October 2013

MAC Economic Commentary

Temporary Foreign Worker Program was designed for a good reason

By Pierre Gratton

Canada is on the verge of a critical skilled labour shortage, and the mining industry is not exempt. To help address this situation, a variety of public policy tools are required to navigate different staffing challenges. The federal Temporary Foreign Worker Program (TFWP) – recently the subject of controversy, review and reform – is one tool among many designed to do this.

The Mining Industry Human Resources Council (MiHR) estimates that the Canadian mining industry directly employed more than 235,000 people in 2012 and that in the next 10 years it will need to add another 145,000 to that labour pool. That represents a 60 per cent increase over current capacity, at a time when the number of retirement eligible workers continues to grow.

Over the next decade, mining’s anticipated share of new entrants for the 66 occupations that make up the industry’s core workforce is only 63,350 – less than half of the anticipated need. Unless addressed, industry productivity, competitiveness, investment and socio-economic contributions are all at risk.

The federal government has taken some steps to address this problem. The 2013 budget introduced the Canada Job Grant to help meet training needs in high-demand fields and allocated $241 million over five years to support training-to-employment programs for aboriginal youth. On the immigration front, the introduction of an expression of interest system for the Federal Skilled Worker category, and the movement to a “just-in-time” system that recruits and fast-tracks the applications of skilled workers to meet Canada’s labour market needs, are positive.

These initiatives are designed to facilitate the training of Canadians to meet labour demands and enable new immigrants with identified skills to seamlessly become productive citizens in their new communities. But different employment gaps require different approaches. In some instances, miners cannot find Canadian personnel with the skills needed for particular jobs, and unless these jobs are filled, operations simply cannot proceed. The TFWP helps address acute labour demands because it enables employers to hire foreign workers on a temporary basis. This is only permitted when Canadian citizens and permanent residents are not available or qualified to fill the vacancies.

When it comes to hiring skilled labour, the Canadian mining industry’s first choice is to hire domestically and, preferably, locally in the communities where companies operate. To facilitate this, companies have made and continue to make significant investments in education and skills training for Canadian workers to give them the tools and knowledge necessary to complete the required work.

Despite these best efforts, the local, provincial and national labour markets have not always been able to meet certain employment demands. On these occasions, and only after having sought Canadians to fill jobs, the mining sector has resorted to international sources to meet immediate employment needs. The TFWP has enabled the mining sector to fill these gaps without jeopardizing mining operations, thus avoiding disrupting the jobs of thousands of Canadians that do work in the mining industry.

Recently, there have been accusations of program abuse across several sectors, with one case levelled against HD ­Mining regarding its Murray River coal project in British Columbia. Two unions sought to overturn federal government decisions that permitted the company to hire foreign workers. Requiring workers skilled at modern longwall mining techniques, a method not currently used in Canada, the company maintained that it needed to seek workers beyond Canada’s borders. HD Mining was cleared of any alleged wrongdoing in May 2013. Justice Russel Zinn said there was no evidence before the court on which a finding could be made that HD Mining made any misrepresentation and he upheld the government decisions.

In light of this and other allegations made about the program, the federal government launched a review of the TFWP, making several changes. It introduced a $275 labour market opinion (LMO) processing fee for any employer who seeks to fill a position with a temporary worker. It also placed restrictions on the languages in which job postings are permitted to be published, namely English and French. The government also instituted a three-month minimum job posting period before a company is eligible to apply for a LMO and introduced a new and more stringent LMO application process.

The review also suspended the accelerated labour market opinion (ALMO), and no determination has yet been made as to whether it will be reinstated. ALMO was designed to provide trusted employers, based on historical applications and recruitment practices, with a simplified process to fill temporary and immediate labour gaps. By forcing all companies into the LMO process, and creating the above new rules, companies with pressing employment needs are further removed from locating and hiring needed candidates. In this regard, MAC believes the government should reinstate the ALMO process as soon as possible while ensuring sufficient controls to discourage any abuses.

Pierre Gratton is president and CEO of The Mining Association of Canada.

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