Canadian businesses under fire for hiring temporary foreign workers, unpaid interns
OTTAWA—What’s plaguing corporate Canada?
In recent weeks, Canadian businesses—sitting on historically massive cash reserves—have been under fire for using temporary foreign workers or unpaid interns, and chided by political leaders for failing to raise wages or invest in employee training.
They’ve been maligned even by the traditionally business-friendly Fraser Institute for collecting billions of dollars in so-called corporate welfare for decades.
A report by the International Monetary Fund (IMF), meanwhile, sounded alarms about how Canadian companies are accumulating so-called “dead money”—idle cash reserves—faster than any other country in the G7.
Statistics Canada data shows Canada’s corporate cash hoard was $626 billion in the last quarter of 2013, a jump of six per cent over the previous quarter—more than the federal debt and almost a third of the country’s gross domestic product (GDP).
The agency also reports that the number of minimum wage and part-time jobs in Canada has been steadily increasing.
The Canadian Centre for Policy Alternatives has found that CEO pay for Canadian public companies listed on the Toronto Stock Exchange (TSX) has ballooned by 73 per cent between 1998 and 2012, the latest figures available.
“It’s completely ridiculous,” Jerry Dias, president of Unifor, Canada’s largest private-sector union, said in an interview.
“They’re cheap as it relates to paying workers or investing in their employees, but they’re not cheap when it comes to paying themselves. And the jobs they’ve been creating in recent years are largely part-time; it’s all about circumventing having to pay benefits.”
Jayson Myers, head of Canadian Manufacturers and Exporters (CME), doesn’t deny the optics have been nasty for corporate Canada in recent months.
But Myers takes issue with the notion that Canadian business leaders are lining their own pockets while neglecting to invest in training or pay decent wages.
“I think it’s misinformed even when it’s coming from a former Bank of Canada governor,” said Myers in a reference to Mark Carney’s famous scolding two years ago of Canadian businesses about their cash reserves.
“Cash reserves are very high but that isn’t a reflection of a failure to invest … if you look at levels of investment right now, at least in manufacturing industries, it’s at an all-time high and is going up right across Canadian industry.”
A February report by the Conference Board of Canada found that between 2010 and 2012, Canadian organizations hiked funding for training, learning and development.
Spending was up $17 per employee, the report found—a modest reversal of the downward trend of the past two decades.
Nonetheless, some are troubled by the hiring bonanza of temporary foreign workers—there were about 100,000 such workers in Canada a decade ago, compared with 338,000 today—and the thousands of young Canadians working for free as unpaid interns at profitable companies like Bell Canada Enterprises Inc. and Rogers Communications Inc.
Some estimates say as many as 300,000 unpaid interns are employed by companies across the country, although mostly in Ontario, according to an upcoming study by two University of Victoria academics.
“We’ve got all this money in society, more than we’ve ever had before, and nobody seems to have any of it—certainly not young people,” said Sen. Grant Mitchell, an Alberta Liberal who has long raised concerns about unpaid interns and temporary foreign workers.
“You don’t have to look very far to find someone who’s adult child has had to work for free in the last few years, and for a significant portion of time. Why has that become acceptable, and where’s the national leadership that’s going to put a stop to it?”
Dias agreed, saying there are twice as many kids aged 21 or younger living at home now than there were 20 years ago.
“There’s a real problem with youth unemployment, so to have low-skilled workers tied to the Temporary Foreign Worker Program (TFWP), or to have them working for free as unpaid interns, is an absolute injustice,” he said.
Dan Kelly, head of the Canadian Federation of Independent Business (CFIB), said a company applying to bring on temporary foreign workers is hardly cheaping out.
“The temporary foreign worker is already a massively more expensive worker than hiring a Canadian,” said Kelly, citing the costs and red tape associated with bringing on foreign help.
“If there were Canadians available and willing and able to do the job, then employers would be hiring them—it would actually be cheaper for them.”
Myers said he agrees, adding that many companies have a genuine need for skilled labour that simply isn’t available in Canada.
“There are real skill shortages out there,” he said. “Even if unemployment levels are high in certain areas of the country, it doesn’t mean there aren’t skill shortages in those regions as well.”