New controversy emerged yesterday surrounding the Canadian government's Temporary Foreign Worker Program, as an analysis of documents released under access to information legislation, and first reported by The Tyee yesterday, suggests the government is using out-of-date and often inaccurate data to set wages. This in turn could be driving down pay rates for Canadian workers.
The TFW program is intended to allow employers to bring in foreign workers for a short period of time to address gaps in the labour market. Under the terms of the program, these workers can only be hired after an employer has made an effort to fill the position locally at the prevailing wage, and they must be paid that same prevailing wage.
But documents released to the Alberta Federation of Labour and provided to The Tyee and Ricochet show that the wage set by the government is often not reflective of actual labour market conditions.
“Wages are based on market pressures, so when there's a shortage of certain types of skills the wages should go up,” said Siobhan Vipond, the acting president of the Alberta Federation of Labour, in an interview with Ricochet. “In this [TFW] system you're basing the job wage on really old data, so it's totally out of line with the market of that day.”
Bad data invites abuses
There are three distinct issues with the data being used to determine the prevailing wage for the TFW program.
One is that many of the prevailing wages are listed with no source, meaning we have no idea where the data comes from.
Others list various sources, including census data and EI records, but much data comes from the mid-2000s and even as far back as 2000. It’s hard to imagine that 14-year-old data accurately represents current conditions in the labour market.
Finally, some wages seemingly drawn from recent sources are significantly lower than the prevailing wage figures released by the provinces.
For example, the Alberta government provides prevailing wage data based on the 2013 Alberta Wage and Salary Survey. According to that data the prevailing wage for a machinist in the province is $30.62, but the prevailing wages used for the TFW program in Alberta range from a low of $17.66 to a high of $28.65. Consequently, foreign workers in some regions of Alberta could be earning little more than half the wage paid to their local counterparts, despite assurances that they will be paid the prevailing wage.
The documents for the TFW program show that around half of the regional prevailing wages in Alberta for machinists list no source, while others list the 2010-2011 Labour Force Survey and others cite the Alberta Wage and Salary Survey from 2005.
A similar story unfolds when looking at data from other regions of the country. The TFW program’s prevailing wage for tool and die makers in Northwest Ontario is based on 2001 census data, as is the wage for the same employees in Outaouais, Quebec. The wage for industrial electricians in Nipissing and Algoma, Ontario is based on 2004 data, while Hamilton, Ontario’s wage is drawn from 2000. No source is provided for these entries.
Similarly, under the TFW program, power systems engineers in New Brunswick are paid a prevailing wage drawn from the 2006 census and carpenters in Windsor-Sarnia earn over $10/hour less than the federal government's own 2011 rate for government-employed carpenters in that region.
Time to scrap the TFW program?
These aren't small discrepancies, and the impact of the difference over the course of a year amounts to thousands of dollars of savings for the employer — and corresponding losses for the foreign employee.
"In some cases the data was egregiously outdated, while in others there was no indication of where the data came from," said Vipond. "So where does the prevailing wage come from? Did they just take it out of thin air? There needs to be a greater level of accountability."
According to Vipond the issue isn't just about justice for foreign workers, because the TFW program places downward pressure on wages in sectors that use the program. Vipond says the Alberta Federation of Labour has seen wages stagnate in sectors heavily influenced by TFWs.
"It's just a bad policy based on poor data. The TFW program is so flawed that we believe it should be scrapped and replaced with immigration and not exploitation. If we need people to come to build this country then we should give them the rights that come with that, and instead these programs are being used by businesses to drive down wages and conditions of work."
Temporary Foreign Workers in Canada
In recent years the TFW program has gained a certain amount of notoriety following scandals involving Canadian companies, including the Royal Bank and McDonald's, which were found to have misused the program to replace regular employees with cheaper foreign workers.
The government promised changes and last summer brought in a series of modifications to the program, which they argued would ensure that TFWs remain a last resort for employers.
In July, Employment Minister Pierre Poilievre promised that "stiff new consequences will encourage compliance and help prevent employers from misusing the programs or mistreating workers by ensuring that employers who violate program conditions face appropriate consequences."
But even as the government was scrambling to quell public anger over abuses of the program, its wage estimates may have been helping employers skirt the rules and misuse the program.