Ignoring the Elephant in the room: Canada’s Real Issues Beyond the Temporary Foreign Worker program

In a world where every policy decision feels like a strategic move in a high-stakes chess game, Canada’s recent tightening of the Temporary Foreign Worker (TFW) program may be a classic case of overplaying our hand. As we try to correct perceived issues, we may be making a fatal mistake that undermines the Canadian economy further. Recent amendments by the Canadian government reflect this all-too-familiar knee-jerk response to complex issues.

The changes include reducing the maximum duration for work permits under the Low-Wage stream to one year, imposing a 10% cap on the number of foreign workers that employers can hire under this stream, and halting the processing of Labour Market Impact Assessments (LMIAs) in metropolitan areas with unemployment rates of 6% or higher. Additionally, a significant new restriction now prevents visitors in Canada from applying for a work permit while on a visitor visa, a rollback of a policy designed to address labor shortages during the pandemic​

In my opinion, these are sweeping restrictions that are an overreaction from the Canadian government, that could worsen the very problems they aim to solve all while ignoring: deeper problems with other immigration programs, structural challenges like declining birth rates and stagnating productivity.

Structural problems still to solve

Let’s start with the basics: Canada’s aging population is not a problem that will disappear if we just squint at the birth rates long enough. The reality is stark — we are not making enough babies to replace our retirees, and our fertility rate is not poised to suddenly leap up.

Instead, the government has chosen to tighten the screws on the TFW program, a vital artery supplying the Canadian labour market with necessary workers, many of them not covered by current exemptions to the new restrictions that only focuses on the agricultural, construction and health sector.

Instead of preserving the TFW program’s efficacy by maintaining its accessibility for professions in demand, policymakers have cast a wide net that catches everything — including many of the fish we actually need.The result? A labour market left gasping for air, while employers, especially in sectors like the manufacturing and the knowledge economy, scramble to fill roles that help sustain the productivity of our economy.

Student much?

The real thorn in the side of Canada’s immigration policy isn’t the TFW program in my opinion. Everyone can admit that immigration numbers were getting out of control, but in my opinion the real target should have focused on other programs: such as the ballooning number of international students that came to Canada through dubious “garage colleges”.

These institutions mushroomed across the country, luring students with the promise of eventual residency but failing to secure them a place in the labour market. The result is a growing cohort of graduates currently in limbo, as recent protests across the country have highlighted.

And although the student IRCC program was recently overhauled by the Canadian government with the aim to bring it back to control, the government is overplaying its hand by also targeting the TFW program which was already effectively addressing genuine labour shortages.

Myopic Permanent resident Express Entry draws

Compounding the issue, the current permanent immigration pipeline continues to favour permanent resident candidates who are not necessarily aligned with Canada’s labour market needs.

As an example, the recent overemphasis on francophone Express Entry pools, appears more focused on satisfying political narratives than on bolstering the workforce. If the goal is to address Canada’s productivity slump, the focus should shift towards attracting blue-collar workers with in-demand skills. The truth is that without a broader policy to maintain French alive in English Canada, the second generation of any new francophone immigrants is likely to assimilate into its English-speaking environment, ultimately undermining the goal of establishing sustainable Francophone communities in English Canada.

Another example showing the myopic vision to our permanent immigration policy is exemplified by how our Express Entry system still awards far too many points to individuals holding PhDs in fields like sociology, which currently offer limited returns to our immediate economic needs. This could be the theme for a whole separate article so I will stop myself for now from badmouthing on any other branches of the social sciences.

Quebec, the reasonable player

I’d like to take a moment to highlight an important exception in the approach toward Temporary Foreign Workers (TFWs): Quebec. For now, Quebec’s TFW program remains more aligned with current labor market needs by continuing to offer a streamlined process for employers seeking LMIAs for positions on a targeted list of in-demand professions. Additionally, this program still allows for three-year work permits, giving employers greater flexibility.

While the recent six-month “freeze” on certain sectors is understandably concerning for Montreal employers, it appears to be a reasonable response to the ongoing housing crisis on the island. However, I believe the list of exempted sectors should be expanded to better address more in-demand jobs.

Moreover, the permanent selection process in Quebec seems more coherent and adaptable compared to the Canadian federal system. In my opinion, Quebec’s approach is better suited to the province’s specific labor market needs and demographic challenges. This flexibility enables a more targeted and effective immigration strategy, in contrast to the broader, more rigid policies at the federal level.

The Swinging Bridge of Over correction

Here’s the conundrum: over-reactive policies coming from the Canadian government create an environment of uncertainty. Employers, needing to plan their business strategies with predictability, find themselves at sea, unsure if they will have access to foreign workers to fill demand jobs. This makes Canada appear less serious as a business destination, scaring off investments and, paradoxically, hurting our productivity further. Overcorrection risks putting us in a perpetual loop of the “swinging bridge” — the more we react, the more volatile the landscape becomes.

In this delicate game of policy chess, the Canadian government would do well to remember: sweeping moves are seldom the best strategy. Instead, a more thoughtful, nuanced approach could better serve Canada’s long-term economic interests, ensuring that the bridge doesn’t swing wildly out of control.