CHAPTER THREE


Government Training and Immigration Policy

Learning Objectives

After reading this chapter, you will be able to:

      Identify the main programs and policies that governments have enacted to ensure Canada has an adequately skilled labour force.

      Evaluate the effectiveness of these programs in terms of access to, control of, and benefit from training.

      Differentiate active and passive labour-market policies and describe the effects of active labour-market policies.

In addition to funding and operating the PSE and apprenticeship systems, Canadian governments also provide significant labour-market training aimed at the unemployed and underemployed through various labour-market policies and programs. In 2013, the federal government announced the Canada Job Grant (CJG). The CJG allowed employers to apply for up to $10,000 in government matching funds (at a 1:2 employer-to-government ratio) to help pay for labour-market training. The federal government covered its CJG costs by reducing other training funding that it provided to the provinces and territories. Then-employment minister Jason Kenney justified this very sudden change in funding by saying,

There are some good provincial programs, but there are also many that just don’t lead to jobs. The whole point of the job grant is it will involve employers in selecting employees who they believe will have the propensity to work, getting them specific training, and the employers offer them a job at the end of it.1

As we’ll see below, the Canada Job Grant did give employers control over who got what kind of training. But it was completely unsuccessful in getting unemployed Canadians training to help them attach to the labour market. Instead, the CJG mostly funded training for men possessing PSE credentials who already had high-skill jobs. The CJG was the centrepiece of the Canada Job Fund (CJF), which was one of the three main federal funding streams for labour-market training. The other two funding streams focused on Employment Insurance recipients and Indigenous peoples. Provincial and territorial governments deliver most of the labour-market training funded by these programs in addition to other provincially or territorially funded training.

As we’ll see below, there has been a significant shift in labour-market training policy over time. This change flows from the pronounced shift in government labour-market policy that began in the 1980s. Following the Second World War, Western governments generally pursued a policy of full employment. To maintain full employment, governments utilized demand-side measures to stimulate employment, such as job-creation and economic-development initiatives and the expansion of statutory employment rights. By the 1980s, Canadian governments had largely abandoned the goal of full employment. Consequently, government labour-market policy has shifted from demand-side to supply-side measures.2 Supply-side measures emphasize training to ensure there is an adequate supply of appropriately skilled workers available to employers.

This neoliberal policy shift is often discussed in terms of government deregulation. Yet what has actually happened is that governments have just changed the goal(s) of their regulatory activity. This process of re-regulation means that policies and programs that used to be designed to meet the needs of workers have given way to programs focused on meeting the needs of employers (or “the market”). For example, the goals of Alberta Works are to

• increase opportunities for Albertans to make successful transitions from school to work, unemployment to employment, and from one career path to another, and
• increase the capacity of Albertans to respond to changing skills, knowledge, and abilities required by the economy.3

Such programs are also designed to change the behaviour of workers in ways that align with the interests of employers. As noted in Chapter 1, the profit imperative of capitalism means that a key employer interest is minimizing labour costs. Government-funded training directly reduces employers’ training costs. And income-replacement schemes (e.g., Employment Insurance, social assistance) that pressurize workers to take whatever job is available increase the supply of workers. A larger pool of workers reduces workers’ labour-market power and, thereby, lowers wage costs.

The federal government also uses immigration and trade policy to influence the size and skill level of Canada’s workforce. As noted in Chapter 2, Canada has a long tradition of seeking to meet employers’ demands for workers through immigration and, more recently, temporary migrant workers. Migrant workers may enter Canada on work permits or under the labour-mobility provisions of various “free trade” agreements Canada has signed with other countries. Some critics contend that immigration policy is being used as a substitute to labour-market training and to flood the labour market to reduce wages. Others note that the mechanisms of these programs increasingly shift control over immigration to employers. Examining government training and immigration policy together provides an opportunity to better understand how the state manages the conflicting interests of labour and capital and the implications this has for access, control, and benefit.

Employment Insurance

The shared constitutional jurisdiction for labour-market training means that both the federal and provincial/territorial governments formulate labour-market training policy and deliver programs. The most significant federal intervention in labour-market policy prior to 1945 was the creation of the Unemployment Insurance (UI) system. UI (later renamed Employment Insurance) was designed to provide income support to families during unemployment and ensure that communities were not destroyed by job losses due to industrial change. It also sustained communities that were dependent upon seasonal employment (e.g., fishing, logging).4

At present, Employment Insurance (EI) is funded by mandatory contributions from both employers and workers. The EI system provides two main types of benefits. Most Canadians are familiar with “Part 1” EI benefits, which are financial payments to formerly employed workers who are without jobs. In 2016, financial support was calculated as 55 per cent of the first $50,800 of an employee’s prior insurable earnings. This yielded a maximum benefit of $537 per week. The duration of benefits and the minimum numbers of weeks of employment required to qualify for benefits varies by region, based upon the unemployment rate.5

Relatively few Canadians are aware of “Part 2” EI benefits (called Employment Benefits and Support Measures), which include funding for training to enhance employability. Training funded under Part 2 benefits typically must have a clear link to increasing an EI claimant’s employability (i.e., training must yield job-specific skills that are in demand). Further, EI claims have a maximum duration of fifty-two weeks.6 These criteria generally preclude funding students to attend PSE programs, although there are exceptions—such as claimants who receive EI financial benefits while self-funding short PSE programs.

Provincial and territorial governments administer over $2 billion in federal Part 2 training benefits under the authority of Labour Market Development Agreements (LMDAs).7 For example, Employment Ontario is a part of the Ontario Ministry of Advanced Education and Skills Development. It administered approximately $1 billion in federal and provincial funding in 2014–15 to provide and/or fund services for 1 million Ontarians, including skills-training, career-planning, and job-search programs. Employment Ontario also administers the Canada-Ontario Job Grant (see below), which partly funds employer-driven training.

Canada’s current EI arrangement began to take shape in 1985. The federal Conservative government implemented the Canada Jobs Strategy (CJS), whereby funds (mostly in the form of a wage subsidy) were provided to employers that offered work experience with a training component (however limited). The key outcome of the CJS was cheap labour for employers.8 Overall, federal spending on training fell under the CJS, and the quality of training appeared to deteriorate. In 1989, the federal government implemented the Labour Force Development Strategy (LFDS). The LFDS made it harder for workers to access EI benefits and then used half of the savings to fund proactive training measures largely directed by business interests and intended to help the unemployed adapt to the jobs available to them.9

Canada’s current EI arrangement emerged in 1996. During this time, many OECD governments were shifting from so-called passive labour-market interventions to active labour-market policies. Passive labour-market interventions protect individuals, employers, and communities from the vagaries of the labour market, particularly unemployment, through income-replacement programs. Benefit entitlement is usually based on current or past attachment to the labour market, and these programs make few demands upon recipients. By contrast, active labour-market policies (ALMPs) encourage or require action by individuals, employers, and communities, such as participation in training programs or job-search activities.10

In theory, ALMPs can focus on either demand side or supply side. Demand-side ALMPs seek to directly or indirectly create additional employment opportunities when the supply of labour exceeds the demand for labour. For example, a government may offer a wage subsidy (or other financial inducement) for employers that create new jobs. Supply-side ALMPs seek to increase the number of workers actively seeking employment and/or the quality of the existing supply of workers. For example, the government may require workers to demonstrate that they are taking specific actions towards finding a job. Most labour-market policies contain both active and passive elements. For example, EI has never been an exclusively passive program: recipients have always been required to be actively seeking employment or risk having their benefits terminated.

In 1994, the influential OECD Jobs Study was released. It encouraged the adoption of active labour-market policies, including the use of disincentives or penalties to pressure workers to stay in or return to the labour market, even if that meant lower wages and less favourable working conditions.11 The OECD Jobs Study represented a profound shift in the emphasis of and rhetoric around labour-market policy. Gone was any discussion about the lack of jobs. In its place was a training-based diagnosis: the problem in the labour market and even the economy was that workers lacked the skills necessary to fill existing vacancies and to generate economic growth. The prescription to solve this problem was more education and training and a greater willingness on the part of workers to adapt their expectations to the so-called realities of the labour market.

ALMPs nicely fit with the ideology of neoliberalism, as they build on the notion that the best social program is gainful employment and that the best place for gaining skills and learning how to work is the workplace itself. Employers are invited to define the parameters for acceptable skills and reasonable work requirements. Largely gone is the notion that there is a balance to be achieved between the needs of labour and capital and between equity and the unfettered pursuit of economic growth. Especially silenced are the voices of those who argue that some groups, such as women and racialized groups, should receive preferential treatment to redress the historical biases in the labour market. The effectiveness of ALMPs is discussed in Box 3.1.

Canadian governments have (slowly and unevenly) adopted ALMPs. In 1996 (as part of its deficit-and-debt reduction efforts), the federal Liberal government implemented reforms to Employment Insurance that broadly followed the ALMP prescription. The federal government continued to deliver (largely passive) Part 1 financial benefits, but EI became more focused on returning workers to employment, in part by reducing income replacement and access to employment insurance to pressure workers to take whatever jobs were available.18 The federal government also began transferring responsibility for EI training benefits to the provinces and territories under LMDAs (in part to reduce friction with Québec in the wake of the 1995 sovereignty referendum), an uneven process that was completed only in 2010.19 Further changes to EI in 2012 intensified pressure on unemployed workers to take a wider variety of jobs at lower wages.20

Over time, there has been a precipitous drop in the ratio of EI beneficiaries to the overall unemployed (the B/U ratio). In 1990, 84 per cent of unemployed Canadians received EI benefits. By 1998, the B/U ratio had fallen to 44 per cent, and it has stayed at approximately this level since then. This drop primarily reflects changes to EI rules as well as changing patterns in the labour market (e.g., more long-term unemployed).21 Women were particularly disadvantaged by tighter access rules, with only 32 per cent of unemployed women receiving EI benefits in 1999, down from 70 per cent in 1989.22 Since eligibility to receive Part 2 training benefits turns on eligibility for Part 1 financial benefits, this reduction in female EI eligibility dramatically reduced women’s access to training.23 At the same time, there has been a shift in how training benefits are allocated. Funding for training comprises an amalgam of loans and grants. After 1996, jurisdictions have increasingly expected individuals to tap their own resources and/or take out loans before receiving training grants.24

Overall, Part 2 EI benefits remain an important source of training for formerly employed workers. Access is limited by the federal government’s rules around EI eligibility; thus, the training benefits only previously employed workers. New workers (or those who don’t qualify for EI for some other reason) are not generally eligible for LMDA-funded training. That said, in practice, things are not so neat. A worker who is ineligible for LMDA-funded training but who is seeking to access a specific training program may well still receive the training, with the provincial or territorial government simply billing the costs to a different (non-LMDA) source of funding. Further, as of the summer of 2018, the federal government was negotiating amendments to existing LMDAs that would expand eligibility for Part 2 benefits to include some workers who are paying EI premiums but who would not normally qualify to receive Part 1 benefits. These workers may be eligible for Part 2 benefits.25 This can be viewed as an effort by governments to address the training needs of both new workers and precariously employer workers.

Employers benefit from LMDA-funded training in two main ways. First, EI subsidizes training, because worker premiums pay for half of the costs of LMDA-funded training. Second, EI encourages workers to accept employment even if the worker doesn’t particularly like the terms that are offered. As we saw in Chapter 1, EI has historically contributed to “decommodifying” labour by giving workers an alternate source of income with which to purchase the necessities of life. This serves the state’s goal of social reproduction by reducing employers’ ability to drive exploitative wage-rate bargains. The degree of decommodification created by EI turns on both how accessible EI is and the level and duration of benefit. Reducing the accessibility of EI increases the labour-market power of employers to drive extremely hard wage-rate bargains in loose labour markets. This, in turn, increases the potential for social instability caused by workers being forced to choose between exploitative jobs and poverty.

Labour Market and Workforce Development Agreements

In addition to revamping EI in 1996, the federal government also reduced funding to train individuals who were ineligible for EI Part 2 benefits from $2 billion to approximately $1 billion. This change left those Canadians most in need of employment services inadequately served. Combined with other policy changes during this period, women’s access to employment supports were particularly hard hit.26 In 2002, provincial and territorial governments asked the federal government for increased funding to meet the skills-development needs of Indigenous peoples, youth, older workers, social assistance recipients, and persons with disabilities.27

The federal Conservative government’s 2006 economic plan contained three key labour-market priorities that centred on meeting the demand for workers during the economic boom of the day. The federal government promised to increase the labour-market participation rate of traditionally under-represented groups (i.e., older Canadians, Indigenous people and Canadians with disabilities) as well as increase employer access to temporary foreign workers (see Immigration Policy and Foreign Workers below).28 The government also promised to reduce employer taxes in order to increase the money that employers have available to invest in training as well as make training more available to all Canadians.

The federal government’s 2008 announcement of six-year bilateral Labour Market Agreements with each provincial and territorial government was part of its efforts to increase the labour-market participation of traditionally under-represented groups (who typically could not access EI benefits). The federal government agreed to provide $500 million per year on top of existing provincial and territorial expenditures on labour-market training. These LMA funds were intended to fund training for unemployed workers who did not qualify for Part 2 Employment Insurance benefits as well as low-skilled workers who were employed. An additional $500 million was committed between 2009 and 2011 to address the needs of workers in communities particularly hard hit by the 2009 global economic downturn.29

Provincial and territorial governments delivered (or provided via contractors) LMA-funded services to approximately 360,000 Canadians annually, from 2008–14. Training-specific interventions included workplace skills development for workers requiring literacy or essential skills training, formal training or academic upgrading programs, and work-experience programs. The net effect of these interventions was to increase employment levels of participants from 44 per cent to 86 per cent. Some groups of workers continue to experience lower employment levels, including participants aged 55 to 64 (64 per cent), participants with disabilities (66 per cent), and Indigenous participants (68 per cent).30

Canada Job Fund Agreements

Despite the success of LMA programming at increasing and improving employment, the federal government radically altered the LMAs during renegotiation in 2014. In this process, LMAs were renamed Canada Job Fund Agreements (except in Québec, which kept its LMA).31 The focus of the Canada Job Fund Agreements (CJFAs) were clearly driven by concerns about a skills shortage:

There are too many jobs that go unfilled in Canada because employers cannot find workers with the right skills. Meanwhile, there are still too many Canadians looking for work. Training in Canada is not sufficiently aligned to the skills employers need, or to the jobs that are actually available.32

The flagship program of the CJFAs was the Canada Job Grant (CJG). Under the federal government’s proposed CJG, employers could spend up to $5,000 for training and seek matching funds at a 1:2 ratio (up to $10,000) from the government to offset training costs. The $300 million federal portion of the proposed CJG was to be funded by reallocating 60 per cent of former LMA funding to CJG. Practically speaking, this reallocation meant that provincial and territorial governments would lose $300 million in federal funding, which they relied upon to provide skills-development training. Further, provincial and territorial governments would also be expected to come up with an additional $300 million to fund their half of the matching grants. Whatever remained of the former LMA funding could be still be used by provinces and territories to fund employment services for those not covered by EI Part 2 benefits.

Provincial and territorial governments objected to this reallocation because it required them to either close or find new monies for existing LMA-funded training. Further, by linking funding to employer sponsorship, the expected (and, as illustrated in Box 3.2, the ultimate) effect of the CJG was to shift funding for training away from workers who were “far” from being labour-market ready and towards workers who were mostly likely already employed. This, in turn, would (and did) constrain the supply of skilled workers by focusing training funding on already trained workers.33

Critics of the CJG noted that there was no evidence of significant skills shortages and, indeed, the federal government’s own research found skills shortages only in fields requiring years of study; thus, these shortages could not be remedied through the short-term training CJG funded. Further, employers’ historical reluctance to invest in training meant that the CJG was likely to function primarily as a means to subsidize (i.e., reduce) existing employer investments in training, not spark additional investment in training.34

The CJG also represented a significant intrusion by the federal government into the realm of labour-market training after a lengthy transition towards provincial and territorial responsibility. Eventually, a six-year agreement was reached with each province and territory (except Québec) to implement CJG, after the federal government agreed to a gradual phase-in with matching dollars funded solely by federal money.35

In terms of access, control, and benefit, the CJG privileged the interests of employers. Employers determined which employees received what kind of training under the CJG, because employers made applications for the funding. Employers were the main beneficiaries of the CJG, receiving taxpayer-subsidized training for their employees. Workers may have benefitted from this training, if it led to more satisfying or remunerative work, with either their current employer or another employer in the future. The workers who received the most benefit from CJG were largely well-educated men who were already employed in skilled occupations and who didn’t identify as Indigenous, immigrant, or disabled. This inequitable distribution of CJG training broadly mirrors the distribution of other forms of training. Further, the CJG focused training dollars on workers who are essentially job ready, thereby disadvantaging Canadians with little prospect of immediate labour-force attachment.

Provincial and territorial governments continue to operate programs historically funded by LMA (although perhaps on a lesser scale). This programming tends to primarily benefit individual workers (who become more employable) and the state (which sees workers move into employment). While the employment rates of older workers, Indigenous workers, and workers with disabilities continue to lag behind the average, historically, LMA-funded training appears to provide greater benefits to these groups of workers than does the CJG.

At the time of writing, the federal Liberal government is negotiating a replacement for the CJFAs, along with the Labour Market Agreements for Persons with Disabilities (LMAPD), and the Targeted Initiative for Older Workers (TIOW). The new Workforce Development Agreements (WDAs) will provide approximately $722 million in funding annually, plus an additional $900 million (from 2017/18 to 2022/23) to PTs. (Currently, only Ontario has announced it has completed negotiations.) The WDAs are expected to allow provincial and territorial governments more flexibility in how funding is allocated by eliminating specific funding requirements associated with the Canada Job Grant and TIOW. Provinces and territories can continue to operate these programs or redeploy the funding associated with them in different ways.39 By giving PTs more flexibility in how they spend WDA funding, the federal government has shifted any political costs of program changes to the PTs. Some jurisdictions may, for example, desire to drop the Canada Job Grant program because, despite its popularity with employers, it does not help unemployed workers to attach to the labour market.

Training Programs for Indigenous Peoples in Canada

The federal government has long sought to increase employment levels among Indigenous peoples. This has included providing labour-market training and skills development. These training responsibilities were not devolved to provinces and territories subsequent to 1996 because the constitution allocates responsibility for “Indians and the lands reserved to Indians” to the federal government.40 In 2010, the federal government launched a five-year Skills and Partnership Fund (SPF) to provide $210 million in support for skills development, training, and employment among Indigenous people. The Aboriginal Skills and Employment Training Strategy (ASETS) followed SPF in 2011, essentially rebranding existing training programs. ASETS was designed to increase the employment of Indigenous people through the provision of skills development and training programs. ASETS-funded services are provided by 85 Indigenous-operated organizations across Canada. These programs are intended to target regional labour-market needs and are provided by or through Indigenous-operated organizations. Approximately $1.7 billion in funding was provided by the federal government and various Indigenous-operated organizations over five years.41

A 2015 evaluation of these programs noted significant increases in participants’ earnings and probability of employment. That said, the assessment flagged a number of challenges to the effectiveness of training programs. The lack of employment opportunities near isolated communities posed a barrier for many participants who were reluctant to leave their communities. The generally lower level of educational attainment among Indigenous peoples in Canada meant the training offered was often inadequate to match employer demands. Employment also often required significant cultural adjustments on the part of workers, which extended the need for training beyond job-specific technical skills. Where there were local employment opportunities, they were often in a single sector subject to market and seasonal fluctuations. And employers often simply declined to hire or provide work experience for Indigenous workers.42 Box 3.3 examines the effectiveness of short-term labour-market training for Indigenous peoples in Canada.

In 2018, the federal Liberal government announced that it would be replacing ASETS with the Indigenous Skills and Employment Training program (ISET). As of the summer of 2018, the program was still being developed and included a $2 billion commitment over five years. Key changes include the first increase in funding in 17 years to serve an additional 15,000 clients, longer-term agreements, and enhanced performance measurement. The program is also expected to better reflect the differing needs of First Nations, Inuit, Métis, and urban/non-affiliated Indigenous peoples.44

Provincial and Territorial Training Programs

As noted in Chapter 1, the constitution creates a shared responsibility for labour-market training policy. Federal jurisdiction is acknowledged in matters of the economy, including Employment Insurance. Education is an exclusively provincial preserve. While labour-market training likely falls outside of what framers of the British North America Act had in mind when they wrote about education, the Québec Court of Appeal has found it to be an area of provincial jurisdiction.45 That said, the federal government continues to exercise significant influence through conditional financial transfers, such as the 2013 transition from LMAs to the Canada Job Fund Agreements.

All provinces and territories fund programming designed to address specific training needs. Such programming is delivered through a combination of provincial and territorial PSE systems (see Chapter 2), private providers, and government-operated programs. As with the discussion of eligibility around LMDA-funded training above, the boundaries between federally and provincially/territorially funded training are often blurry and more a matter of whether training costs are billed to the Workforce Development Agreement or a provincial/territorial funding source.

A key area of provincial/territorial labour market training includes literacy and adult basic education (which is discussed at length in Chapter 5). A second area is labour-market training provided to social assistance recipients (see Box 3.4). Governments may also provide training to address specific, localized issues such as industry closures (e.g., the loss of jobs in coal-fired electrical generating plants in rural communities) or labour shortages (for instance, a lack of qualified teachers in remote and northern communities).

The province of Québec has a unique system of labour-market training. In 1997, Québec established the Commission des partenaires du marché du travail (Labour Market Partners Board), which brings together representatives from the business, labour, education, and community sectors to advise the minister of employment and social solidarity about meeting labour-market training needs. In addition to LMDA-funded training, Québec administers a unique workforce training levy program.

This levy on employers was introduced in 1995 to address concerns that Québec employers provided much less labour-market training than employers in other provinces. Québec’s levy requires all firms with payrolls in excess of $1 million to spend at least 1 per cent of revenue on training or remit the difference to the province to fund training-related research and projects.50 Training levies are designed to encourage employer investment in training at a low administrative cost to the state. France’s long-term training levy, for example, has generated a number of effects. Fewer French employees receive training, but training is longer and addresses a wider range of skills, and the return on training is higher when compared to the levy-less United Kingdom.51

The evidence about the effectiveness of Québec’s training levy is mixed. More than three-quarters of affected employers spend the required 1 per cent on training, although this varies by firm size. Some researchers report that job-related training rates rose after the levy was introduced, increasing from 20 per cent of workers in 1997 to 32 per cent in 2002 and thereby erasing the earlier interprovincial difference.52 Other research finds that Québec’s rate of on-the-job training continues to lag behind that of other provinces, particularly in workplaces with fewer than 20 workers. Where on-the-job training occurs in Québec, it results in a larger wage premium than elsewhere. Finally, Québec firms are more likely to rely upon external trainers than firms in other provinces.53

Québec’s unique system of workforce training, combined with the Stephen Harper government’s desire to make electoral headway in Québec, allowed Québec to opt out of the CJFA and instead receive a transfer of funds. This was justified because “the key principles behind the Canada Job Fund Agreements—greater employer involvement and employer investment in training—are already formally and legislatively entrenched in the Québec training system.”54 In terms of access, control, and benefit, Québec’s training levy incentivizes large employers to increase access to labour-market training. Yet employers retain significant control over which employees access training, and what training they take. As a result, employers are likely to be the primary beneficiary of this levy.

Immigration Policy and Foreign Workers

As we saw in Chapter 2, Canada has a long history of the federal government using immigration policy in order to increase the supply of workers with specific skills. During the mid- and late nineteenth century, the federal government facilitated the use of immigrant labourers for canal and railway construction.55 Foreign workers were (and remain) an important source of live-in caregivers. Canada has also relied upon migrant workers in agriculture.56 For example, Alberta continues to experience racialized waves of migrant agricultural workers that began in the late nineteenth century and has included migrant workers from Britain and central Canada, internees, prisoners of war, Polish veterans, Indigenous peoples, and Mexican Mennonites.

The federal Conservative government’s 2006 economic plan promised to increase employer access to temporary foreign workers.

Our immigration policies should be more closely aligned with our labour market needs . . . Particular attention should be given to skilled temporary foreign workers with Canadian work experience and foreign graduates from Canadian colleges and universities, as these groups are well placed to adapt quickly to the Canadian economy.57

As we saw in Chapter 1, expanding the supply of workers typically benefits employers by reducing labour costs. Canada currently operates three programs that bring temporary foreign workers to Canada:

1. The Seasonal Agricultural Worker Program (SAWP) brought approximately 14,000 temporary agricultural workers to Canada from Mexico and Carribean countries in 2015.
2. The Caregiver Program allowed approximately 8,300 live-in caregivers to be resident in Canada in 2015. These workers provide full-time care to children, seniors, or persons with disabilities and may eventually be eligible for permanent residency.
3. The Temporary Foreign Worker Program (TFWP) saw 37,750 temporary foreign workers (TFWs) resident in Canada in 2015 (down from a high of nearly 80,000 in 2013). Employers can recruit TFWs if no qualified Canadian citizens are available to perform the work.58

The TFWP is the largest of these programs. The explosive growth in the number of TFWs in Canada (shown in figure 3.1) is almost entirely due to changes in the TFWP. Until 2002, the TFWP was restricted to higher-skilled occupations. In 2002, the federal Liberal government extended the program to include lower-skilled workers. As set out in its 2006 economic plan, the federal Conservative government expanded the program by establishing a list of “occupations under pressure” for Alberta and British Columbia. This change made it easier for employers to acquire permission to hire TFWs, and TFW numbers rose rapidly thereafter.59 Further changes in 2012 saw the federal government dramatically reduce processing times for labour market opinion (LMO) applications, allow employers to lower TFW wages, and waive the LMO (now called labour market impact assessments) process altogether for American TFWs in seven high-demand construction occupations.60

There has been significant public concern about the exploitation of TFWs (see Boxes 3.5 and 6.1). These concerns as well as fear of job losses pressured then-employment minister Jason Kenney to radically alter his position on the TFWP.61 For example, in response to questions about why over 200 TFWs were hired by seafood processors in Prince Edward Island while hundreds of local fish plant workers were collecting EI (something the TFWP should prohibit), Kenney admitted employers often prefer TFWs because they increase employers’ profitability.

When people come in from abroad on a work permit, their immigration status is conditional on their work, so often those folks that come in, the managers know they’re going to show up every day for work so there’s a greater degree of reliability and in many respects, employers have begun to see it as a more efficient workforce, but that is not what it’s there for. It’s only there if it’s clear that no Canadians are available, and this evidence that we’ve released today demonstrates there are Canadians available in those jobs, in those regions.62

After defending the program as necessary for nearly a decade, Kenney suggested that employers facing worker shortages should increase wages and benefits as well as improve working conditions. The 2014 changes to the program included looser rules regulating higher-skilled TFWs and greater restrictions on lower-skilled TFWs, including phased-in quotas for employers and a four-year residency limit for TFWs (this residency limit was revoked by the federal Liberal government in 2016).

In addition to the three streams of the TFWP, there are four other avenues by which foreign nationals can work in Canada:

1. The International Experience Canada program entails 32 reciprocal youth-mobility agreements that provide short-term work and travel permits to people aged 18 to 35.
2. The International Student Program provides foreign students and PSE graduates with work permits.
3. Provincial Nominee Programs (PNP) vary by jurisdiction but provide a way for TFWs to become permanent residents.
4. Canada has signed forty-one “free trade” agreements with other governments that include reciprocal labour-mobility rights for certain classes of workers.

Collectively, these programs are called international mobility programs (IMPs). They differ from the various TFWP streams in that workers can receive open work permits with no assessment of the labour-market demand for their services or whether the jobs they hold are related to their qualifications. IMPs are also bilateral (or multilateral) agreements, the terms of which, unlike the TFWP, cannot be altered unilaterally by Canada.68

As shown in figure 3.1, there has been a steady climb in the number of migrant workers entering Canada under the TFW and IMP programs. In 2015, there were 60,138 TFWs in Canada, down from a high of 104,125 in 2013. The number of TFW began increasing rapidly following the 2006 changes to the TFW program. The number of foreign workers in Canada as IMPs began a steady increase at about the same time, peaking at 259,339 in 2014. This pattern reflects, in part, the increasing number of bilateral trade agreements signed by the Harper government beginning in 2006. Overall, there are approximately 354,000 migrant workers legally employed in Canada. There is no concrete data about the number of undocumented (non-status or illegal) foreign workers in Canada.69

Figure 3.1  Migrant workers in Canada, 1996–2015. (Data from Government of Canada, “Facts and Figures 2015.”)

While the TFWP gets the lion’s share of media attention, there has been explosive growth in the numbers of workers entering Canada under IMPs. At present, TFWs account for only one-third of migrant foreign workers into Canada.70 Governments have, in part, justified increasing employer access to employ foreign workers as a solution to a skills shortage.71 In this view, migrant worker policy acts as a substitute for labour-market training.

There is some question about whether migrant workers are necessary to address a skills shortage. Setting aside the question of whether specific labour shortages reflect an absolute shortage of workers (i.e., there are no workers available) or a relative shortage (i.e., there are no workers prepared to work for the offered terms and conditions of employment), the evidence suggests that most TFWs work in lower-skilled occupations. Table 3.1 groups 2015 migrant worker numbers by skill level to demonstrate that 61 per cent of TFWs are low-skill workers.72

Table 3.1  Migrant workers by skill level, 2015.

Source: Government of Canada, “Facts and Figures 2015: Immigration Overview - Temporary Residents - Annual IRCC Updates.” Ottawa: Government of Canada, 2017.

Canada’s immigration policy is often used to supplement (or as a substitute for) labour-market training. Consequently, it is useful to consider how it affects issues of access and benefit. As with the Canada Job Grant, employers (through their hiring decisions) control which workers can access Canadian job opportunities. These opportunities have been unevenly distributed among workers. For example, while the majority of TFWs and IMPs are men, there are clearly female preserves (such as the Caregiver program) and male preserves (e.g., employment in the construction industry). Migrant workers also come from a small number of nations. More than half of IMPs are from India, the United States, China, France, and Australia, while more than one-third of TFWs are from the Philippines.73

The growth in the number of TFWs is sometimes framed as a shift in Canada’s immigration policy, away from multicultural citizenship and towards partial citizenship. In partial citizenship, migrants are granted access to certain aspects of citizenship (e.g., partial access to the labour market) but excluded from other legal, political, and economic rights.74 Other critics note that the TFW and IMP programs increasingly shift authority over migration from the state to employers. To be fair, employers’ exercise this power within a policy framework created by the federal government (TFW) or negotiated with other states (IMP).

The benefits of labour migration are uneven and hard to quantify. Migrant workers are obvious beneficiaries, through the provision of opportunities to work. But the structure of these opportunities often makes such workers vulnerable to exploitation. To the degree that employer access to migrant workers increases the supply of labour (thereby driving down wages and lessening workers’ labour market power), employer use of migrant workers may disadvantage Canadian workers. Conversely, the availability of low-cost and compliant migrant workers advantages employers.

The state is placed in a conflicted position. To the degree that migrant worker programs address real labour shortages, they help the state to ensure the production process continues unimpeded. But, the threat (real or perceived) posed by migrant workers to the job security of Canadians, as well as the frequently poor treatment of these workers, undermines the legitimacy of the state when it operates such programs. In this way, migrant worker programs operate contrary to the goal of social reproduction. Maintaining legitimacy with the electorate is important and helps explain the 2014 about-face on the TFW program by the federal Conservative government. The Conservative government also simply stopped publishing information about the number of TFWs, perhaps as way to reduce public concern over their numbers.

Conclusion

While there are differences between (and within!) governments around labour-market training policy, several broad trends are evident. First, government policies and programs are increasingly focused on (re)attaching workers to the labour market as quickly as possible. To this end, Employment Insurance has been altered to reduce the proportion of unemployed workers who are eligible to receive financial support or training. Workers unable to access EI face significant pressure to take whatever jobs are available, regardless of whether they find the jobs desirable. Those workers who are eligible for EI benefits also face intensified pressure to take whatever jobs become available or risk having their benefits terminated. Funded training is short term and must clearly increase claimants’ employability. Much like recent changes to Canada’s immigration policies that increase employers’ access to foreign workers, these EI changes are designed to increase the labour supply. And, because workers are less able to negotiate wages and working condition improvements in loose labour markets, this policy tends benefit employers.

Second, government-funded labour-market training increasingly benefits workers who are already employed or are almost “job ready.” LMDA-funded training is available only to those who have been recently employed. And most of the funding for the CJFAs has been directed to men who already have PSE credentials and who are employed in high-skill jobs. Employers trained (and subsequently hired) virtually no unemployed workers during the first two years of CJG funding, despite this being a key goal of the program. The funding for the CJG was secured by cannibalizing LMA-funded programs, which are aimed at providing training to workers who are further from the labour market, including Indigenous peoples, social assistance recipients, and persons with disabilities. This policy direction is consistent with (re)attaching workers to the labour market as quickly as possible. It also tends to reinforce existing patterns of advantage and disadvantage in the labour market.

Third, employers are being granted increasing control over who accesses what kind of government-funded training. This is most evident in the structure of the CJG, where employers select which workers undertake what kind of training. While governments establish broad criteria for matching grants, these criteria largely cede control to employers. Québec’s training levy also leaves training decisions to employers. The rules around TFWs and IMPs allow employers to choose between training Canadian workers for jobs and seeking to hire migrant workers to do a job. As figure 3.1 indicates, employers are increasingly choosing to hire migrant workers. This trend externalizes training costs onto other jurisdictions.

These trends clearly indicate that Canadian governments—and particularly the federal government—have adopted a supply-side approach to labour-market training. Unemployed Canadians are pressured to return to (any) work as fast as possible, and training funding is allocated to workers in or close to the labour market. While there are rhetorical commitments to improving the labour-market prospects of workers who are further from employability, funding has been shifted away from programs that achieve this goal. (We’ll explore basic skills training in Chapter 5.) Further, federal immigration policy alleviates employers’ need to train and hire these workers by making migrant workers available.

There is notably less federal commitment to the social-reproduction process. EI financial and training benefits buffer the effect of unemployment for some workers. The most significant federal efforts centre on framing training as a way for workers to improve their lot in life. This skills-shortage rhetoric shifts responsibility for unemployment away from employers and onto workers and obviates the need for political, social, or economic reform. Provincial and territorial governments—which are constitutionally responsible for social assistance and often bear the brunt of criticism about unemployment—have shown some willingness to resist this framing (e.g., pushing back against the CJFA) but must balance their greater interest in social reproduction against the allure of additional federal funding.

Notes

1    Mas, “Jason Kenney: Canada Job Grant Will Lead to Guaranteed Jobs.”

2    Albo, “What Comes Next?”

3    Alberta Works, “Employment and Training Programs and Services.”

4    Finkel, Social Policy and Practice in Canada.

5    Employment and Social Development Canada, “EI Regular Benefits—Overview.”

6    There are certain exceptions to this maximum. During the recent downturn, long-tenured workers in regions of high unemployment qualified for additional weeks of benefits.

7    Government of Canada, “Labour Market Development Agreement.”

8    Albo, “What Comes Next?”

9    McBride, “The Political Economy of Training in Canada.”

10  Lönnroth, “Active Labour Market Policies.”

11  Organisation for Economic Cooperation and Development, OECD Jobs Study.

12  Meager, “The Role of Training and Skills Development.”

13  Card, Kluve, and Weber, “Active Labour Market Policy Evaluations.”

14  Berry, “Quantity over Quality,” 594.

15  Jones, “The Effectiveness of Training.”

16  Kluve, “The Effectiveness of European Active Labor Market Policy.”

17  Brisson, “Employment Insurance and Active Labour Market Policies.”

18  Osberg, “Canada’s Declining Social Safety Net.”

19  Wood and Hayes, “Labour Market Agreements.”

20  Porter, “Austerity, Social Program Restructuring, and the Erosion of Democracy.”

21  Gray and Busby, “Unequal Access.”

22  Critoph, “Who Wins, Who Loses.”

23  EI premium payers can also access Part 2 benefits if they have accessed parental leave benefits in the last sixty months or regular Part 1 benefits in the past thirty-six months.

24  Critoph, “Who Wins, Who Loses.”

25  Government of Canada, “Governments of Canada and Ontario Reach Agreement.”

26  Ibid.

27  Provincial and Territorial Labour Market Ministers, Skills Investments for All Canadians.

28  Department of Finance Canada, “Advantage Canada,” 48.

29  Wood, “Hollowing out the Middle.”

30  Employment and Social Development Canada, “Evaluation of Labour Market Agreements.”

31  Wood and Hayes, “Labour Market Agreements.”

32  Government of Canada, “The New Canada Job Grant,” 2.

33  Hall, “Ottawa Digging In.”

34  Mendelson and Zon, “The Training Wheels Are Off.”

35  Mas, “Canada Job Grant Won’t Be in Place.”

36  Goss Gilroy Inc., “Canada Job Grant Year 2 Review.”

37  Ibid., 51.

38  Ibid., 65–66.

39  Government of Canada, “Workforce Development Agreements.”

40  Wood, “From Pathways to ‘ASETS.’”

41  Employment and Social Development Canada, “Evaluation of the Aboriginal Skills and Employment Training Strategy.”

42  Ibid.

43  MacKinnon, Decolonizing Employment.

44  Government of Canada, “Budget 2018.”

45  Magali, “Federal-Provincial Overlap and Civil Servants.”

46  Haddow and Klassen, Partisanship, Globalization, and Canadian Labour Market Policy.

47  Finkel, Social Policy and Practice in Canada.

48  Ontario Ministry of Community and Social Services, “Ontario Works.”

49  McBride, Working? Employment Policy in Canada.

50  Bélanger and Robitaille, Portrait of Work-Related Learning in Québec.

51  Greenhalgh, “Does an Employer Training Levy Work?”

52  Peters, Results of the 2003 Adult Education and Training Survey.

53  Gagnon and Smith, “The Effect of a Training Levy.”

54  Government of Canada and Government of Québec, “Preamble.”

55  Knowles, Strangers at our Gates.

56  Basok, Tortillas and Tomatoes.

57  Department of Finance, “Advantage Canada.”

58  Government of Canada, “Facts and Figures 2015.”

59  Fudge and MacPhail, “The Temporary Foreign Worker Program in Canada.”

60  Foster and Barnetson, “Exporting Oil, Importing Labour and Weakening Democracy.”

61  Broadbent Institute, “Harper Government ‘Accelerated’ Unemployment.”

62  Wright, “Q&A: Employment Minister Jason Kenney.”

63  Hughes, “Costly Benefits and Gendered Costs.”

64  Taylor, Foster, and Cambre, “Temporary Foreign Workers,” 7.

65  Ibid.

66  Preibisch, “BC-Grown.”

67  Foster and Taylor, “In the Shadows.”

68  Mertins-Kirkwood, “The Hidden Growth.”

69  Government of Canada, “Facts and Figures 2015.”

70  Mertins-Kirkwood, “The Hidden Growth.”

71  Barnetson and Foster, “The Political Justification of Migrant Workers.”

72  Government of Canada, “Facts and Figures 2015.”

73  Ibid.

74  Vosko, Managing the Margins.