Temporary Foreign Worker Program Can Be Costlier for Small, Independent Business

The Canadian temporary foreign workers’ program was recently in the news again.

As you may recall, the Conservative government moved to make changes earlier this year in hopes of reducing the avalanche of applications and temporary workers in Canada. But as Carol Goar pointed out in an article in the Toronto Star, the numbers accepted into Canada between January to June 2013 actually increased by 5%, when compared to the same period in 2012.

While some of these arrivals may include those applications submitted prior to the change but fulfilled this calendar year or represent an outlier in a transitional period, Dan Kelly, President and CEO of the Canadian Federation of Independent Business continues to lobby against tighter regulations, as they may negatively impact his membership base.

Mr. Kelly offers sober thought for those SMBs operating within the western provinces’ robust economy. Faced with low unemployment and open positions unfilled for a myriad of reasons, wages have been driven higher by the oil and gas industry, and the businesses servicing them. In being forced to pay at times exorbitant wages to attract Canadians to low and high skill jobs in our western provinces, the labour component of a company’s balance sheet challenges the bottom line of any business, let alone small and independent business.

Temporary foreign workers, and the previous allowance for a 15% discount on wages, helped fill these available jobs, while propping up profits.

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I Accept The Transit Challenge

Anne Golden, leader of Premier Wynne’s Transit Panel, commenced a dialogue with the Ontario public on acceptable means of funding the transit expansion so desperately needed in Ontario.

Why this dialogue wasn’t nurtured nor welcome by Metrolinx last year is fodder for another discussion. I took Ms. Golden’s offer of accepting ideas through email or joining the discussion on #TransitPanel to heart.

Based on the premise that cost should be shared by all parties to an extent and that business’ gains are crucial to the future prosperity of the region, I offer the following ideas, pending further cost/benefit analysis. Pre-suppose that all revenues gained from the following are committed to fund transit and relevant infrastructure projects:

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Life Just Refreshed Joe Fresh

The Canadian retail landscape was transformed today, with this mornings’ surprise announcement that Loblaws is acquring Shopper’s Drug Mart. Pending Industry Canada and Shopper’s shareholders’ approval.

Brilliant. Focused. Long-term refresh.

Brilliant? Loblaws realized the challenge of continuing to compete within a food segment that delivers single digit margins. And that’s before Target rolls out its stores nationally. Loblaws tried electronics in its general merchandise section, but is essentially a non-player at this point. The Home section expanded then contracted to a more margin-friendly shelf and retail space within its various banners.

Then Loblaws turned its focus to the beauty and drug segments, where a retailer can enjoy 35+% margins, and that’s not including private label brands. Presto, Joe Fresh appeared in beauty, extending the brand beyond the apparel that captured Canadians imagination and share of wallet.

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Transit, Premier Wynne’s Hot Potato

Every political figure relishes a defining issue. One that affords them an opportunity to demonstrate leadership in creating and implementing a transformative policy or impression that ripples across a populace or generation.

For Ontario Premier Kathleen Wynne, transit might be that policy. Anyone that drives anywhere within the GTA-Hamilton corridor is familiar with the crawl. Business claims congestion costs local industries $6 billion annually. Yet all politicians of every stripe at every level for years chose to turn a deaf ear, playing their political capital elsewhere.

Not Premier Wynne. No, she’s contemplating taking the transit issue all the way to an election. Without any support from either opposing party, nor the federal government. And to date, the majority of the voters.

And how will this revenue-challenged province pay for all these transit projects. Earlier this week, Metrolinx released its recommendations as to which revenue tools it suggests Premier Wynne incorporate:

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Outsourced Manufacturing and Corporate Social Responsibility

Corporate social responsibility within the framework of outsourced manufacturing of any finished goods is possible.

Yes, recent history shines a damning light on the desperate plight of the world’d poorest who provide cheap labour for factories producing many of our branded consumer goods: El Salvador and the Kathie-Lee Gifford clothing line during the 1980’s provided our first peek; the sweater factory collapse in Dhaka in 2005; the Foxconn employee suicides protesting working conditions in 2010, & their association with Apple; the Pakistan factory fire in 2012 and more recently, the Bangladesh Rana Plaza facility collapse that implicated Canada’s Loblaws/Joe Fresh brand.

But the alarm, shock and call-to-action erupting from consumers may provide sufficient impetus for citizens to become informed as to the true human and ecological cost of cheap apparel and goods, and for brands to assume a leadership role in improving working and living conditions within those plants, rather than running away, like Disney did with its recent announcement.
Sunbeams Shifts Manufacturing to Asia:

Around the time I headed up Sunbeam’s Appliance business in Canada in the early 2000’s, the consumer goods industry underwent a seismic shift. The market transitioned from a brand-driven delivery of goods that served consumers needs and wants, to a marketplace model where the national or global retailers were in the driver’s seat.

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A Vantage Point on Temporary Foreign Worker Program

The temporary foreign worker program in Canada is a much-discussed topic today. Reactions from Canadians at the loss of Canadian jobs to these temporary workers and out-sourcing run from anger, disbelief, loss of trust, affirmation of suspicions and fear of evisceration of the middle class, to support for making these workers permanent residents.

Historically, this program was created in support of agribusiness and delivery of home healthcare for families with elderly parents, family or friends. But in the mid-90’s, the Conservative government super-sized the TFW program to allow any business to hire skilled TFWs if they were unable to fill those roles with Canadians.

As the RBC tale reverberated, we learned of Canadian corporations abusing this program to hire food service personnel, hotel workers and IT staff for which there are plenty of duly qualified Canadians. The Conservatives, caught in this tailspin, expressed shock and dismay. A rewrite of the program and process was promised by PM Harper in short order.

Now, in some instances, the need for a temporary foreign worker is very real. But, be it lesser skilled or high skilled, in business or for personal health reasons, it plays as wage suppression and, at times, labour abuse. On some level, one can understand it from the vantage point of a small business or average family that cannot afford to pay the wages of an equivalent Canadian worker, but not so when it is a bank raking in billions in profits.

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Tax Havens and Ethical Ethos

Business, in its zeal to satisfy shareholders’ thirst for profits, dividends and share value, has historically used tax havens for asset protection and tax avoidance. Countries such as Cayman Islands, Switzerland, Cyprus, Malta, Maldives, Luxemborg, a healthy portion of the Caribbean Islands, and Panama provide the tax shelters for business and the extremely wealthy.

The general public was none the wiser as to which companies did so, unless they were active shareholders. Others may have had exposure, but no real oversight or knowledge, through their company pension programs, investment advisers, CPP/QPP, RRSPs, or 401Ks. For most, annual portfolio increases or decreases were the extent of their concerns.

But something changed when, in the midst of the digital age, the 2008 banking crisis caused an equity meltdown, touching everyone everywhere. Suddenly, the airwaves, screens, blogs, twitter and papers were awash with financial, housing, government, banking and corporate (dis)information speaking to culprits and facilitators.

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