Academic journal article Canadian Ethnic Studies Journal

Conditions for an Efficient Canadian Temporary Foreign Worker Program: The Case of Quebec

Academic journal article Canadian Ethnic Studies Journal

Conditions for an Efficient Canadian Temporary Foreign Worker Program: The Case of Quebec

Article excerpt

INTRODUCTION

A country opens its economy to temporary foreign workers to satisfy deep shortages of labour in industries or occupations. When there is free access to the world labour supply, employers are likely to give priority to foreign workers in jobs, in part because they could pay lower wages to them than to resident workers. Thus, a temporary foreign worker program must impose constraints on domestic employers' actions in order to protect local workers' access to jobs. If there is imperfect information and constraints are not closely monitored, employers may have incentives to overuse the program and, as a consequence, there can be negative effects on resident workers as well as on temporary foreign workers. This paper describes the required economic context and the needed regulatory constraints so that employers do have incentives to give priority to resident workers for jobs in the short-term. In addition, balanced labour markets must be re-established in the medium term. It is analysed whether the province of Quebec, like Canada, experiences some negative effect from the program and whether the temporary foreign worker program is efficient enough to ensure economic growth.

In general, temporary foreign workers (TFWs) get a working contract for a fixed period, with a specific employer, and must return home at the end of a determined period. There are three stages in the process at which potential problems can arise: hiring, employment and end of the contract. During the hiring process, local workers must not be affected by the fact there is a TFW program; specifically, access to jobs must not be made more difficult or eliminated. During their employment period, the TFWs must be treated under the same conditions as local workers, and thus, must not be exploited. Finally, when there is no access to permanent residency, the TFWs must return home at the end of their job contract and not become illegal residents. This paper focuses on the first stage, i.e., hiring of TFWs with potential impacts on resident workers. The goal is to identify the characteristics of efficient economic hiring and to determine how TFW program requirements ensure that we avoid adverse effects domestically. It is worth noting that access to permanent residency does not modify the conditions. A statistical analysis shows that negative effects have been generated in the province of Quebec especially in relation to low-skilled young people. The main issue is the lack of general required features for the efficient implementation of a TFW program with the most important being very good occupational labour market information.

The remainder of this article is organised as follows: First is a description of what economically leads to the need of a TFW program with potential consequences, followed by another description focused on the main characteristics of the Canadian program and the additional features for the Province of Quebec. Next is a statistical illustration of the labour market situation in Quebec which leads to evaluating potential negative consequences. Finally, included is a section that describes missing features and offers suggestions to make the program efficient, followed by a brief conclusion.

WHY HAVE A TEMPORARY FOREIGN WORKER PROGRAM?

When there is a short supply for some workers, employers must increase wages to attract applicants either from other regions or from other occupations. However, if the unemployment rate across the country is very low, wages would have to rise drastically and there will still be no guarantee for employers to attract suitable workers. Hence, a TFW program goal is to ensure that firms can find suitable workers for their job vacancies at reasonable wages so that their production of goods or services is not slowed down or even interrupted. It is a purely demand-driven immigration.

The goals of labour market flexibility and production stability can be adopted for specific cases (Abella 2006). …

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