CE,RC Lcn d arslt i p fo r Wo rkforce Mob i I i ty

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1 CE,RC Lcn d arslt i p fo r Wo rkforce Mob i I i ty Canadian Employee Relocation Council 180 Dundas St. W., Suite 1506 Toronto, ON M5G 1ZB Tel: Fax: Toll-free : CERC (2372) E-maii : info@cerc.ca The Honourable Diane Finley, PC,, M.P. Minister of Human Resources and Skills Development Canada 140, Promenade du Portage Gatineau, QC KIA OJ9 May 27'h 2ol3 Dear Minister Finley, The Canadian Employee Relocation Council (CERC) welcomes this opportunity to provide comments regarding the recent changes to Canada's Temporary Foreign Worker Program (TFWP). CERC represents the interesis of employers across Canada involved in the movement of employees, our membership is representative of Canada's divers economy, and includes many of Canada's largest employers and corporations. Each year Canadian employers relocate over 100,000 workers - the majority of those are skilled and professional employees, and many of them are immigrants. Canadian businesses require access to an adequate supply of well skilled, well trained workers to help their businesses grow and prosper. Canada's immigration programs must be effective in assisting them to meethese objectives. As noted in the vast amount of research undertaken in demographic and labour force planning, immigration is expected to account for the majority of growth in Canada's labour force over the next decade. While immigration alone cannot be expected to solve the looming shortage of skilled workers in Canada, it is nevertheless an important part of a multifaceted solution. The TFWP plays an important role in addressing skills shortages in many industries across Canada. Since the changes were announced CERC has been canvassing its members to gain a deeper understanding of how they will impact business operations. Our members have expressed significant concerns with several of the announced changes, which are summarized below: l. Suspension of the Accelerated Labour Market Opinion (ALMO) program 2. Payment of the prevailing wage and removal of wage flexibility 3. Requiring employers to have a plan to transition to a Canadian workforce When addressing the World Economic Forum in Davos Switzerland, on January 26,2012, Canadian Prime Minister Stephen Harper said, "We will ensure that we make our economic and labour force needs the central goal of our immigration efforts in the future," These recent announcements run counter to this stated vision for Canada's immigration programs. We urge you undertake a formal consultation process to ensure all aspects ofthese changes are fully explored and the consequences are understood.

2 Our members have expressedeep concerns about suspension of the ALMO program, a decision which we believe was centred on the inappropriate use of the program by only a handful of employers. In our view there are sufficient provisions in the Immigration Refugee Protection Act (IRPA) to enforce sanctions against those employers who are abusing the program. The abrupt suspension of the ALMO has made it very difficult for companies to plan. All companies are now being punished for the actions of a few as they will not be able to expedite skills that are desperately needed. Many companies have told us that job offers and aranged transfers into Canada have been rescinded given the uncertain future of the TFWP. This has resulted in additional costs to employers through postponed business plans and cancelled projects. Since its introduction, the ALMO program has delivered significant benefits to Canada's economy. It has created thousands of good jobs and assisted employers who legitimately rely on foreign experienced skilled workers to compete at a global level. Suspending the ALMO is a regressive change and punitive to those compliant employers. These changes have the potential to jeopardize major projects and make it harder for Canadian companies to compete in global markets. In addition to these concerns, and given that resources within HRSDC and CIC have been reduced over the past several months, the changes will result in extensive processing delays. Prior to introduction of the ALMO, employers were experiencing delays upwards of l2 weeks in processing a LMO application. Return to those levels of service will impose significant and unnecessary hardship on employers and have negative consequences for Canada's fragile economicondition. In today's globally competitive business climate the Canadian government must find ways to enhanceconomic activity and growth. This announcement will have the opposit effect. We are deeply concerned these changes will impact legitimate business travellerseeking to enter Canada, and more importantly intra-company transfers. Information from our members indicates that entry is now being denied based on erroneous interpretations of the announced changes. We ask for clarity from your department that these categories of temporary entry and intra-company transfers are outside the scope of the announced changes to the TFWP. We recommend that your decision to suspend this important program be reversed and the following approach be considered. r Reinstitute the ALMO program for employers that meet prescribed requirements of HRSDC. o Provide a process to develop a 'Trusted Employer Program' in key industry sectors that have proven skilled worker shortages. (CERC has proposed such a model to your government under the Beyond The Border Action Plan consultations) o Trusted employershould receive LMO approvals for four years duration. On the issue of the prevailing wage, requiring employers to pay temporary foreign workers at the prevailing wage by removing the existing wage flexibility is problematic for several reasons. Labour markets across Canadare complex. They are driven by local conditions, demand and supply, and levels of experience and skill. Our members have told us that prevailing wage information contained the "Working in Canada" resource data base does not accurately reflecthose market conditions, or salary market surveys. For instance, the prevailing wage change fails to consider how various roles in different industries are remunerated, in addition it makes no distinction between entry positions and those positions requiring several years of experience. This change will result in equity issues in many companies as foreign workers may now be paid more than Canadian workers that have the same level of experience and skill in many industries. 2lPage

3 We strongly recommend that the current program be maintained. As a solution to concems about wage parity, HRSDC could require employers to validate the payroll where it is less than the prevailing wage, subject to audit by government officials We are in agreement that if the entry of a temporary foreign worker is found to have a negative impact on the labour market or if it is determined that the LMO or work permit was fraudulently obtained, they should be suspended and revoked. We agree in principal with the addition of new questions on the LMO application verifying that Canadian employees are not being replaced by foreign workers however, the recently introduced "Offshoring Questionnaire" as curently drafted will not elicit the information required and is proving difficult for employers to complete. Employers are concerned abouthe impact of answering positively to the offshoring questions. Many of the questions are in regard to contractual agreements and therefore subjecto confidentiality. Further consultations are required with employers to improve this questionnaire. In principle employers have no concern with the Government of Canada's announcement that it would introduce fees for employers applying for temporary foreign workers through the LMO process, providing those fees are reasonable. However, such fees should also be contingent on improved levels of service from HRSDC in the processing of work permits and labour market opinions, such as the timelines being achieved with the ALMO process. With regard to the requirement on employers to develop and implement a plan to transition to a Canadian workforce, while the fundamental principles and objectives of this change are aligned with those of employers to hire Canadian workers first, we have several concerns as to how this may operate in practice. Hiring Canadians is the preferred route before resorting to the costly and cumbersome process of hiring temporary foreign workers. Reality is that skilled workers are in short supply within the domestic labour force. Canada's workforce, not unlike many other developed nations, is aging. At the same time our economy is undergoing a transformation, similar to the industrial revolution of the early 1900's. Canada, along with all other developed nations, is rapidly shifting to a knowledge based economy. This shift is resulting in the shedding of low skilled jobs and creation ofjobs requiring more education and skill. Canadian employers created 280,000 net new jobs in two recessionary years leading up to September,2010, that needed a university degree, according to the Association of Universities and Colleges of Canada. Meanwhile, the country shed 260,000 jobs that didn't need one. Yet, just over onequarter of working-age Canadians have a university degree today. This mirrors the transformation taking place in the European Union, where despite record levels of unemployment, some six million positions cannot be filled because of a lack of skills. According to research conducted by McKinsey and Company, by 2020 employers will be faced with a global shortage of 41 million highly skilled workers, 45 million medium skilled workers and a surplus of 58 million low skilled workers; Canada will not be immune from this global phenomenon. Employers are competing on a global level for valuable and scarce human talent. Our immigration programs, including the Temporary Foreign Worker Program, are vitally important in meeting those needs. A recent report from Human Resources and Skills Development Canada (HRSDC) projects there will be 6.5 million job openings between 201I and Two thirds of these jobs will be in occupations that require post-secondary education. For several years HRSDC has been forecasting that any growth in Canada's 3lPage

4 labour market will come about from immigration. Shortages are forecast in many high skilled occupations, including those in medical, mining, oil and gas, information technology, education and social and community services. In some occupations there would have to be more than three timqs the forecast number of schooleavers and immigrants to fill these positions. In Ontario alone it is projected that by per cent of the workforce will need post-secondary credentials, but just 60 per of the workforce have postsecondary credentials in In a recent survey of Canadian Chief Executives, sponsored by KPMG (March 2013), talent concerns were at the top of the list. In that survey the vast majority of CEO's agreed immigration will be critical to the labour market and most agreed Canada's immigration system should focus on attracting skilled workers more than on family reunification. According to the report, few CEOs believe this is only a short-term problem that can be dealt with by work-permits - most agreed this issue will be with us for the long-term requiring more significant measures. Looking ahead, immigration and temporary workers will continue to play a vital role in Canada's nation building and maintaining Canada's economic prosperity in a global economy. Canada must do more to transition the 400,000 plus temporary workers (and foreign students) curently in the country into permanent residency status. Jhey have acquired Canadian work experience, they have learned our language and culture; they have raised families, helped build communities and paid taxes. Despite the fact that many foreign workers (studiesuggest upwards of 40 per cent) have post-secondary education, only 20,600 transitioned to permanent residency in 201 l. Within this discussion, CERC recommends that immediate measures should be taken by the Canadian government to motivate and assist more temporary foreign workers to transition to permanent residency. A further reason why employers turn to immigration and TFW programs to fill labour shortages is that the majority of Canadian workers are not inclined to uprootheir homes and families for new employment opportunities. In 201 I CERC commissioned Ipsos Public Affairs to conduct a global survey of employees about attitudes towards mobility for employment purposes. In that poll, results for Canada show that just 20 per cent of employees would be very likely to accept a job offer in another city, for a minimum of two years providing the offer included a 10 per cent raise in pay and all moving costs were paid for by the employer. Major reasons for declining job offers in another location include family concerns and housing costs, For example, the average cost of a home in Fredericton New Brunswick today is $ 166,000, compared to $438,000 in Calgary. Incenting employees to move to 'remote' locationsuch as Fort McMunay is daunting when it comes to housing costs where that same single family dwelling goes for $740,000. For many years CERC has been petitioning the federal government to improve tax allowances for moving expenses and home relocation loans that have annualimits which have remained unchanged since A further barrier is internal mobility within Canada. Not all professions and skilled workers can easily move from one area ofthe country to another and be licensed to practice their trade. Since 1993 the federal and provincial governments have been working on an Agreement on InternalTrade (AIT), which includes a chapter on labour mobility. In the face of ongoing delays to reach agreement, the western provinces took the initiative to create the Trade, Investment and Labour Mobility Agreement (TILMA). That agreement has been expanded to include Saskatchewan and renamed the New West Partnership Trade Agreement 4lPage

5 (NWPTA). When it comes into force later in 2013 it will make it easier for workers to move and work in western Canada. Quebec has also entered into a special agreement with France to provide for greater mobility of workers between them. In order to compete on the global stage employers require full mobility between all provinces and territories. Given all of these factors, to impose an arbitrary requirement on employers to "develop and implement a plan to transition to a Canadian workforce" is impractical and does not reflecthe challenges of the global economy and modern workplace. Canadian companies are global and rely heavily on a mobile global workforce, which includes bringing workers into Canada to work on enterprise critical operations. Minister Finley, we understand the public perceptions of the success of the Temporary Foreign Worker Program have been heavily swayed by media reports. Those reports have not always given a full and balanced account of the substantive success of the program. The economic benefits of the TFWP transcend many industries and virtually all regions of the country. Government must work with the business community to communicate how important these programs are to Canada's future economic success. We ask that you give further consideration to the issues and recommendations presented in this letter. We look forward to working with you and your staff to improve the TFWP program for the benefit of all Canadians and our future economic prosperity. Sincerely, CERC CC: Prime Minister Stephen Harper Honourable Jason Kenney, Minister of Citizenship and Immigration Canada Honourable James Flahertv. Minister of Finance 5lPage