Foreign worker issue was damaging fragile Conservative coalition

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How do we explain the dramatic about-face by Employment Minister Jason Kenney on the Temporary Foreign Worker program? After years of extolling the program's virtues, invoking dire fears of a labour shortage, Mr. Kenney suddenly slammed the door in the face of the program's biggest user: the hospitality industry.

It's hard to believe his mind was changed by mere statistics. For sure, evidence has mounted for years the program was out of control. Migrant employment rose 140 per cent between 2005 and 2012 (latest data available). One in every five net new paid jobs created in Canada between 2007 and 2012 was filled by a migrant worker -- revealing a startling reliance on what was supposed to be a "last resort" program. Even the business-friendly C.D. Howe Institute confirmed the program has pushed up unemployment, even in Alberta.

This evidence has been around for years -- as have anecdotes about employers hiring migrants to do jobs Canadians can clearly perform. The hospitality sector alone had 45,000 guest workers on the roll by 2012, with migrants capturing 40 percent of net new positions since 2009. How many jobs are there in hotels and restaurants that Canadians truly cannot perform? Almost none -- and the government has always known that.

A more convincing explanation for Mr. Kenney's sudden change of heart was the damage the issue was doing to the government's political base. Remember, the successful Conservative coalition assembled by Stephen Harper has always encompassed an uneasy mix of social and economic conservatives.

Economic conservatives (represented most vociferously by the small business lobby) supported the TFW program as an effective way to reduce labour costs. It's not that Canadians can't do the work. And there are certainly plenty of unemployed Canadians to fill available positions (never mind the Kijiji data). But desperate foreign migrants, lacking the full legal protections afforded to Canadians, will do the work cheaper and more compliantly -- motivated by the grim reality that if they lose their job, their very status in Canada is in jeopardy.

Most social conservatives, on the other hand, are skeptical. There remains a sizeable anti-immigrant streak among small-c conservatives. But you don't have to be xenophobic to be angry about employers who displace Canadians in favour of more desperate migrants. And companies who do precisely that are hardly "abusing" the program (as Mr. Kenney now claims): the whole policy exists to help employers meet their labour requirements more cheaply and reliably.

Many middle-class Canadians know their children need fast food jobs, given the lousy state of the youth job market. To have even those jobs placed out of reach by an immigration strategy aimed explicitly at suppressing wages, fuels resentment that cuts across party lines. That's what Conservatives sensed, and so Mr. Kenney acted.

The controversy, and the government's makeshift solution, are reminiscent of another occasion when economic conservatives and social conservatives collided. For years, foreign corporations took over many Canadian resource companies. Economic conservatives saw this as legitimate, even desirable. But when state-owned companies from China and other Asian countries tried to get in on the action in 2012, small-c conservatives in Alberta became alarmed. To them, the prospect of Alberta's oil coming under the control of Red China was appalling -- and their MPs heard about it.

So in late 2012 the Prime Minister announced an arbitrary new rule: state-owned takeovers of bitumen companies would henceforth be prohibited (except for the two on the table, which he approved). Other takeovers of bitumen were OK, as were state-owned takeovers of other assets. This bizarre, closely targeted policy was aimed at keeping the peace between potentially warring factions of the grand Conservative coalition.

Mr. Kenney's patchwork measure is similarly motived, and equally arbitrary: there is no economic rationale for limiting the moratorium to the restaurant industry, only a political rationale. Indeed, even as he announced the moratorium, Mr. Kenney energetically defended the whole TFW program. But even a politician as talented as Mr. Kenney can't simultaneously support and oppose a policy for very long.

Of course, there's a principled solution to Mr. Kenney's TFW dilemma, advocated nicely in a recent column by The Globe's Doug Saunders: increase permanent immigration, and provide immigrants the same rights the rest of us enjoy. But that wouldn't win favour from either of the disparate Conservative constituencies: business lobbyists who want cheap labour, and social conservatives who want less immigration. Which is why it won't happen.

Jim Stanford is an economist with Unifor. A version of this commentary was originally published in The Globe and Mail

Photo: mostlyconservative/flickr

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