Canadian bosses love hiring foreign workers
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Nov 26, 2025, 8:50:11 PM (6 days ago) Nov 26
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Vancouver Sun 26 Nov 2025
Canadian bosses love hiring foreign workers
Employees from low-wage countries more dependable and less demanding
DOUGLAS TODD
Employees from low-wage countries more dependable and less demanding
DOUGLAS TODD
x.com/douglastodd
Rarely a week goes by without a small or large Canadian company declaring how desperate it is to hire foreign guest workers.
The country's “labour shortage” is brutal, they say. Business survival is impossible without willing workers from offshore, complain the owners of hotels, fast-food restaurants, security firms, supermarket chains and construction companies.
While's it's true that in some cases Canadian corporations struggle to find workers willing to plod away for low wages, especially in the agricultural sector, there is also no doubt many of Canada's roughly three million highly motivated foreign guest workers toil for lower wages and demand fewer benefits than domestic workers.
A revealing study by three Canadian economists explains exactly why foreign guest workers are preferred hires by so many companies.
“Temporary foreign workers work longer hours, are less absent and are less likely to be laid off than domestic workers,” say the professors of economics, Pierre Brochu, Till Gross and Christopher Worswick, in their peer-reviewed analysis
Foreign workers put out more effort for lower earnings than domestic employees, the scholars found.
One big reason they'll grind away for less is that most come from countries with extremely low wages. A London School of Economics study found temporary migrants from the 11 largest developing countries — such as India, the Philippines and Mexico — can earn more than 400 per cent higher wages than in their country of origin by snagging even a lowskill job in North America.
“Our model provides a possible explanation for why firms might prefer to hire temporary foreign workers, even when domestic workers are available and paid the same wage,” say the Canadian scholars.
Their conclusion should concern all workers: “We identify the unintended [sic] consequences of a TFW (temporary foreign worker) program: to lower wages and employment for domestic workers.”
Even though Canada isn't the only Western country opening its borders wider to guest workers, the Liberals have done so with more gusto than almost anywhere else. The proportion of foreign workers in Canada has tripled since the Liberals were first elected. Temporary residents now account for 7.1 per cent of the population, compared with 2.3 per cent in 2013. Their proportion is highest in B.C. — at 9.1 per cent.
Even though the TFW program draws most media coverage, it accounts for only a small portion of the country's guest workers. Most are in Canada under the little-known International Mobility Program (IMP), or here as international students, most of whom are allowed to hold jobs in Canada for at least three years after they graduate.
In their 45-page analysis published in the Canadian Journal of Economics, the three economists come up with hard numbers to back up warnings from many others that the increase in guest workers has led to lower wages for many in Canada, particularly those in the private sector.
Canadians' standard of living isn't significantly rising in large part because companies are relying heavily on guest workers, says David Williams of the Business Council of B.C.
The OECD, a club of 37 mostly rich nations, projects that Canada will have the lowest growth in GDP per capita over the next four decades, he said. That happens when bosses rely on paying low wages to offshore workers, rather than innovating and increasing productivity.
University of Waterloo labour economist Mikal Skuterud, Ontario analyst Ben Rabidoux and Pierre Fortin, past-president of the Canadian Economics Association, are among the
The three economists come up with hard numbers to back up warnings ... that the increase in guest workers has led to lower wages for many in Canada, particularly those in the private sector.
many who ring alarm bells when corporations and lobby groups like the Century Initiative, not to mention politicians, claim the country faces labour shortages — when government statistics make clear that's not the case.
What's worse, bad actors often take advantage of Ottawa's openness to low-skill guest workers. Even Ottawa has admitted some employers exploit labourers.
“Particularly under Justin Trudeau's leadership, Canadian companies found it easier and more convenient to hire foreign workers since they were a cheap, obedient labour pool eager to work under terms and conditions set by their employers,” said Shinder Purewal, a political scientist at Kwantlen Polytechnic University.
“For companies such as Canadian Tire (which has been fined for mistreating offshore hires) foreign workers are often viewed as affordable and dependable labour, who are less likely to demand or advocate for the same labour standards expected by Canadian workers.” Too many bosses have engaged in criminal activity, Purewal said. As reported by Postmedia News and other media outlets, such employers arrange for would-be migrants to pay them tens of thousands of dollars to fill out a fake labour market impact assessment (LMIA), which the employer uses to convince immigration officials that a suitable domestic worker isn't available.
Many migrants go along with the subterfuge because “LMIA has become a ticket for low-skill temporary workers to seek permanent residency,” said Purewal, speaking of the 528,000 permanent resident spots that Prime Minister Mark Carney continues to make available each year.
The LMIA program for lowskilled workers had become so abused, Purewal said, that Ottawa cancelled it in March for regions with unemployment rates above six per cent.
Skuterud, who frequently advises Parliament on labour economics, told the C.D. Howe Institute that guest worker programs need drastic reform.
The way forward, Skuterud said, is for Ottawa to stop tying migration policy so closely to temporary fluctuations in the labour market — and to start ignoring the often-exaggerated claims of shortages made by some companies and lobby groups.
Guest worker programs need more transparency, plus a renewed focus on skilled labour, Skuterud said.
He recommends phasing out “low-skill streams, including in agriculture and caregiving, over three to five years.”
It might sound dull, but Skuterud is right in saying Ottawa's migration policies need to be steady, predictable, very long term — and focused on the needs of all Canadians.
“This horizon gives viable businesses time to make productivity-enhancing training and technological investments. (That will) reduce reliance on low-wage foreign labour, while supporting wage growth and productivity gains in the domestic workforce.”
Rarely a week goes by without a small or large Canadian company declaring how desperate it is to hire foreign guest workers.
The country's “labour shortage” is brutal, they say. Business survival is impossible without willing workers from offshore, complain the owners of hotels, fast-food restaurants, security firms, supermarket chains and construction companies.
While's it's true that in some cases Canadian corporations struggle to find workers willing to plod away for low wages, especially in the agricultural sector, there is also no doubt many of Canada's roughly three million highly motivated foreign guest workers toil for lower wages and demand fewer benefits than domestic workers.
A revealing study by three Canadian economists explains exactly why foreign guest workers are preferred hires by so many companies.
“Temporary foreign workers work longer hours, are less absent and are less likely to be laid off than domestic workers,” say the professors of economics, Pierre Brochu, Till Gross and Christopher Worswick, in their peer-reviewed analysis
Foreign workers put out more effort for lower earnings than domestic employees, the scholars found.
One big reason they'll grind away for less is that most come from countries with extremely low wages. A London School of Economics study found temporary migrants from the 11 largest developing countries — such as India, the Philippines and Mexico — can earn more than 400 per cent higher wages than in their country of origin by snagging even a lowskill job in North America.
“Our model provides a possible explanation for why firms might prefer to hire temporary foreign workers, even when domestic workers are available and paid the same wage,” say the Canadian scholars.
Their conclusion should concern all workers: “We identify the unintended [sic] consequences of a TFW (temporary foreign worker) program: to lower wages and employment for domestic workers.”
Even though Canada isn't the only Western country opening its borders wider to guest workers, the Liberals have done so with more gusto than almost anywhere else. The proportion of foreign workers in Canada has tripled since the Liberals were first elected. Temporary residents now account for 7.1 per cent of the population, compared with 2.3 per cent in 2013. Their proportion is highest in B.C. — at 9.1 per cent.
Even though the TFW program draws most media coverage, it accounts for only a small portion of the country's guest workers. Most are in Canada under the little-known International Mobility Program (IMP), or here as international students, most of whom are allowed to hold jobs in Canada for at least three years after they graduate.
In their 45-page analysis published in the Canadian Journal of Economics, the three economists come up with hard numbers to back up warnings from many others that the increase in guest workers has led to lower wages for many in Canada, particularly those in the private sector.
Canadians' standard of living isn't significantly rising in large part because companies are relying heavily on guest workers, says David Williams of the Business Council of B.C.
The OECD, a club of 37 mostly rich nations, projects that Canada will have the lowest growth in GDP per capita over the next four decades, he said. That happens when bosses rely on paying low wages to offshore workers, rather than innovating and increasing productivity.
University of Waterloo labour economist Mikal Skuterud, Ontario analyst Ben Rabidoux and Pierre Fortin, past-president of the Canadian Economics Association, are among the
The three economists come up with hard numbers to back up warnings ... that the increase in guest workers has led to lower wages for many in Canada, particularly those in the private sector.
many who ring alarm bells when corporations and lobby groups like the Century Initiative, not to mention politicians, claim the country faces labour shortages — when government statistics make clear that's not the case.
What's worse, bad actors often take advantage of Ottawa's openness to low-skill guest workers. Even Ottawa has admitted some employers exploit labourers.
“Particularly under Justin Trudeau's leadership, Canadian companies found it easier and more convenient to hire foreign workers since they were a cheap, obedient labour pool eager to work under terms and conditions set by their employers,” said Shinder Purewal, a political scientist at Kwantlen Polytechnic University.
“For companies such as Canadian Tire (which has been fined for mistreating offshore hires) foreign workers are often viewed as affordable and dependable labour, who are less likely to demand or advocate for the same labour standards expected by Canadian workers.” Too many bosses have engaged in criminal activity, Purewal said. As reported by Postmedia News and other media outlets, such employers arrange for would-be migrants to pay them tens of thousands of dollars to fill out a fake labour market impact assessment (LMIA), which the employer uses to convince immigration officials that a suitable domestic worker isn't available.
Many migrants go along with the subterfuge because “LMIA has become a ticket for low-skill temporary workers to seek permanent residency,” said Purewal, speaking of the 528,000 permanent resident spots that Prime Minister Mark Carney continues to make available each year.
The LMIA program for lowskilled workers had become so abused, Purewal said, that Ottawa cancelled it in March for regions with unemployment rates above six per cent.
Skuterud, who frequently advises Parliament on labour economics, told the C.D. Howe Institute that guest worker programs need drastic reform.
The way forward, Skuterud said, is for Ottawa to stop tying migration policy so closely to temporary fluctuations in the labour market — and to start ignoring the often-exaggerated claims of shortages made by some companies and lobby groups.
Guest worker programs need more transparency, plus a renewed focus on skilled labour, Skuterud said.
He recommends phasing out “low-skill streams, including in agriculture and caregiving, over three to five years.”
It might sound dull, but Skuterud is right in saying Ottawa's migration policies need to be steady, predictable, very long term — and focused on the needs of all Canadians.
“This horizon gives viable businesses time to make productivity-enhancing training and technological investments. (That will) reduce reliance on low-wage foreign labour, while supporting wage growth and productivity gains in the domestic workforce.”
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