to assist them to meet with migrant workers about their health and safety and community integration."
Employers may argue their hiring practices are private commercial information. But University of Toronto law professor Audrey Macklin points out that government is accountable to the taxpayers who fund the program.
"All Canadians have an interest in this," Macklin said. "The real story here is not whether employers are behaving badly. They are basically responding, in a predictable way, to the incentive deliberately created by a government policy.
"When you make it easier and faster to bring in migrant workers and allow employers to pay them 5 to 15 per cent less, that's a predictable outcome."
Naveen Mehta, general counsel for United Food and Commercial Workers Canada, said his union has also been denied access to the employer information.
"We've been frustrated along the way (trying) to access the information. This will absolutely be a beneficial piece of a larger, transparent regime," said Mehta, whose group has been lobbying to get a migrant worker commission established to adjudicate on the employment of foreign temp workers.
Mehta said some Canadian employers set unattainable qualification requirements in their recruitment to justify turning to migrant workers. He gave as an example Vancouver-based HC Mining, which demanded Mandarin-speaking miners and got approval to bring in 201 workers from China.
Through an access to information request, the Alberta Federation of Labour recently obtained a long list of employers whose application for temporary foreign workers was fast-tracked and approved by the federal government under the Accelerated Labour Market Opinion process.
The list, which does not include regular LMOs, includes 900 Ontario-based employers ranging from restaurants to retailers, universities, charitable groups, IT companies such as CGI Information Systems & Management Consultants, accounting firms such as Pricewaterhouse Coopers, financial institutions like the Bank of Canada and even tae kwan do academies.
AFL president Gil McGowan said many of these LMO applications have been "rubber-stamped."
He believes the scandals at RBC and HC Mining are just the tip of the iceberg.
"This isn't being used as a stop-gap, and it isn't a last resort for remployers," said McGowan, who is calling for an inquiry into the migrant worker program.
Both HRSDC and Citizenship and Immigration Canada did not respond to the Star's inquiry about employers who received favourable LMOs.
Related: The $1-billion-a-year company at the heart of the RBC temporary foreign worker controversyThe $1-billion-a-year company at the heart of the RBC temporary foreign worker controversy.
TheStar, Wednesday, Apr 10 2013
Byline: Nicholas Keung, Immigration reporter
Rise in foreign temp workers questioned by labour groups
Labour economist says program allows firms to keep wages low
The Alberta Federation of Labour called for an inquiry Tuesday after it obtained a government list of more than 4,000 companies given approval to hire temporary foreign workers last year, many in the service industry.
"You look down this list and what you see is McDonald's, Tim Hortons, and Subway. This list goes on. It stretches the bounds of credibility that all of these employers have been using temporary foreign workers to hire skilled workers," said Gil McGowan, president of the Alberta Federation of Labour, on CBC News Network's Power & Politics.
McGowan's comments come after a CBC story this week of one man's experience training foreign workers to take his job drew a fire storm of controversy and a hard look at Canada's temporary foreign workers program.
David Moreau told the CBC he and 42 other IT workers at RBC are being replaced by a foreign workforce.
"The new people are in our offices and we are training them to do our jobs," he said. "That adds insult to injury."
The head of RBC denied the bank is replacing Canadian workers with temporary foreign workers. Foreign workers were hired by iGate, an outsourcing firm, which has a contract with the bank to provide IT services.
Kelly Leitch, parliamentary secretary for the minister of human resources and skills development, said the government is looking into it.
"We have some significant concerns about what's going on in the temporary foreign workers program and that's why in (the budget) we've committed to fix the challenges that exist so Canadians can be better connected to jobs."
Labour economist Erin Weir says that kind of review is essential: "This should lead to a broader debate about the temporary foreign worker program. Is it really addressing labour shortages? Or is it undermining job opportunities and wages in Canada?"
Program has ballooned
The program began in 1973 to fill a gap in the labour market for jobs Canadians could not or would not fill — domestic workers and agricultural workers as well as highly skilled jobs, such as specialist physicians and professors.
"The idea of having a temporary foreign worker program is legitimate," according to Prof. Ian Lee at Carleton University's Sport School of Business. "The Germans, other European countries and the U.S. all have this kind of program. The issue is to have the right checks and balances to ensure it isn't abused."
Gil McGowan, president of the Alberta Federation of Labour, says a government list showing thousands of jobs going to Temporary Foreign Workers stretches the credibility of the program.Gil McGowan, president of the Alberta Federation of Labour, says a government list showing thousands of jobs going to Temporary Foreign Workers stretches the credibility of the program. (CBC)
But critics suggest those checks and balances have been undermined by recent changes to the program. The high-skill segment made up more than 50 per cent of temporary foreign workers, but all that changed in 2002. That's when the federal government under the Liberals began a pilot project adding a new category of "low skilled workers."
According to a recent report by the faculty of business at Athabasca University in Edmonton, the "low skilled category now dominates the temporary foreign workforce, with the top categories now including food counter attendants, kitchen helpers, cooks; construction trades, helpers and labourers, light-duty cleaners and administration workers including information technology."
In 2006, the new Conservative government expanded the pilot project, and added "fast-tracking" for some jobs in Alberta and British Columbia. The new list of jobs called "regional occupations under pressure," reduced the obligation by employers to seek out Canadian workers first.
The government document obtained by the Alberta Federation of Labour suggests employers such as fast food operators like McDonald's and Tim Hortons are using this accelerated program to bring in cheap labour.
The program is aimed at higher-skilled workers, but they don't have to prove they've advertised for Canadians to fill the jobs first, said Gil McGowan.
"They don't have to run over the same checks and balances and that's why we're concerned, because clearly this process is being abused by service sector employers. And it's important to note that the government wants to expand the accelerated program, which we think would be a disaster."
Cities taking more temporary foreign workers
While most think the program is meant to fill jobs in remote parts of resource-rich Western Canada, some of the largest increase in temporary foreign workers have been in cities.
Since 2008, permits for temporary foreign workers in Toronto increased by 60 per cent, in Montreal by 87 per cent and the Atlantic Provinces saw an 80 per cent increase, according to data from Citizenship and Immigration Canada.
The total number of temporary foreign workers has doubled in the last decade, to 338,189 workers.
"We now have about as many temporary workers in Canada as the entire workforce of New Brunswick," said Weir, an economist with the United Steel Workers Union.
"I think part of the problem is that a lot of companies are going through the motions of pretending to hire Canadians, in order to gain those Labour Market Opinions that they need to get temporary foreign workers."
Weir suggests the foreign worker program often allows employers to fill vacancies without providing training opportunities or raising wages to attract workers.
He points to recent studies showing Canadian companies underperform compared to businesses in other OECD countries, including the U.S., when it comes to training and development of its own workforce.
All Canadians could pay for the expansion of this category of worker, according to Weir: "Expanding labour supply, without an offsetting expansion of demand, increases unemployment and decreases wages."
Allowing cheaper wages
Another change to the program last year allows employers to pay workers 15 per cent less than Canadian workers. Carleton's Ian Lee says allowing lower wages could undermine Canadians' support for the program.
"The problem is it creates the perception that it's being used to undermine organized labour or undermine the market wage rate in that job classification. It's going to discourage public support when Canadians realize an employer can do that."
"Canadian workers are being displaced, training is being ignored and the TFW program is becoming the first choice rather than a tool of last resort," said the Alberta Federation of Labour's McGowan.
Kelly Leitch defends the program.
"When we don't have a Canadian available because there actually isn't anyone available, it's important that we have access to a good program, a sound temporary foreign worker program; that skilled labour can be brought into the country to make sure that firms can thrive."
She said the government is committed to reviewing the program, but had no details on when that review would be complete.
Perhaps the courts will get there first.
On Tuesday, HD Mining International was in a Vancouver courtroom, defending its decision to hire 201 workers from China for its coal mine in Tumbler Ridge, B.C.
Two B.C. unions launched the case against the company.
Brian Cochrane, of the International Union of Operating Engineers, hopes the case will result in changes.
"I think that this case is going to give us a chance to look under the hood of the whole temporary foreign worker program."
CBC News, Wednesday, Apr. 10, 2013
Byline: Cindy Pfeffer
Labour federations call for freeze on temporary foreign workers program
The B.C. Federation of Labour has joined its counterpart in Alberta in a call for an immediate freeze on the country's accelerated process for temporary foreign workers applications.
"The fast track program should stop immediately," said Jim Sinclair, president of the BCFL. "The whole program should have a moratorium placed on it and there should be a real public review."
Sinclair was reacting to the publication of a list of more than 4,000 employers for which the federal government approved applications to bring temporary workers into Canada via an accelerated process. The document was obtained by the Alberta Federation of Labour through an Access to Information request.
According to a Service Canada website, the program, called "Accelerated Labour Market Opinion," is a means for employers to hire "temporary foreign workers for high skilled occupations."
The list obtained by the AFL covers the initial eight months following the program's launch (April 25 to December 18, 2012). It includes hundreds of companies that are believed to have used the accelerated process to hire low-skilled labour. For example, convenience stores, gas stations, and a host of restaurants such as Tim Hortons, Taco Time, Subway, and A & W.
Sinclair argued that while the temporary foreign workers program was intended to only be used as a last resort, it's become the first choice for thousands of companies across the country.
"It is all about cheap labour and depressing the wages of Canadians," he said. "Stephen Harper and the Conservatives have little-to-no respect for people who work hard for a living."
Sinclair called attention to an April 2012 rules change by Canada's human resources minister, Diane Finley, which permits employers to pay temporary foreign workers 15 percent less than average wages.
"It's all about a government that sees its job as to make the rich richer and to make the middle class disappear," he added.
Sinclair stressed that the BCFL is not against immigration. "If it's necessary to bring people to Canada, they should come here as immigrants, with the same rights as everybody else," he said.
A representative for Human Resources and Skills Development Canada could not be reached by deadline. Kelly Leitch, parliamentary secretary for the minister of human resources, told CBC News that the government was looking into the matter. "We have some significant concerns about what's going on in the temporary foreign workers program," she said.
The 2013 federal budget states that the government is "taking action to reform Canada's temporary foreign workers program." The government plans to "Work with employers to ensure that temporary foreign workers are relied upon only when Canadians genuinely cannot fill those jobs," it reads.
It's estimated that there are 70,000 temporary foreign workers in British Columbia and over 300,000 across the country. Nationally, that's up from 101,000 in 2002.
Straight.com, Wednesday, Apr 10, 2013
Byline: Travis Lupick
Tories looking at review of foreign worker program
OTTAWA—The federal government is investigating the possible abuse of the temporary foreign workers hiring program by Canadian companies and is expected to overhaul it to put greater onus on businesses to seek out local employees before bringing in foreign workers.
Businesses that are turning to foreign workers to fill employee shortages are also expected to be required in future to do more to train Canadians for the skilled job vacancies now going to people from overseas, a senior government official said.
The review of the Temporary Foreign Worker Program has taken on new urgency as Prime Minister Stephen Harpers' government faces a firestorm of complaints that its policies are encouraging firms in Canada to replace Canadians with foreign workers and drive down wages.
"The Conservatives are enabling companies to exploit the program and avoid hiring Canadian workers," NDP deputy immigration critic Sadia Groguhé said Wednesday. "The point of the program is to complement Canadian workers, not substitute them."
Outrage over the government's foreign hiring plan blew up after it emerged that the Royal Bank of Canada was planning to shift the information technology work done by 45 Canadian employees to foreigners contracted by iGate, a U.S.-based outsourcing firm.
But the issue has been gathering steam since last year, when HD Mining International Ltd., a Chinese-backed coal mining operation in British Columbia, brought in 201 miners from China under the temporary workers program.
The federal government is investigating the applications leading up to the staffing changes at RBC and is also conducting a wider look at the Temporary Foreign Worker Program, which has doubled in the last decade to 338,000 workers.
In the March 21 federal budget, the government said it planned to reform the program to ensure foreign workers are brought in only when Canadians are "genuinely" not available. The new rules will require employers to make more extensive efforts — including more advertising — to hire Canadians before becoming eligible to bring in foreign workers.
The government also wants to work with employers who "legitimately" rely on foreign workers to ensure the companies have a plan to move to a Canadian workforce, the budget said.
As well, the reforms would require companies to pay user fees to apply for permission to bring in foreign workers. But officials haven't said when the new rules will be put in place.
The government is also concerned about another recent measure for bringing in foreign workers quickly. The Accelerated Labour Market Opinion (ALMO) is a way to fast-track applications for skilled workers needed on a temporary basis by Canadian companies.
The Alberta Federation of Labour focused attention on this aspect of Canada's temporary worker arrangements after it obtained a list of 4,800 companies — many in the services industry — that were approved to bring in temporary help under ALMO last year.
"You look down this list and it's McDonalds, Tim Hortons, A&W, Subway Sandwiches," said Alberta Federation of Labour president Gil McGowan. "Are we supposed to believe that these are 'high-skill' employment opportunities?"
The government is looking at how "skilled workers" are defined under this program, a senior official said. Currently, a manager or supervisor in a service business can qualify as a skilled worker under the program, the official noted.
The government is "committed to fixing the (temporary worker) program to ensure that Canadians have first crack at jobs in Canada," a spokesperson for Human Resources Minister Diane Finley said. "The program exists to address real and acute labour shortages in certain sectors and regions across the country on a temporary basis. It was never meant to replace Canadians with foreign workers."
The Harper government is also concerned about another federal program called an intra-company transfer, which allows multinational companies to temporarily shift employees to Canada without the need to convince Ottawa that no Canadian can do the job. This measure is also being examined to see if it is being abused by companies wanting to avoid the usual procedures for bringing in foreign employees, the official said.
Ottawa Star, Wednesday Apr 10 2013
Byline: Les Whittington
Will work for less: a primer on temporary foreign workers
Earlier this week, news broke that RBC plans to hire 45 temporary foreign workers through iGate, an IT contractor, to fill positions of employees who say that, in fact, they're training their own replacements.
RBC denies this, saying that no one will lose their jobs and that the Canadian employees will be moved to other departments.
In Alberta alone, 4,000 companies have been given approval to hire temporary foreign workers. Canada-wide, there are 338,000 temporary foreign workers.
Postmedia News walks you through the controversy:
WHAT IS A TEMPORARY FOREIGN WORKER?
Immigration Canada defines a temporary foreign worker as "workers (who) enter Canada to work temporarily in jobs that help Canadian employers address skill shortages."
Temporary foreign workers would, in principle, fill jobs such as carpenters, fruit pickers or managers in communication. These are areas that Human Resources and Skills Development Canada (HRSDC) says are suffering skills shortages.
WHAT DID RBC DO THAT CAUSED CONTROVERSY?
The reason for the temporary foreign worker program is so that companies can go outside of Canada when there is a clear absence of Canadians to fill the positions.
In this case, critics say they were being brought in to replace positions that were already filled. The fact that several jobs will themselves eventually move offshore – outsourcing – further clouds the issue.
It is unclear whether or not any rules were broken. HRSDC has launched an official probe into the hiring.
WHY WOULD A COMPANY PREFER FOREIGN WORKERS?
Briefly, it's about wages. "You can actually pay these temporary foreign workers 15-per-cent less, you don't have to pay for a lot of the other benefits, and the employer has a power balance that gets even more skewed because the workers are so much more vulnerable than residents," argues Jinny Sims, the federal NDP's immigration critic.
WHAT ARE THE ARGUMENTS FOR HAVING TEMPORARY FOREIGN WORKERS?
Under the true guidelines of the program, temporary foreign workers are seen as an aid to the economy.
"If, for instance, you run a cherry orchard, apparently it's very difficult to get Canadians to come and pick the cherries in the orchard," said Michael Hart, professor of international affairs at Carleton University in Ottawa. "You can hire temporary workers from Mexico to do that."
"The biggest reason to support it is if there are particular shortages, this is a quick and dirty way to address those needs," added Sharry Aiken, law professor at Queen's University in Kingston, Ont. "When there are very clear needs for the workers, there can be quite dramatic consequences if those jobs aren't filled."
William Watson, economics professor at McGill University in Montreal, said that "it's fair game for Canadian firms to play by the rules if that can cut their costs."
WHAT ARE THE ARGUMENTS AGAINST USING TEMPORARY FOREIGN WORKERS?
Some wonder if these workers are really necessary. Aren't they taking up jobs that Canadians can do?
"You can argue, if you are, say, a member of a labour union, that the guy who needs cherry-pickers from Mexico, if he paid a higher wage then Canadians would be willing to pick cherries," said Hart.
"Necessity is an interesting moral question. Economically, at the price that you have to pay in order to sell your cherries, you can't afford to pay $20 an hour."
"Particularly in cases where these are not temporary labour shortages – these are permanent labour shortages – why are we using a temporary foreign worker program to address what is in fact a permanent or chronic labour shortage?" said Aiken.
"It's more equitable if the workers are brought in with the view of becoming permanent residents."
WHAT WILL HAPPEN NEXT?
The Alberta Federation of Labour is starting an inquiry into how 4,000 companies in that province received permission to hire temporary foreign workers. That's in addition to the HRSDC probe.
Changes will probably come to the temporary foreign workers program, but it won't go away.
Vancouver Sun, Wednesday, Apr 10 2013
Byline: Karl Kofmel, Postmedia News