Good morning, everyone. It is Tuesday, October 31, 2017. We are the Standing Committee on Public Accounts. We welcome you here this morning.
Pursuant to Standing Order 108(3)(g), we are studying report 5, “Temporary Foreign Worker Program”, of the spring 2017 reports of the Auditor General of Canada, part of the report that was referred to the committee on Tuesday, May 16.
This morning we have witnesses from the Office of the Auditor General: Mr. Michael Ferguson, Auditor General of Canada, and Mr. Glenn Wheeler, principal. We also have from the Department of Employment and Social Development, Ms. Louise Levonian, deputy minister, and Ms. Leslie MacLean, senior associate deputy minister and chief operating officer for Service Canada. As well, we have Mr. Paul Thompson, senior assistant deputy minister, skills and employment branch.
Thank you all for being here.
Typical of this committee, we will hear your opening comments and then we will move into questions from the members of the committee.
Welcome, Mr. Ferguson. The time is now yours.
Mr. Chair, thank you for this opportunity to present the results of our audit of the temporary foreign worker program, which is managed by Employment and Social Development Canada.
The temporary foreign worker program is meant to help employers fill job vacancies when qualified Canadians are not available. Employment and Social Development Canada is supposed to make sure that employers use the program to respond only to real labour shortages.
Our audit focused on whether the department managed the program to allow employers to hire foreign workers on a temporary basis to fill labour shortages only when qualified Canadians were not available. The audit also focused on whether the department ensured that employers complied with program requirements. In addition, we assessed how well the department implemented the reforms that the federal government announced in June 2014.
Overall, the reforms introduced in 2014 contributed to a reduction in the number of temporary foreign workers. However, the department's implementation of these reforms did not ensure that employers hired temporary foreign workers only as a last resort.
For example, in many cases, the department just took the word of employers that they couldn't find Canadian staff. The department also didn't consider sufficient labour market information to determine whether Canadians could fill jobs. We found cases in certain sectors, primarily caregivers and processing plants for fish and seafood, in which the department should have better questioned whether temporary foreign workers were filling real labour shortages. In particular, there were indications that unemployed Canadians who last worked in a fish and seafood processing plant may have been available for work.
In addition, the department committed to requiring employers to demonstrate that they had tried to fill low-wage positions by recruiting from under-represented groups. In the files we reviewed to which this commitment applied, 65% of employers didn't make adequate efforts to appeal to under-represented groups before requesting temporary foreign workers. Nevertheless, the department approved most of these applications. For example, program officers approved applications for temporary foreign workers in some fish and seafood processing plants located near first nations communities even when efforts to recruit from these communities were not found on file.
We also found that the department had increased its enforcement activities since announcing program reforms. However, it did not use the information it had to focus its activities on employers of the most vulnerable workers or on employers that were most at risk of not complying with the program.
As well, most enforcement activities consisted of reviewing documents that employers were asked to provide to investigators by mail. The department conducted few on-site inspections and face-to-face interviews with employers or temporary foreign workers.
Finally, we found the department didn't measure the results or impact of the program and didn't know what impact the program had on the labour market. Appropriate analysis of results and impacts could have helped the department understand the underlying reasons why, for example, Canadians didn't appear willing to take some of the jobs that temporary foreign workers eventually filled.
We're pleased to report that the department has agreed with our recommendations and has prepared an action plan to address them.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
Thank you, Mr. Chair, and all the members of the Standing Committee on Public Accounts for giving me the opportunity to share with you the progress we are making to fully address the recommendations made in the Auditor General's report on the temporary foreign worker program.
I want to start by saying that this program plays an important role in supporting a strong Canadian economy by helping employers fill labour market gaps while ensuring that Canadians have first access to available jobs. This is a critically important balance to strive for, but in practice it can be quite difficult to achieve. There are national, regional, and industry-specific considerations, and along with these considerations, the program must also ensure the protection of the rights of foreign workers. All this is not an easy task, and we are continually working to improve on achieving the right balance.
Over the years, the program has evolved significantly to adapt to the realities of today's labour market. This includes placing a greater emphasis on ensuring that Canadians and permanent residents have first access to jobs. For instance, following program changes in recent years, we have seen a 75% decline in approved positions for low-skilled workers. This was between 2013 and 2016. Employers of high-wage workers are now required to develop plans for transitioning to a domestic workforce. These changes have been part of the evolution of the program, and we're committed to continuing to find new ways to improve it.
Mr. Chair, I want to assure you that the issues raised in the Auditor General's report are of the utmost importance to us. We have accepted all of the recommendations made in the report, and the department has already taken action on a number of fronts.
Let me begin by articulating some of the actions that have already been taken. On hiring Canadians first, we remain focused on ensuring Canadians are first in line for any available jobs. Employers must provide proof that they have been recruiting and continue to actively recruit Canadians. Employers must list every Canadian or permanent resident who has applied for the job and justify why they were not hired.
In response to the Auditor General's recommendations to strengthen the assessment of employers' recruitment efforts, new rules came into force on August 28 of this year. Employers in the low-wage stream must increase their recruitment efforts aimed at indigenous people, vulnerable youth, persons with disabilities, and newcomers. These are the four groups who are most under-represented in the labour force.
We are increasing our use of available technology by requiring employers to use the job bank and its job matching service as one of their three advertising requirements. There are nearly 40,000 domestic jobseekers using this service nationwide, and it is a valuable tool in connecting them with employers.
Later this fall, the department is launching automatic enrolment of EI clients in the job bank's job alerts service to connect even more Canadians with jobs. We are also working to increase the recruitment of Canadians in industries that are heavy users of the program to bolster domestic recruitment.
Our efforts are most advanced with the fish and seafood processing sector where we are finalizing a collaborative action plan.
This plan will identify resources and concrete actions for attracting, developing and retaining a domestic workforce.
On our assessment of employer applications, I am pleased to report that we have launched a new quality assurance pilot program to monitor the assessment of employer applications.
We will be launching the new quality assurance process across Canada in December.
On the use of labour market information, labour market information is an important tool for the program. For example, we use current regional unemployment rates to focus on processing applications for certain low-wage occupations.
In April of this year, the department increased its access to information on employer layoffs. Officers now have information from the last 12 months rather than 90 days, which was the case earlier, to check that employers are not laying off domestic workers and replacing them with foreign workers.
The department is also working to incorporate new sources of data into its assessment for applications. This includes making better use of data from Statistics Canada's job vacancy and wage survey. We're also incorporating private sector forecasts on sectors and regional labour market conditions into our assessment.
On wages, the Auditor General also flagged concerns in his report that the program may be negatively impacting Canadian wages. The program requires employers to advertise jobs at the median wage or higher for that occupation. Employers must therefore pay temporary foreign workers the same amount that Canadians would expect to be paid for the same job. Therefore, the program should not be putting downward pressure on Canadian wages, but we will continue to monitor this, as it is an important question.
On compliance and enforcement, the program has continued to strengthen its regime to help protect its workers from abuse and exploitation. Since April 1 of this year, we have undertaken a number of initiatives to improve the compliance regime. To better target our resources and efforts, we've launched a new risk-based predictive model to help identify who to inspect, prioritizing the highest-risk cases. More than 1,300 inspections that were launched this year have been identified using this model.
The department has also significantly increased its on-site inspections, strategically focusing on employers of the most vulnerable workers. So far this year more than 900 on-site inspections are either under way or have been completed. This is approximately five times more than last year. The investments we're making in on-site inspections are actually paying off. Of those completed this year, approximately 50% of employers needed to take some sort of corrective measure to be compliant. This is a 15% increase, more than were identified last year using primarily paper-based reviews, demonstrating that on-site inspections are an effective tool in identifying and correcting non-compliant behaviour.
Recognizing the important role that unannounced on-site visits could play in protecting foreign workers, we have accelerated our efforts and expect to complete work on this in the fall.
ESDC understands the importance of partnerships as well and is working with the provinces and territories to improve enforcement through information sharing. We have updated agreements with Ontario and Alberta that are already in place, and we are revising existing agreements with British Columbia, Saskatchewan, and Manitoba.
We have also held consultations with provinces and territories on enhancing worker protections to better prevent abuse and exploitation of workers.
Another issue I want to talk about a little is performance measurement and results. The Auditor General raised concerns about the department's lack of evidence of the program's impact on the labour market. This is a complex question requiring intricate analysis, complicated by the significant changes made by the program in recent years. ESDC will undertake an evaluation in 2018 to examine the medium- and long-term labour market impacts of the program.
In the meantime, we have completed our program information profile that enables the collection of performance indicators, including information on program trends. Notably, the performance measurement strategy for the new global talent stream will generate information on job creation and investment in skills and training by companies using the stream.
Mr. Chair, our department is working on many fronts to continue improving the temporary foreign worker program.
We have already made significant progress in addressing the recommendations made by the Auditor General.
I have asked my chief audit executive to undertake a follow-up audit in two years' time to confirm our progress.
I am confident that we will fully address all of the recommendations in the report within the timeframes detailed in the management action plan.
Thank you for inviting us today. Your suggestions and comments are welcome.
I will now be happy to answer any of your questions.
Thank you, everyone, for being here this morning.
The program is certainly very important in my area, Sudbury, northern Ontario. This program is a job creator in the sense that if we didn't have these temporary foreign workers in northern Ontario.... It's very hard to recruit people from southern Ontario or the rest of Canada to come to northern Ontario. There are many challenges, so this is a very important program.
I was very interested in reading the report. I know the time frame that we're looking at is from 2013 to 2016. Certainly the angle was more about how we're looking at this, how we can reduce the abuse from employers and ensure they're doing their thorough due diligence to properly advertise and try to recruit across Canada. At the same time, in my reality, in my office, it's more on the other side, saying, “How can we help employers find temporary foreign workers because they can't fill the jobs?” It was very interesting to see the difference in my reality and the approach from the Auditor General's report.
That being said, I was certainly very interested in your comments, Ms. Levonian, with respect to under-represented groups. That has come up in the Auditor General's report. In the majority of the samples taken by the Auditor General's team, they “did not make adequate efforts to appeal to under-represented groups”, so the employers did not do a proper job between 2013 and 2016.
You've come to this committee this morning and told us that you are taking steps to require employers to do more to recruit in these under-represented groups, so I'd like to hear more about your plan to address this situation.
Thank you, Chair, and thank you all for your attendance today.
I have to say it's not a very impressive audit. It's not as if we found detail problems and we need to work at that. The whole overall program does not seem to have been given the kind of thought that normally programs of this importance have been given.
By way of some opening thoughts, in the Auditor General's opening remarks, where he talked about the reforms in 2014, the Auditor General said, “However, the department's implementation of these reforms did not ensure that employers hired temporary foreign workers only as a last resort.” Yet, it seems to me, that's the whole raison d'être of the program, so I have real problems as to how seriously this was structured and managed and carried out. I have particular concern about the management culture that would allow what we find in this audit to take place. This is very disturbing.
For instance, on page 18 of the Auditor General's report, under paragraph 5.93, regarding performance measurement strategy, it says, “We found that the Department did not have a performance measurement strategy for the program, so it could not measure or adequately report on the results of the program.”
Look, I don't have a lot of personal education, but I've been doing this business a long time and one of the key things I've learned is that you have to be able to measure your performance. That's a basic fundamental starting point. How, deputy, could you get it so wrong from the get-go, that you didn't even have in place the ability to measure how well your performance was? How could that be?
Even though you maintain you had one, it wasn't good enough. Let's move along.
I have a bit of a problem reconciling the report and what the deputy has said here today vis-à-vis the risk and benefit and the department answered.... Sorry, I'll back up. The Auditor General criticized the fact that there were certainly insufficient on-site inspections and any that were happening were not surprise visits. They were told ahead of time that you were coming.
In the department's response to the Auditor General, on page 17 it says, “The Department has also increased the number of on-site inspections that it conducts at employers’ premises to enhance the protection of vulnerable temporary foreign workers. Finally, the Department will undertake an assessment of the risks and benefits by April 2018 of conducting unannounced on-site inspections.” Yet today in your remarks, deputy, you said, “Recognizing the important role that unannounced on-site visits could play in protecting foreign workers, we have accelerated our efforts and expect to complete the work on this in the fall.”
How could we be so far away that in your written response to the Auditor General it is going to take until next April for you to decide whether or not, based on a risk and benefit assessment, on-site inspections would be a good idea, and then roll in and say, “Recognizing the important role...”.
There's a disconnect there. Help me.
I would like to thank the witnesses for being here today and for taking part in the committee's work. We welcome your participation.
I know that your respective teams worked very hard to prepare for your appearance in order to be able to answer our questions.
I echo Mr. Lefebvre's comments about the importance of the temporary foreign workers program for regions such as the ones I represent in Eastern Quebec, the Gaspé in particular.
I do not want to engage in politics here and will remain objective in my comments.
Canada's economy has improved significantly. Close to 430,000 jobs were created this past month, reducing unemployment considerably in certain parts of Quebec. The unemployment rate in Quebec City is about 4%. The unemployment rate in my home region of the Gaspé also fell. This is good news for the labour market for Canadians, but it also has negative effects on employers.
Throughout the summer, I travelled around my riding and met with a number of employers. They said there is a labour shortage in the region. I am thinking of restaurant owners who had to close their restaurants at noon, something that had not happened in 52 years in some cases. They told me about the difficulty recruiting qualified workers and said they would like to be able to use the temporary foreign workers program.
The data gathered since 2009 shows that the number of temporary foreign workers approved by your department fell by 32% from 2009 to 2015. These two things might be correlated.
Did the number of foreign workers continue to fall in 2016?
Ladies and gentlemen, welcome to your House of Commons. I must admit that the topic we are discussing bothers me and concerns me a great deal as a Canadian.
The unemployment rate is indeed low. Consider my region, Quebec City in particular—Mr. Massé talked about it earlier—the problem is related more to labour than employment. As a Canadian, I am not proud to see people in our country looking for work while people are being brought in from outside to take jobs, as humble, modest, and in particular as difficult as they are.
Canadians should be able to work as much as possible and contribute to the country's growth and prosperity. I see cohorts of people arriving from other countries and I welcome them with open arms, but that reminds me that there are people in Canada who are out of work. This concerns me.
My colleague from Calgary, Ms. Rempel, talked about your analysis of seafood companies in the Atlantic region. It is our understanding that people were available to work, but they did not get any work. Furthermore, in some cases people left their jobs and were replaced by foreign workers.
This is always a tricky expression to use. As the son of an immigrant myself, I do not like talking about foreigners. I would rather say future Canadians or people who want to be here.
That is probably the most worrisome example. In a city, a region, a village, people were available to work, they were doing a job, but they no longer are, and people are coming from other countries to do that job.
How can that be considered normal?
Thank you very much, Mr. Chair.
Welcome to the new witnesses who have joined us for the meeting.
I'm looking at this audit, and I'm focusing on the purpose. The purpose is to determine whether or not the temporary foreign worker program was properly managed. To me, that is the key question here. It's a program that is intended, as we all know, to allow Canadian employers to hire temporary foreign workers for labour shortages, and I would gather that this would be used as a last resort for these employers.
It's very clear that the Auditor General is saying in his report that management of this program “was not complete”. I look on this page, and I have certain things that are jumping out at me that are clearly very troubling.
On page 19, paragraph 5.97, it says, “the Department did not conduct analyses of the labour market to determine whether there was a real labour shortage of caregivers.” To me, that's a fundamental question. The whole point of the program is to fill labour shortages.
As a country, we are bringing in temporary foreign workers for providing care, and we don't know? How can we not know? How can we not know and analyze the information we have? Clearly the federal government has a lot of data. How are we not asking ourselves that simple fundamental question as to whether there's a “real labour shortage”?
Can I have a response from the department?
As with all occupations, we carefully monitor trends in the use of the program by all the different streams and all the different occupations, including caregivers.
As was noted earlier by one of your colleagues, we've seen a fairly significant reduction in the number of caregivers coming in through the program, so there's been diminished use of that provision. We're heavily reliant on recruitment efforts to demonstrate the shortage and that the employer went to the requisite efforts to find a Canadian. If they weren't able to, that is often the trigger. However, we supplement that with the use of labour market information.
That supplementing with labour market information is an ongoing challenge, and we'll be trying to do more and more of that in the future. That was one of the weaknesses pointed out by the Auditor General that we're working on further improving.
On overall impact on the labour market, that's a pretty complex question that's best suited for an evaluation. As our deputy noted, we have an evaluation planned that will do the economic analysis of the resulting impact of the program on the labour market. That can't be done on a month-by-month basis.
She's lucky we won't measure her disappointment. It's human nature; I'd be glad to get out of here.
I want to turn to paragraph 5.37 on page 7. To me this underscores a lot of the concerns. By the way, I know I don't have a lot of time, but I appreciated Mr. Lefebvre opening up with the concerns in his area, pointing out to the other side, and to my own colleagues—given some of the areas they represent, it's the same thing—that it is a complex issue. The broader concern I think is very much captured in paragraph 5.37. It's very brief. It says:
||In addition, some employers of fish and seafood processing plants—
where we've had particular problems
||—told the Department that temporary foreign workers were required because some Canadians had quit their positions because of the conditions or difficulty of the work. In our [the Auditor General's] opinion, this type of situation appeared to be a retention problem not a labour shortage problem.
This means that the working conditions are so poor and the pay is so poor that you can't keep workers. That's very different from, “I have a select need for a certain niche talent and I don't have it here.”
Also, going back to paragraph 5.18 on page 4, again the Auditor General says—and this is the link, and then I'll come to our guests—“This finding matters because the number of temporary foreign workers kept increasing over the years, as some employers were building their business models on the program.”
We can see a connection between the two.
My question would be to Mr. Thompson. Talk to us about how you view this issue of whether or not it's a retention problem or a labour shortage. Do you agree with the Auditor General that for some of those conditions where your department has said, “Yes, we recognize you have a need”, it's actually a retention problem and therefore a misuse of the program?
Thank you very much, Mr. Chair.
Before I begin my questions, I would like to clarify something. I believe the deputy minister said earlier that on-site inspections will not begin until they determine how to do them. Now I hear that on-site inspections are being done and that 50% of them identify non-compliance. Something does not add up. I do not want an answer now because I would like to talk about something else, but I would like someone to check that.
I worked in the immigration sector for a very long time. I would like to talk about the elephant in the room, that is, that some Canadians do not want to do certain jobs, which is certainly their right. The program was established in 1966 specifically to deal with that problem. At the time, employers and farm owners were facing a major skills shortage. In the end, the solution was to create the temporary foreign workers program.
If we examine the program without considering this problem, that is very unfair to the people who were hired and to employers who have a lot of trouble finding people to do those jobs.
There have been many changes over the years. In the past 15 or 20 years, a major factor has emerged, that of family caregivers. We have increased their number greatly by recruiting people from all over the world. I am very concerned that, in 2009, there were about 20,000 applications to hire family caregivers, as compared to just 3,000 or 4,000 today, as my colleague Mr. Arya said.
Can you explain such a huge drop even though the demand for those workers has not decreased? We all know very well that the demand has not decreased in our ridings and in our communities. Families are still struggling to find family caregivers.
Why has this program been cut so much? How are we going to find people to do those jobs? I am certain—and I see this—that no Canadians want those jobs.
Thank you very much, Mr. Chair. I congratulate you on your French.
Ms. Boisjoly, Ms. Hébert, welcome to your House of Commons.
Let's get back to square one.
Every government would like to see every Canadian working, a job for every Canadian, every Canadian working hard, proud to wake up every morning, enjoying Friday evening with family and being proud of having worked hard. That's the target. If we can't, there is time to open the door to foreign temporary workers.
I welcome the fact that Madam Mendès raised the issue a few minutes ago of the elephant in the room. Madam Mendès is absolutely right. That's the sad reality of Canada, and it's why I said in my earlier statement that I'm not very proud of that.
What do we do to address that? I think the best way is not to feed the famous elephant, but to instead be sure that every Canadian can have a job and work.
I am going to go back to recommendation 5.41, which specifies that this program is meant to be a last resort for employers. This is what the recommendation says:
|[...] the accuracy of employers' statements and that employers use the program only as a last resort.
However, that is not exactly followed to the letter. I would like you to tell me what measures have been put in place to ensure that, when employers call on foreign workers, this is done, beyond the shadow of a doubt, as a last resort. As was mentioned earlier, last March the program was broadened to allow for the hiring of more foreign workers, although in those regions, such as the Maritimes, many Canadians are unemployed.
Thank you very much, Mr. Chair.
First of all, I'm sorry, because I don't think we mentioned this before, but thank you to all of you for being here. It's good that we are able to dig a little more into this subject.
One of the problems we are facing with the program right now is that for many years now, we've stopped offering a path to permanent residency through the foreign workers program. A foreign worker who comes here to fill a temporary work shortage in whatever industry and for whatever reason may not necessarily have any intention of living here permanently, but yes, they do come. I think in agriculture more than any other sector, that's what we find. They come here for the summer, for the period when they are needed, but they do want to go back to their own home countries once the season is over. In other circumstances, they probably come to Canada to fulfill the contract they were hired to do, but they also have every reason to believe they could make a life for themselves here and contribute to Canada, the way so many of us have done in the past. I think that's another issue with this program, that we are not providing a path to permanent residency or citizenship.
To Mr. Wheeler or Mr. Ferguson, I know this doesn't touch your department or have to do with your department. It would be much more with the IRCC. But perhaps you could tell us whether, in all the contacts you had with the department, this was an issue with the employers and with the employees through the analysis you did of the program.
We didn't specifically look at that, and we say in the audit that we didn't deal with the IRCC side of this. One of the things the temporary foreign worker program has to deal with is that a number of issues that arise in other areas seem to coalesce in the temporary foreign worker program. What I mean by that is things like the situation with employment insurance, fish plants saying that workers ask to be laid off, and that whole retention problem.
When that happens, there's something not happening in the EI program to make sure that jobs are available. Why are those people still not working? There's something going on in the EI program and when the EI program doesn't deal with that issue, the issue lands in the temporary foreign worker program.
I think you can say the same thing for the under-represented groups. If those under-represented groups are not being well prepared to join the labour force, then that lands with the temporary foreign worker program again.
I think there's the whole question about whether the temporary foreign worker program is being used for family reunification. Again, and that's probably closer to your question, if people are trying to get family members into the country and if this is a way they do it, then again it's a problem that lands in the temporary foreign worker program.
I think there are a number of those types of peripheral problems, significant problems that are happening in other programs, and a lot of them tend to coalesce in the temporary foreign worker program. It needs to figure out how to deal with it.
Thank you so much, Mr. Chair.
It's always a pleasure to talk to you.
Since this is our last opportunity, I want to emphasize that the most important question raised today is that every effort needs to be made to ensure that hiring foreign workers is really something employers do as a last resort. In this regard the Auditor General's report is quite scathing. This is what it says:
|In cases where, in our opinion, the information provided by employers warranted further questioning, we found that program officers did not sufficiently question employers in 40 % of the cases.
The same report also says this:
|We examined almost 500 records of employment issued by these plants over a three-year period and found that just over 80 % of the Canadians they laid off had claimed EI at the same time as the plants were employing temporary foreign workers.
The report also says this:
|[...] expanded the department's powers to inspect up to 21 program requirements and to act if employers were not meeting them.
Nevertheless, the Auditor General points out that:
|However, we found that, in general, the department inspected employers for compliance with only 7 requirements [...]
In closing, I will ask you a question which will, I think, give you an opportunity to summarize the situation well.
What measures are you going to take to be even more rigorous, and to ensure that businesses offer the jobs to unemployed Canadian workers before seeking to hire foreign workers?