Exploiting the System: How Some Alberta Businesses Misuse the Temporary Foreign Worker Program and Hurt Albertans

The Temporary Foreign Worker (TFW) program in Canada is designed to help employers fill labor shortages when qualified Canadians are not available. However, concerns have been raised about the potential for abuse of this program, particularly in Alberta, where reliance on TFWs is high. This article investigates how some Alberta businesses may be taking unfair advantage of the TFW program and the impact this has on Albertan citizens seeking employment, especially in entry-level positions.

Understanding the TFW Program in Alberta

The TFW program in Alberta allows employers to hire foreign workers for various positions, with specific guidelines and regulations in place. In recent years, there has been a significant increase in the number of TFWs participating in Alberta's labor market, a trend largely related to the strong performance of Alberta's economy [53]. Until 2006, less than one percent of the province's total labor force was comprised of TFWs. However, with federal changes to the TFW program in 2007, the province saw a significant spike in the number of TFWs [53].

To participate in the program, employers must meet certain requirements, including:

• Offering a job for a higher-skilled position (NOC skill type 0, and skill levels A and B) [63]

• Providing full-time hours (minimum 30 hours per week) [63]

• Offering employment for at least one year in a non-seasonal position [63]

• Meeting provincial minimum wage requirements and those set out in the Labour Market Impact Assessment (LMIA) [70]

• Ensuring that work experience for applicants was full-time, for a minimum of 30 hours a week, and for the same occupation authorized by Immigration, Refugees and Citizenship Canada (IRCC) [75]

TFWs in Alberta have the same rights and responsibilities as any other employee, protected under Alberta's employment standards, workplace health and safety, and workers' compensation legislation [64]. They must also have access to healthcare services and a safe work environment [72].

It is important to understand the historical context of the TFW program. Initially, it existed alongside the Seasonal Agricultural Labourers Program, which began in 1966 and focused on recruiting seasonal agricultural laborers [53]. In 2002, the TFW program was expanded to allow employers in non-agricultural sectors to access foreign workers, particularly in areas where Canadian workers were allegedly unavailable [53]. This expansion led to increased participation of TFWs in sectors like construction, retail, restaurants, and gas stations [53].

Potential for Abuse of the TFW Program

Despite regulations, there is potential for the TFW program to be misused. Prime Minister Harper acknowledged this in 2014, stating that some businesses abuse the program 1. The House of Commons Standing Committee on Citizenship and Immigration also received reports of TFW mistreatment and abuse [38]. A CBC investigation questioned whether the program was broken, both for the labor market and the rights of the workers it brings to Canada 2.

One way businesses might misuse the program is by hiring TFWs for positions that could be filled by Albertans 3. This can occur when employers offer wages below the prevailing market rate, making it less attractive for Albertan citizens to apply 4. By hiring TFWs at lower wages, employers may gain an unfair advantage over competitors who adhere to fair wage practices 3. This practice can be particularly harmful to smaller businesses that lack the resources to navigate the TFW program, putting them at a disadvantage compared to larger companies that can more easily access foreign workers 3.

Impact on Albertan Workers

The influx of TFWs can have a significant impact on the wages and employment opportunities of Albertan citizens, particularly in entry-level positions 3. Some argue that the program drives down wages and creates unfair competition for entry-level jobs 3. This is especially concerning given that Alberta has the lowest general minimum wage in the country 6.

Furthermore, the TFW program may discourage employers from investing in training and development for Albertan workers 7. If employers can readily access a pool of foreign workers willing to work for lower wages, they may have less incentive to provide training and advancement opportunities to local workers.

The impact of the TFW program extends beyond just wages and employment. Public perception of the program is mixed, with less certainty about its positive or negative effects on the Canadian economy and the prices of goods [69]. However, a majority of Canadians believe the program has a negative impact on the labor market for Canadian workers (54%) and housing (75%) [69]. These concerns highlight the broader societal implications of the TFW program and the need for careful consideration of its effects on various aspects of Canadian life.

Demographics of TFWs in Alberta

In 2024, Alberta had the third-highest number of approved LMIAs in Canada, with 5,793 8. This suggests a significant reliance on TFWs in the province. The majority of Non-Permanent Residents (NPRs) in Alberta are TFWs, with a smaller but growing number of foreign students [73].

It is important to note that the COVID-19 pandemic significantly impacted immigration patterns, including TFWs. In 2020-2021, Alberta experienced a notable slowdown in immigration, with the lowest number of immigrants in 13 years [71]. This slowdown was likely due to travel restrictions and other pandemic-related factors.

Wages and Working Conditions of TFWs

While TFWs in Alberta have the same legal protections as Canadian citizens regarding wages and working conditions [76], there are concerns that these protections are not always upheld in practice. Employers are legally obligated to pay TFWs for all work, including overtime, ensure a safe workplace, and provide proper break time and days off [65]. They are also required to offer the same benefits as other workers and cannot take their identification documents [66].

However, evidence suggests that some employers may not be adhering to these regulations. The AFL found that 243 employers in Alberta were accessing the TFW program rather than paying employees more than the minimum wage 6. This raises concerns about potential exploitation and wage suppression of TFWs, particularly given that Alberta's minimum wage is already the lowest in the country 6. Even with the recent minimum wage increase, the TFW program may be used to keep wages below a living wage, further exacerbating the challenges faced by these workers 6.

Businesses Fined for Exploiting the TFW Program

For a complete list of businesses that have been fined for violating the TFW program, please refer to the Government of Canada's website: https://www.canada.ca/en/immigration-refugees-citizenship/services/work-canada/employers-non-compliant.html

Some notable examples of large businesses or those receiving large fines include:

• Canadian Brewhouse: This Edmonton-based restaurant chain was fined a total of $47,000 for violations at eight of its locations9.

• Luigi's Concrete: This Sherwood Park company was fined $153,000 and banned from hiring TFWs for five years9.

• A commercial cleaning company in Edmonton: This company was fined $152,000 and banned from hiring TFWs for two years10.

• An employer in the transport sector: This employer was fined $258,000 and banned from hiring TFWs for five years.

• An employer in the construction industry: This employer was fined $53,000 and banned from hiring TFWs for five years.

It is important to note that this list may not be exhaustive, as data on all businesses fined for TFW program violations may not be publicly available.

Government and Organizational Efforts to Address Issues

Both the federal and provincial governments have taken steps to address issues related to the TFW program. The federal government has implemented measures to strengthen compliance and enforcement, including:

• Restrictions on low-wage stream LMIAs in areas with high unemployment [44]

• Caps on the proportion of TFWs in a company's workforce [44]

• Increased median wage for high-wage LMIA applications [41]

Alberta has established a Temporary Foreign Worker Advisory Office to help TFWs and employers understand their rights and responsibilities [33, 39]. This office also assists in resolving situations involving unfair or unsafe working conditions and provides support to vulnerable workers [39]. In addition to the advisory office, Alberta offers a dedicated TFW helpline, a unique service among Canadian provinces [56]. These initiatives demonstrate Alberta's commitment to addressing the specific challenges faced by TFWs in the province.

Addressing Long-Term Labor Shortages

While the TFW program can provide a temporary solution to labor shortages, it is crucial to recognize that it is not a sustainable long-term strategy [40]. Relying solely on the TFW program to fill labor gaps can have negative consequences for Alberta's economy in the long run.

Instead, a more comprehensive approach is needed to address the root causes of labor shortages and ensure a sustainable workforce for the future. This approach should include investing in skills development and training for Albertans, attracting and retaining skilled workers from within Canada, and creating pathways for TFWs to transition to permanent residency.

Conclusion

The TFW program in Alberta presents a complex issue with both benefits and drawbacks. While it can help address immediate labor needs, the potential for misuse and exploitation raises concerns about its impact on Albertan workers and the overall economy.

The findings of this investigation highlight the need for continued vigilance and proactive measures to ensure the program's fairness and effectiveness. Strengthening compliance and enforcement mechanisms, increasing transparency, and promoting ethical recruitment practices are crucial steps in mitigating the risks associated with the TFW program.

Furthermore, it is essential to shift the focus from short-term solutions to long-term strategies that prioritize the development of a skilled and sustainable workforce within Alberta. Investing in education, training, and apprenticeship programs, along with creating attractive career pathways for Albertans, will be critical in reducing reliance on the TFW program and building a more resilient and equitable labor market.

Policymakers, employers, and labor organizations must work collaboratively to address the challenges posed by the TFW program and ensure that it serves the best interests of both Albertan workers and the province's economic future. Failing to do so could have significant long-term consequences for Alberta's social fabric and economic prosperity.

Works cited

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8. Migrant workers: precarious and unsupported - Provincial Report: Alberta - Canadian Council for Refugees, accessed January 4, 2025, https://ccrweb.ca/sites/ccrweb.ca/files/migrant_workers-ab_1.pdf

9. A UN report slammed the predatory practices of Canada's TFW program. Some of the worst abuses of this "breeding ground" for modern slavery are here in Alberta, accessed January 4, 2025, https://www.theprogressreport.ca/a_recent_report_from_the_un_slammed_the_predatory_practices_of_canada_s_tfw_program_some_of_the_worst_abuses_are_here_in_alberta

10. Government of Canada continues to take action to protect Temporary Foreign Workers, non-compliant employer penalties increased by 36%, accessed January 4, 2025, https://www.canada.ca/en/employment-social-development/news/2024/06/government-of-canada-continues-to-take-action-to-protect-temporary-foreign-workers-non-compliant-employer-penalties-increased-by-36.html