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Alberta companies allowed to pay less to foreign workers

Date

2013-09-03

Newspaper title

The Calgary Herald

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Hundreds of Alberta employers are being allowed to bring temporary foreign workers into the province at minimum wage despite a federal government requirement they be paid at or near market rates.

Internal documents reveal officials at Human Resources and Skill Development Canada are letting businesses like big restaurant chains and large nurseries pay imported employees as little as $9.75 an hour.

The Alberta Federation of Labour — which obtained proof of the 243 approvals during a recent 10-month period through a federal access to information request — says the government is sanctioning the exploitation of temporary foreign workers.

See below for a list of companies given approval to hire minimum-wage foreign workers.

“They’re being used as pawns by employers who don’t want to respond to the market signals that are telling them they need to raise wages,” AFL president Gil McGowan said.

“The TFW program is a train wreck that needs to be scrapped or rolled back to only include skilled jobs where there are demonstrated shortages.”

Don Drummond, a former chief economist with TD Bank and deputy minister with the federal finance department, worries the documents show the TFW program is being used to artificially suppress wages in the province’s labour market despite a robust economy.

“If this program is creating a substantial number of positions at minimum wage,” said Drummond, “it’s dragging down wages throughout the province’s entire economy.”

Over half the employers who got approval to pay minimum wage are in the food service sector.

Some are small businesses, but others are outlets of large chains like Boston Pizza and Ricky’s All Day Grill.

While Earl’s Restaurants got federal permission to hire kitchen staff at minimum wage under the TFW program, a spokesperson for the upmarket chain said entry level workers actually earn $13.61 an hour in skilled positions, while unskilled employees like dishwashers get at least $10.96 an hour.

Almost one-third of the Alberta employers with permission to pay minimum wage — which will remain the lowest in the country despite a 25-cent an hour hike on Sept. 1 — are in the horticulture sector.

Jim Fowler, an accountant at Blue Grass Sod Farms, said the Calgary-area firm has permission to pay the four Mexicans it employs seasonally $9.75 an hour, although it actually gives them a $10 wage.

Asked whether the firm had offered more than the minimum to try to attract Albertans to what Fowler said was “physically demanding” work, he said “we’re here to try to make a dollar, we can’t do that.”

Rather than offering a wage that would draw applicants from chronically-unemployed groups in Canada like aboriginals, new immigrants or those in economically-depressed areas of the country, Drummond said the TFW program is offering Alberta employers a way to avoid normal market forces.

“You’re not going to move from Windsor to a sod farm in Alberta for $9.75 an hour,” he said.

“I can well imagine it’s not very easy to live there on that little.”

Dr. Kellie Leitch, the federal labour minister, did not respond to written questions about why approvals were granted for Alberta employers to offer foreign workers the minimum wage.

Up until the end of April this year, the TFW program only allowed employers to pay five per cent less than the “prevailing wage” for a lower-skilled occupation, provided they could show that Canadian workers doing the same job at the same location were paid at that rate.

The rapidly-growing program now requires imported workers be paid the same wage as resident employees.

Of the 202,000 temporary foreign positions approved last year, more than 40 per cent were for Alberta employers.

Richard Truscott, provincial director with the Canadian Federation of Independent Business, said Alberta’s labour shortage is the reason it has a disproportionate share of workers in the program.

“No business owner in their right mind is going to go through the cost and hassle of trying to bring in a worker if there was someone in the local economy who was willing, able and qualified.” Truscott said.

But Kevin McQuillan, a University of Calgary sociologist, said there’s been no major spike in wages in unskilled jobs that would indicate a labour shortage in the province.

“I’m suspicious that employers are using the TFW program as a simple and cheap way to find workers willing to be paid our low minimum wage.” McQuillan said

“My concern is it’s a Band-Aid solution to the problems we have in the labour market.”

While Alberta has a smaller proportion of workers earning minimum wage than any other province, those employees still number nearly 30,000.

Dave Hancock, the province’s human services minister, said he’s concerned that half are full-time workers who have been in those jobs at least 12 months.

Nearly 14 per cent have stuck in the same low-wage position for more than five years.

“We need to look at what’s holding them back and why they’ve been in that job so long,” Hancock said.

“Most people don’t stay in a minimum wage position for a significant period whether they’re a temporary foreign worker or not.”

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Content types

Documented cases of abuse

Target groups

Public awareness, Unions, and NGOs/community groups/solidarity networks

Geographical focuses

Alberta

Spheres of activity

Management of human resources and Political science

Languages

English