‘Not addicted to cheap labour’ — Businesses feel unfairly targeted by foreign worker cuts

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Michael Aitken spends most of his time extinguishing fires and responding to medical calls in Ontario, but working as a professional firefighter didn’t stop him from starting his “dream” restaurant, which has been serving tacos and churros for about eight years now.

But his journey as the co-owner of El Mariachi Tacos and Churros in Mississauga, Ont., may come to an end early next year due to new policies announced by the federal government that have made recruiting foreign cooks nearly “impossible,” he said.

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“We rely heavily on the foreign worker program because we cannot find the right cooks here,” he said. “I tried hiring cooks locally in my first year and it didn’t work out. Today, I have 14 foreign cooks who are able to maintain the food’s authenticity consistently. Without them, I have to shut down and that will put 60 people, mostly Canadians, out of work.”

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Other companies in certain sectors are also going to find it harder to hire foreign workers and international students to fill key roles, keep their businesses alive and well, and give the economy a much-needed boost after Ottawa’s series of recent cuts to immigration levels.

The government’s goal is to reduce the total number of temporary residents by about 900,000 people to around five per cent of the overall population by 2026. Currently, there are about three million temporary residents in Canada.

The reductions come after a two-year period when the number of temporary residents increased manyfold compared to previous years as Canada tried to fill a record number of job vacancies coming out of the pandemic.

But with job vacancies declining and the unemployment rate rising during the past few quarters, Prime Minister Justin Trudeau’s government decided to tighten its immigration policies.

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“Our economy is in a different place,” he said in a press conference on Oct. 24. “We need to let our communities, infrastructures, catch up to the population … so we can get back pragmatically to a place where Canada can once again grow.”

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Trudeau said businesses need to invest in Canadians, but companies located in remote areas and those in certain sectors, such as hospitality and tourism, feel unfairly targeted because they are still facing labour shortages and the federal government’s recent decisions are likely to worsen their situation.

Location matters

The government’s policies provide some leeway for employers to continue hiring foreign workers in industries such as health care and construction, where Ottawa feels there’s still a need, but businesses in other sectors say the government has either ignored or missed out on a few key issues for them.

“I think the government does not separate statistics on the location,” said Lara Kemps, an assistant general manager at a resort in Ucluelet, B.C., which has a population of about 2,000 on Vancouver Island. “The West Coast is different. It’s harder to get workers out here.”

The Black Rock Oceanfront Resort is a 133-room property that’s “heavily reliant” on the government’s Temporary Foreign Workers Program (TFWP) to hire housekeepers and restaurant teams. The number of job applications the resort receives from Canadians looking to work for more than a couple of months is “very few,” she said.

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Similarly, Angela Pollak, chair of a business association in South Algonquin, Ont., a town with a population of about 1,000 people, said there’s a “distribution problem” as far as foreign workers are concerned since not many Canadians are looking to work in remote towns.

“When a business is not open for as many hours as they want to be open because they don’t have staff, it’s a critical failure in our ecosystem,” she said. “If restaurants aren’t open when tourists come to visit, they’re not going to come back, right?”

A key reason why remote towns fail to attract workers is because of the lack of housing in the region, Pollak said. But problems linked to labour shortages aren’t just limited to towns that are sparsely populated.

The 55-year-old hired local cooks in his first year as a business owner, but they “didn’t last” as they moved on to other businesses, which made maintaining his restaurant’s consistency difficult. Culinary school graduates in Canada prefer working in “bigger, corporate” restaurants where they have a chance to move up the ladder and not in an independent restaurant like his, he said.

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“In a restaurant like my own, you are hired as a cook and you are basically going to stay a cook, because that’s what we need,” he said. “So, that’s difficult.”

As a result, Aitken decided to use the TFWP to bring in cooks from Mexico. The move resulted in bringing a more “authentic” flavour and added more stability, since workers who come into Canada through this program generally tend to work for the same employer until the end of their work permit.

“The government tells us to invest in Canadians. How am I going to teach knife skills, cooking skills, temperature? That’s not my job,” he said. “That’s what schools are for. My job is to look for experienced people to do the job. If I hired people with no experience, imagine the number of work complaint claims I would have with people cutting half their fingers off.”

About 4,500 kilometres away from the hustle and bustle of the Greater Toronto Area, similar issues are cropping in the small town of Tofino, B.C., located on Vancouver Island.

Known for its wild natural scenery, lakes, rainforests and sandy beaches, the town is a popular spot for tourists during the summer. Going forward, though, many hotels and resorts in the region expect to limit their services due to the restrictions on foreign workers.

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“We won’t have enough cooks, servers, and we will have to roll back services,” said Melody McLorie, the director of human resources at the Wickaninnish Inn, a 75-room hotel. “Such as the picnic that we organize during summers. We may not do that. We won’t be able to clean all our rooms because we won’t have enough room attendants. They won’t be sellable.”

About 40 of the hotel’s 200 employees are currently foreign workers. It has been using the TFWP for 15 years and a key reason why the resort relies on it is because there just aren’t enough people to hire in town, which has a year-round population of around 3,000 people.

Foreign workers are not being hired over Canadians

Melody McLorie, HR director at the Wickaninnish Inn in Tofino, B.C.

“Our high school graduating class is double digits; it’s not even 100 kids,” Mclarie said. “People who live here likely already have jobs or are business owners. It’s not a huge market to pull from. Foreign workers are not being hired over Canadians.”

She said she understands the need for cuts to the overall immigration numbers amidst Canada’s ongoing housing crisis, but believes the hospitality industry has been unfairly targeted since most of its employers house their own employees.

Sabrina Donovan, a general manager at the Pacific Sands Beach Resort in Tofino, said it’s easier to plan ahead with workers coming through the foreign workers program since they are bound to work for the employers that bring them to Canada for as long as their work permit remains valid, which has generally been around two years.

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“That’s something we haven’t been able to do relying solely on Canadian employees,” she said. “We know that TFWP employees are here to stay for up to two years. This way, we are able to have a core group of employees who help us provide better service to our customers, which in turn helps our businesses grow.”

Tougher entry points

Some workers who come through the TFWP tend to apply to become permanent residents, which eventually paves the way for citizenship. But to become a permanent resident, you need to score enough points to make the cut-off level in Canada’s Comprehensive Ranking System (CRS). Points are awarded based on age, foreign and Canadian work experience, English and French language proficiency and education.

Recent changes have made it tougher for prospective immigrants to beat the high cut-off scores to qualify.

One reason why the cut-off scores are so high today is because there are a lot more people competing for a limited number of permanent residency spots annually due to a record increase in the number of temporary workers and students in recent years, immigration consultants say.

A new policy introduced in 2023 that allows the government to bypass the existing immigration ranking system and set lower cut-off scores for certain groups, such as engineers, health-care workers and French speakers, has also played a role in raising the scores, they say. The result is that the policy leaves fewer spots for thousands of general applicants who don’t fit into those groups.

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These changes, combined with the recent policies announced by the government to restrict the number of temporary residents, mean that temporary foreign workers, who would normally have become permanent residents, are unable “to get to that next step,” so they leave, McLorie said. “This challenge hasn’t really been addressed.”

As an example, Aitken said he has an employee who has been working for him for seven years thanks to multiple work permit renewals. But he will likely need to leave next year after his permit expires because he doesn’t have the required points to become a permanent resident, and his temporary work permit won’t likely be renewed due to the new government policies.

“He contributes to the economy. His family is here. His kids go to school here, but (the federal government) won’t allow this one guy because he is apparently easy to be replaced,” Aitken said.

While Aitken, McLorie and other businesses warn of shutdowns without the TWFP being maintained as is, the government and some economists say that Canadian businesses have become addicted to cheap labour.

McLorie said these statements seem to spread the narrative that only “terrible businesses” rely on temporary foreign workers because they want to pay the minimum wage and boost their profit margins and that’s why Canadians don’t apply to them.

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“That is not the case,” she said.

People make those assumptions because the TFWP is divided into low-wage and high-wage categories, McLorie said. Under the program, foreign workers are categorized as low-wage workers if they earn below the median hourly wage set by the province or territory.

For example, that’s $28.85 per hour in Alberta, but $27 in Ontario. She said low-wage workers in many industries end up earning $25 to $26 per hour.

“That’s a fairly high wage,” she said, adding that her resort pays more than the minimum wage. “In many occupations, they would be quite happy to be working at that wage.”

Similarly, Aitken said he uses the TFWP to find cooks with “authentic Mexican experience,” not because they’re cheap labour.

“We provide more than the minimum expectations for the job, including extended health and dental benefits,” he said.

Both Aitken and McLorie say that businesses would rather hire Canadians instead of spending thousands of dollars to bring foreign workers into the country, but there’s not a lot they can do when they don’t get the right applicants.

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With restrictions on foreign workers, McLorie said her resort has decided to double down on trying to hire from within Canada.

“If we visited schools every other year for workers, we will now go every year, trying to capture those graduates,” she said.

She has also participated in programs where new permanent residents get placed in hospitality positions.

Despite all that, McLorie doesn’t think it will be enough.

Aitken has already attended a host of meetings with government officials and business associations, hoping that someone will listen to his problem and perhaps reverse some of the recent restrictions.

“I am praying that business associations can get through to the government so that they can change the policy,” he said. “But it doesn’t look like that’s going to happen.

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