Jason Kenney faces foreign-worker fallout in own backyard

James Rajotte has been getting an earful.

Like many of his caucus colleagues, the Conservative MPfrom the riding of Edmonton-Leduc is taking a lot of flak about his government's decision to reduce access to temporary foreign workers.

"I've certainly been receiving a fair number of complaints from a lot of business owners, especially in the small business and restaurant sector," Rajotte said in an interview with CBC News.

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"My overall perspective is that there are labour shortages, and business owners are not (using temporary foreign workers) because they want to but because they have to."

The further south you go in his riding, Rajotte says, into the Nisku oil and gas industrial park for example, the lower the unemployment rate gets, and the more acute the labour shortage.

"High wages (in Nisku) means a cascading effect on other sectors," Rajotte noted. A big part of the problem, he said, is finding people willing to work long hours in those sectors, especially in the restaurant industry.

"These (employers) are not taking an easy route and hiring foreigners;this is a last resort," he says.

Like most government decisions, the clampdown on temporary foreign workers has come with a political price.

Last spring, as media reports swirled about questionable use of the scheme by companies small and large, Employment Minister Jason Kenneymetfor days on end with his staff, hearing hours of briefs and brainstorming a solution, according to a senior government source.

Kenney knew he was walking a political tightrope, trying to maintain the program in industries and regions where employers face legitimate labour shortages, while clamping down and crucially, being seen to clamp down on companies that are allegedly displacing Canadians to get cheaper labour.

The minister had long been troubled by reports that included such examples as a coal mine in northern B.C. which listed fluency in Mandarin as a job requirement when requesting foreign temporary workers. The case was the subject of a union-led federal court challenge, but was dismissed.

Treatment of waitresses a 'kryptonite moment'

But the final straw, according to an official who helped craft the government response, was a report that two waitresses were laid off in Estevan, Saskatchewan, only to be replaced by foreign workers.

"That was the kryptonite moment for us," the source recalls. "This is one of the hardest places to find Canadians (to work) and yet, they were laying off Canadians."

Kenney's decision: phase in a 10percent cap on the number of low-wage workers coming in, ban their use in areas where unemployment is six per cent or higher, and increase processing fees and fines for those who abuse the program.

The result: applications to the program were down by 75 per cent this summer over last, Kenney told the Commons last week.

But the result is also growing anger among employers in sectors as far-flung as the fashion and film industries, to fish packing plants, to the hospitality sector and restaurant industry, to mines in remote northern regions.

All say the changes create too many obstacles in a tough labour market.

And nowhere are the critics more vocal than in Alberta.

The political problem is so acute that the province's new premier, Jim Prentice, weighed in this week, saying temporary foreign workers will be one of the first issues he discusses with his old boss, Prime Minister Stephen Harper, when he meets with him for the first time in his new role (possibly next week).

Labour shortages mean need is real,economist says

The problem in the West is real, argues Philip Cross, a former chief economist at Statistics Canada.

Cross penned a report last spring for the Fraser Institute entitled, "Do labour shortages exist in Canada?" His answer: a resounding yes in Alberta and Saskatchewan, and to a lesser extent in British Columbia.

"It's a real phenomenon.You can't say nothing is happening," he argues.

Cross points to the evidence he's collected:

• 80 per cent of the temporary foreign workers brought into Canada were going to B.C. and Alberta.
• The youth unemployment rate in Alberta is low.
• More than a third of people in Alberta are working more than 50 hours a week.
• Many older workers are delaying retirement in order to work longer.

He warns these are "coping mechanisms" in a tight labour market that cannot be sustained.

"I think a lot of employers are saying...these are just Band-Aids. We need a longer-term solution."

Other options

Cross says the government has options other than allowing in more foreign workers. For example, he suggests finding a way to encourage the high number of unemployed youth in Ontario to move west.

Rajotte, the Alberta MP, also says a solution could take other forms.

"I guess I'd like to see a recognition of the reality our province is facing in terms of the labour situation," he said. "I understand the concerns about the temporary foreign worker program, but perhaps there are other ways to address it. Perhaps through changes to the immigration system."

In that regard, Rajotte echoes the sentiments of NDPimmigration critic Jinny Sims, who says that even with the changes, temporary workers are still too easy to access. She would much rather see long-term immigration used to compensate for labour market problems.

Kenney, for his part, is standing firm on the new policy.

His office has argued that businesses, small and large, needto do a labour market assessment as part of their business plan. If they have to offer higher wages to attract people, so be it.

Still, concern about the repercussions could explain the government's haste to offer a break to small business on EI premiums announced earlier this month by Finance Minister Joe Oliver.

Some Conservatives seem to feel the pot needs sweetening, as they march into election season running on their banner theme: economic prosperity for all.