…But Is It Good For Canada?
Last Thursday, April 25th 2012, Human Resources and Skills Development Canada (HRSDC) announced the implementation of a new Accelerated Labour Market Opinion (A-LMO) program. The introduction of this accelerated program is undoubtedly welcomed by many employers, who have been frustrated by rising LMO processing times across Canada. However, it is important to look at what kind of employer this program will help out, and what ramifications this may have for the overall Canadian labour market.
The A-LMO, which promises the issuance of a Labour Market Opinion within 10 business days, is not available to all employers. In order to be eligible, employers must, among other things, have been issued a positive LMO within the past two years. While this may benefit a few small businesses, the vast majority of employers that regularly secure LMOs for foreign workers are big national and multi-national corporations. They will likely make up a big part of the demographic that will use this A-LMO program the most.
In my March 2012 and December 2011 blog posts, I described how Canadian immigration policy is shifting to rely more heavily on employers. For both temporary and permanent immigration, the private sector is being given an increasingly large mandate to select workers and help shape the ways in which they are brought to Canada. I cautioned that such a focus on employer-driven immigration has the potential to result in a fixation on short-term solutions to Canada’s labour problems, as opposed to addressing labour market issues that will persist long after immigrants have become settled residents or returned home.
It seems that through this new A-LMO process, HRSDC is doing just that. It helps mostly big businesses grow their temporary workforce through skilled foreign labour that, given the current worldwide economy, is more and more being offered at a discounted price. For example, through the new A-LMO system, employers may offer a foreign national a job with wages that are up to 15% below the current prevailing average wage for that occupation in Canada. This can be done provided that other employees in the company are being paid that same lower wage. However, it stands in contrast to requirements for a traditional LMO, which mandate that employees are paid a salary equal to or exceeding the prevailing wage in their region.
The lowered wage option has the potential, while not directly undercutting the market, to slowly drive down labour costs. Canadians and foreign workers alike will be reluctant to demand higher wages when it is clear that the government condones work force growth at a payment level below the national average. These lower wages may be good for employers in the short term, helping them to keep costs down while expanding business. However, as I have mentioned before, “what is good for GE is not necessarily good for Canada”.
A goal of Canadian immigration is to create communities of financially and socially integrated immigrant communities. These are mostly created through permanent residents and Canadian citizens. Oftentimes, a temporary worker will come to Canada and then transition from temporary to permanent status. However, it is not necessarily in the interests of a private enterprise to keep workers on a permanent basis. For many businesses, the most cost-effective route may be to a rotating cast of skilled temporary workers, who will return home after a couple years in Canada. This may especially be the case if workers can be paid at less than the prevailing wage. Overall, this formula may result in the Canadian workforce suffering losses not only of personal income, but also of critical skills and knowledge as talented workers return home or go elsewhere after their temporary status expires.
This is not to say that employers are focused only on driving down workers pay –they’re not. However, any good business is responsible first and foremost for improving their bottom line, and keeping labour costs down is an important part of achieving this goal. Whether this will benefit Canadian economy and society is not the responsibility of a private enterprise, nor should it be. In focusing on employers, the current government is forgetting that setting immigration policy is not only an exercise in securing short term growth. It is also a long-term commitment to economic stability, and to nation-building.