Ottawa’s announcement Monday that it will tighten restrictions to limit the number of low-wage temporary foreign workers in the country should be a boon for young Albertans looking for work, says an Edmonton-based economist.
The federal government is bringing back pre-pandemic rules that made it harder for businesses to hire low-wage workers from abroad.
Speaking to reporters at the Liberal cabinet retreat in Halifax on Monday, Prime Minister Justin Trudeau said his government loosened the rules to help businesses that were facing labour shortages recover from the pandemic.
But the economic situation is different now, he said, and Canada “no longer needs as many temporary foreign workers.”
“We need Canadian businesses to invest in training and technology and not increasing their reliance on low-cost foreign labour,” Trudeau said.
“It’s not fair to Canadians struggling to find a good job, and it’s not fair to those temporary foreign workers, some of whom are being mistreated and exploited.”
Provincial statistics last month showed unemployment for Albertans aged 15 to 24 was more than 14 per cent, compared to an overall unemployment rate of 7.1 per cent.
Moving forward, federal rules say businesses will be allowed to hire a maximum 10 per cent of their workforce from the foreign worker program, down from 20 per cent.
University of Alberta economics professor Chetan Dave told CTV News Edmonton more foreign workers were needed during the COVID-19 pandemic but that the 20-per-cent threshold is now unsustainable.
“Given the housing situation, when you have that surge, they have to live somewhere, and a lot of these folks are in the process of coming and trying to get on the permanent residency track,” Dave said on Monday. “We were just not in a position to handle that large of an influx.”
In a statement to CTV News Edmonton, Garrett Koehler, the press secretary to Alberta’s minister of immigration and multiculturalism, said jobs filled by temporary foreign workers are typically entry-level ones that young Albertans could “readily fill.”
“Decreasing the amount of these temporary workers is an opportunity for more of our youth to enter the workforce,” Garrett Koehler said on Monday.
Monday’s announcement is the latest effort by the Liberals to limit the number of people coming into the country in response to criticism of its immigration policies.
Effective Sept. 26, the government will refuse applications for low-wage temporary foreign workers in regions with an unemployment rate of six per cent or higher.
Workers hired through the low-wage stream will be able to work a maximum of one year, down from two years.
There will be some exceptions to the rules for specific sectors such as health care and construction.
“To those who would complain about worker shortages, here’s my message: there is no better time to hire and invest in Canadian workers,” Trudeau said.
Strong population growth over the last couple of years, driven by high immigration, has increased demand for housing and economists say that has worsened affordability.
The temporary foreign worker program has also been criticized for allowing cheap labour into the country at a time when the economy is slowing down.
When the federal government eased restrictions for the program in 2022, Canada had about one-million job vacancies across the country and the unemployment rate dipped to a record-low of 4.9 per cent.
Job vacancies have decreased significantly since then and the unemployment rate is climbing as high interest rates restrict economic growth.
In July, the unemployment rate was 6.4 per cent.
Economists have criticized the federal government for maintaining the relaxed rules, arguing that they discourage businesses from investing in innovation and suppress workers’ wages.