No Easy Fix for Skills Shortage

Changes to temporary foreign workers program a partial solution
May 1, 2013 Last Updated: May 2, 2013

PARLIAMENT HILL—Companies are hiring cheap foreigners while idealistic Canadians get history degrees only to work at Starbucks. It’s a narrative oft-repeated and difficult to unpack. 

Sometimes, contradictory studies about a lack of skilled workers confuse the situation. While there is a popular perception that Canada lacks trades people, which can be true in the west, most studies find there is more of a need for highly-trained technical workers—engineers, health care workers, IT experts, etc.

The government is looking at various ways to address the skills shortage—which the Canadian Chamber of Commerce describes as a crisis—but solutions bring their own problems and create critics as readily as supporters.

That was the case this week when the government made known its plans to reform the temporary foreign worker program. Employers that can’t find Canadians with the skills, or desire, to work in certain jobs can bring in foreigners to work temporarily in Canada. 

Changes to the program will introduce fees and extra requirements to stop businesses from abusing the program and encourage them to hire and train Canadian staff.

Immigration Minister Jason Kenney predicted the response he got: the changes were denounced by the Chamber of Commerce as a burden on business, while the NDP said they didn’t go far enough.

Jobs Canadians Don’t Want

The problem with some jobs, Kenney said, is cultural: Canadians simply don’t want to do them. 

“It is a huge problem, not just that we have a skills gap. The truth is there are a lot of young Canadians that are overqualified for the jobs that are available,” Kenney told The Epoch Times.

“Huge numbers of young Canadians have chosen to take academic degrees only to find that they can’t exactly get a job in gender studies or international relations very easily, when there are huge shortages in skilled trades,” he said.

“Somehow we have undervalued basic work culturally. We’ve sent all sorts of cues to young people that if they don’t go and get an academic degree and end up with an office job that they are somehow not realizing their potential. That’s ridiculous.”

The feds have few options to address the problem, said Kenney, given that education is a provincial matter. 

During a press conference just before, he told reporters that agriculture in Canada could face crippling shortages without foreign temporary workers. For that reason, it is exempt from the new requirements.

“There has been a change of expectations in our own domestic labour force and those are the kinds of jobs that, frankly, Canadians just won’t do anymore,” he said.

But getting foreigners to do those jobs introduces its own problems, not the least of which is the monkey wrench it throws into the self-correcting mechanism the market should create in the labour force. If there are jobs and unemployed people, it follows that those people would pursue skills to fill those jobs or businesses would pay more to fill them.

Bank of Canada Governor Mark Carney pointed to that issue in his testimony before Parliament’s finance committee last week.

Speaking before the changes were announced, Carney said the government was reviewing the program to make sure Canadian businesses worked to find domestic solutions to skills shortages.

He added it was important, especially in lower-wage jobs, to ensure that market wages adjusted and the economy became more productive.

“One doesn’t want an over-reliance certainly on temporary foreign workers for lower-skilled jobs, which prevents the wage adjustment mechanism from both making sure that Canadians are paid higher wages, but also that the firms improve their productivity as is necessary,” said Carney.

It’s a problem Canada is often faced with. Companies don’t invest in innovation and instead look for cheaper ways to do things. In comparison, U.S. companies are more likely to make capital investments in technology that can improve productivity. 

There is a huge difference between farm jobs and more highly-skilled positions, however. Canadians may not want to pick apples, but what about becoming optometrists and doctors?

The dangers of a skills shortage are perhaps most acute across the health care sector where staffing problems are about to be exacerbated by aging baby boomers.

Working Toward a Solution

Kenney is working to overhaul the immigration system to bring skilled workers in faster, but the changes could lower other forms of immigration—a hot-button issue among immigrant communities where bringing family members to Canada remains a high priority.

Another issue with that solution is making sure immigrants come with recognized credentials. That widespread problem now results in skilled immigrants like doctors working entry-level service jobs. 

Kenney has referred to the consequence as Canada having the most highly educated taxi drivers in the world. The government has been working on the problem for years, but solutions take interprovincial cooperation between governments and industry groups and can be prohibitively expensive. 

Complicating matters is the fact that the skills shortage is global to a large degree, according to international human resources firm Randstad. That means Canada is working to attract skill sets that other countries are also looking to bring in.

The current federal budget aims to address the skills shortage with a new job grant that will pay $15,000 or more per person to train staff. Businesses will apply for the fund and share costs with the feds and their respective province. 

The budget claims the grants could train up to 130,000 Canadians a year. Human Resources Minister Diane Finley says the program will get government out of the way so businesses can train their employees exactly how they want. 

Businesses like the plan, but the provinces don’t because the money will come out of already popular deals the feds have with the provinces to train workers. Some critics, including the Canadian Union of Public Employees, say businesses could use the funds to pay for already existing in-company training programs.

NDP human resources critic Chris Charlton says there is a threefold solution to the skills shortage: training, money, and mobility.

 “We need to invest in training in a very serious way for some of those job openings. Secondly, we need to pay a decent wage, that will make jobs attractive for Canadians. And thirdly, I would suggest we need to get serious about encouraging labour mobility.”

Her private members bill, C-201 would help address those problems, she said. Introduced in 2011 with no debate since, it would allow trades people and apprentices to claim travel and accommodation expenses on their income tax for work 80km from home.

The bill is aimed squarely at the building and construction trades rather than the larger issue of Canada’s need for a highly-trained, technical workforce.

In the meantime, job numbers remain shaky. A CIBC report last December blamed the skills shortage for contributing to stagnant employment numbers.