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Canadian Prime Minister Responds to Outcry, Reinstates Prevailing Wages for Guest Workers

Canadian Prime Minister Harper

Following the controversy sparked by the RBC-iGate affair in which the Royal Bank of Canada was replacing Canadian IT workers with foreign counterparts in order to lower labor costs, the Conservative government of Prime Minister Stephen Harper has announced changes to the country’s temporary foreign labor program.

The changes, made under duress resulting from growing public outcry against the program, will eliminate provisions that allow employers to pay foreign workers up to 15 percent less than the prevailing wage. For many, the changes are too little too late and are viewed as a mere PR ploy from a falling prime minister. Recent polling shows that 55 percent of Canadians do not think Harper should run for another term.

Leading the charge against Canada’s temporary foreign labor program has been the union movement. The 15 percent pay dock rule is part of a broader anti-labor agenda being pushed by the ruling Conservative Party. Under the traditional temporary foreign labor program, guest workers could only be granted work visas if jobs could not be filled by Canadians and would pay the prevailing wage. The Harper government’s changes to the program allowed employers to steeply undercut wages. As readers of this blog know, undercutting wages for a select group of people often results in lower wages for all and, in this case, meant an influx of foreign workers being brought in by companies looking to take advantage of cheap labor, thus spurning Canadians.

The Alberta Federation of Labour calls Harper’s new announcement “cosmetic”. President Gil McGown told the Globe and Mail:

“This is more slippery politics from the Harper government. They’re trying to give the impression that something big is being done to address public concerns … when in reality the foundations of the program remain unchanged.”

Migrant workers’ groups note that the legislative reforms do little to end exploitation of workers. Naveen Mehta of the United Food and Commercial Workers Union Canada told The Star that she has “little faith that they would result in anything meaningful. It’s just (smoke and mirrors).” Chris Ramsaroop of the Migrant Workers Alliance for Change added, ”The changes announced today are mostly about rearranging deck chairs on a sinking ship.”

The organized labor outcry has been ubiquitous. 650 delegates representing Canadian steelworkers passed a resolution calling for the Foreign Temporary Worker Program (TFWP) to be scrapped all together in favor of a program that promotes job training and job creation. Chaka Rukobo, a steelworker from Yellowkife, NWT told Yahoo! Canada that the TFWP is “a race to the bottom.”

The United States and Canada share the common burden of cheap foreign labor being shipped in despite dueling slow recoveries. Unfortunately, Conservative leaders is both countries misunderstand — or perhaps ignore — the relationship between wage suppression and the economy as a whole. Ensuring prevailing wages, as the Harper government now claims to be doing and as the current U.S. immigration reform package proposes to do stateside, is an important step toward deincentivizing the hiring of temporary foreign workers. Without stiffer enforcement and penalties in the guest worker visa realm, though, the tendency toward abuse of the system and mistreatment of workers will not be reversed.


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