Canada Moves to Reduce Foreign Worker Program Abuse

By David North on May 1, 2013

While in the United States the two political parties seem to compete with other as to how far to expand foreign worker programs, the Canadian government seems to be moving — at least a bit — in the opposite direction.

The most recent controversy started when an H-1B-using outsourcing firm (in the States) spread its tentacles into Canada, and started replacing Canadian workers with foreign ones at the Royal Bank of Canada. That stirred many protests and a lot of media coverage.

The firm playing the same role below and above our northern border is iGate, an unfortunately named U.S. outfit, which, according to Wikipedia, is a "California-based outsourcing company with the majority of its operations in India and most of its 30,000 employees based in Bangalore."

The Royal Bank of Canada, as its name implies, is a major Canadian institution. It is 149 years old, it is the largest corporation in Canada, and has world-wide operations (you will find its branches all over the Caribbean, for example.) It sailed through the financial crises of a few years ago with flying colors because Canada regulates its banks much more firmly than we do.

The Royal Bank's decision to drop resident workers for foreign ones set off the kind of firestorm we, in the States, can only envy.

The Canadian government subsequently has taken steps — perhaps baby steps — to limit the damage that its foreign worker program has done to Canadian workers. It will create a new fee for employers wanting to hire the alien workers, will increases the cost of a work permit for foreign workers (now set at the bargain rate of $150 Canadian), and has eliminated a regulation that appeared to allow employers to pay foreign workers 15 percent less than resident ones, according to media reports from CBCNews and Reuters.

Critics, speaking from the point of view of Canadian workers, say that the government's moves are too mild and too late; some Canadian employers, on the other hand, say that the new rules are significant and worrisome.

The government of Canada is run by their Conservative Party, a pro-business organization, more like the British Tories under David Cameron than the Tea Party portion of the American GOP. Canada's is a parliamentary democracy, so the government's decisions are, in a word, decisive, and are not subject to a vote in the Parliament, which the Conservatives would win anyway.

I am grateful to Ron Hira, a professor at the Rochester Institute of Technology, for calling these events to my attention. (He is closer to Canada than I am.)