'Temporary workers suppress Canadian wages': Harrison Faulkner DEBATES Dan Kelly
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Summary
In this episode, Dan Kelly, CEO of the Canadian Federation of Independent Businesses (CFIB), joins me to talk about immigration and the temporary foreign worker program (TFW) in Canada. We talk about the benefits of bringing in temporary foreign workers and international students into the country, and the drawbacks of limiting immigration.
Transcript
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Temporary foreign workers suppress the wages of Canadians if they're willing to work with less
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rights, you're willing to take a lower wage, that will put downward pressure on wages. Do you not
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agree with that? I don't know. Look, unions put that argument forward. Unions that are trying to
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protect the Canadian workforce. Do you think that immigration has played a role, the rapid rise in
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our population has played a role in the housing crisis faced across the country? I do. I do think
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that there is some evidence that we are, I think it could actually be helpful for the housing side
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if we were bringing immigrants to actually help us solve the housing crisis. What would be too much
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immigration in your opinion, Dan? Immigration is one of the most pressing and politically
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consequential debates happening in our country right now. You can find thousands of articles and
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videos online denouncing Justin Trudeau's mass immigration agenda or the same amount of content
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online promoting the immigration scheme of Justin Trudeau as the solution to Canada's economy.
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However, rarely is there an opportunity to have a thoughtful debate on this critical question,
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but that's what we intend to do right now. Joining me on the Faulkner show is Dan Kelly,
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the CEO of the Canadian Federation of Independent Businesses, a lobbying organization that represents
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small and medium-sized businesses in Canada. Kelly and the CFIB are advocates of immigration into Canada
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as a way to solve the labor shortage in this country. Now, that is not to say that they think
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everything is perfect with the system, but it is certainly to say that they do believe the
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international student program and the TFW program are forces for good in this country and that they
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oppose the federal government's recent decision to put a cap on the number of student visas and TFWs
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coming into the country. Well, with that out of the way, let's get into it. Dan, thank you so much for
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coming on. Happy to be with you. So, you've written in numerous articles and you've had numerous
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social media posts advocating for the Canadian government to maintain the international student
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program as it is and the temporary foreign worker program as it is. I'm curious to know,
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why do you feel this way? Well, look, just to be clear, we've not suggested that the government
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shouldn't put in place any kind of limits whatsoever, but we are making the point that going from one
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extreme to the other is not helpful, certainly not helpful for small and medium-sized firms that
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often depend on the labor force input that they get from foreign workers and foreign students.
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So, I get that there might need to be some degree of capping of the service.
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At the same time, the switch, the speed of the switch is pretty harmful, and we do want to make sure
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that we defend some of the positive benefits of foreign workers and foreign students supplementing
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the Canadian labor force. This has been a real help to a lot of small and medium-sized firms that are
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desperate for staff and haven't been able to find it through other means.
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I want to get into that. One of the arguments that we hear about why we need the international student
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program to be bringing in the number of student visas we have in the temporary foreign worker program
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is that we have a labor shortage in this country. It turns out that from what we've been able to find,
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the labor shortage does not exist when it comes to skilled jobs. In fact, there is a surplus of
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available applicants with a bachelor's degree or a diploma for available skilled jobs, and presumably
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when these students come through these colleges, they will then move to that skilled group of applicants.
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Obviously, I'm assuming that labor shortage is just in the low-skilled job industry. Would you agree with that?
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No. I will say that there are labor shortages right throughout the economy in all sorts of sectors out
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there. I take your point, and you're right, that there are lots of skilled workers with university degrees
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that are looking for work in particular fields, and in some cases, they may not have a job to go to.
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But that often is as a result of a mismatch between the area that they've studied and the job that might
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require those particular skills. So we have gaps all over the place. We have surpluses of graduates from
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some programs and giant shortages in other areas. So there is a shortage of skilled workers in all sorts
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of fields out there. But the premise of your point is absolutely true, and that is where some of the gaps
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are most acute is in the entry-level junior parts of the economy. Retail, hospitality, the service sector,
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arts and entertainment. There's a whole bunch of fields that are looking for entry-level workers that
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don't have massive amounts of skills or education, but we need people. And many employers in those
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environments are saying, I'm not finding any Canadian applicants, but I do have some available. You know,
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there are foreign students, foreign workers that would love to take these jobs. That certainly provides
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benefits to us as Canadians as a whole as well. And why do you think that Canadians aren't taking or
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applying for these low-skill jobs? Well, look, we, this is part of the success of our system
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in many ways. And look, I'm a parent of a 15-year-old, so I'm probably as guilty as anyone of this. But
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we have upskilled the Canadian workforce like very few other countries in the world. We have,
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Canada has the highest or near highest level of graduates from post-secondary education in the
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entire world. And so we push young kids to get a university education, to go and learn higher and
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higher skill levels. They come out of these programs and then are, you know, often deeply in debt and
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they're looking for jobs in their chosen field of study and sometimes struggling to do that. Meanwhile,
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we have thousands and thousands of jobs, hundreds of thousands of jobs sitting vacant in all sorts of
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parts of the junior economy. I can understand why a university student that comes out of a program
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20 grand in debt after the degree is saying, hey, I don't really want to go and work in that job in
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the quick service restaurant or on the farmer's field. I certainly could do it, but that's not
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what I studied for. That's not why I went into debt. So if Canadian young kids are not anxious to take
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these jobs, parents are not pushing their kids to take these jobs. And then from the immigration program
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with the higher skilled folks coming into Canada, they're not particularly keen to take these jobs.
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Well, if we still do want to go to a restaurant, we still do want to be able to go to a service business,
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who's going to work there? Right. So it sounds from what I'm hearing, sounds like your position is that
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we actually just haven't had enough immigration in order to solve this crisis with lower skilled jobs. We need
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more people to keep coming in until we have enough of them that are willing to take these low skilled
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jobs that are not being taken by even new immigrants or Canadians. So I guess the question I have, do you
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agree with that? Well, no, look, what I'm saying is that we have a bit of dishonesty in our immigration
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system. We tell the rest of the world, send us your best and your brightest. The people that can come to
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Canada through the traditional immigration program, the ones that get enough points to come to Canada,
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they typically are super well-educated with higher educational attainment than most of the Canadian
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domestic population. They often have tons of work experience as well to get enough points to come
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to Canada. And then they come here and they find the struggle to find jobs in their chosen profession
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because their skills are not recognized. They end up working in the junior parts of the economy anyway,
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often because they feel kind of locked out. What I've said publicly many, many times is meanwhile,
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from around the world, there are lots of people who would love to come to Canada to take some of the
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jobs that Canadians themselves are not lining up to take. We need an immigration system that can do it all.
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We need, of course, some highly skilled immigrants to come into Canada for jobs in universities, for jobs in
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health care and education at the highest skill levels. But we also need people like my Ukrainian
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ancestors that came to work on a farm. We need people who are prepared to do some of the work that
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Canadians themselves are not keen to do. And if we can match that skill set up, man, that can be a huge
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economic driver for the country. So I think we do need immigration at all levels for the country. We can't,
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I think, the point that has been raised that I think is entirely valid, we can't have one system
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for the highly skilled immigrants with a cap on it, and then no cap whatsoever on the on foreign
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students and temporary foreign workers. I do get that we need to make sure that we're bringing in
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strategically and that we were able to meet the service requirements of these new folks for housing
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and health care and everything else. So we do need to make sure the systems are coordinated, but I don't
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want us to turn off the tap of immigration, especially in some of the lower skilled categories,
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because we need it. So I mean, in the case of the International Student Program, they're not
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turning off the tap, are they? They're just restricting it by half. That's right. They're reducing
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it from, you can have, instead of having 30% of your workforce, you have to have 20%. Now look,
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the employer though has huge responsibilities before you can bring in a lower skilled immigrant.
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You have to arrange for them to have housing. You have to pay for them to come to Canada,
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pay for them to leave Canada. There are huge obligations on them. And I think there's the
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view out there that somehow employers are just kind of playing fast and loose here. And while there
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are some bad actors, for sure, for the most part, this has been a big win for the employer and for the
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for the new immigrant. We also have a lot of success in the seasonal agricultural program.
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But is it a big win, Dan, for the Canadian people to have an expansion of say,
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the temporary foreign worker program? It may be a big win. I'm certain that it is a big win for employers.
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They, of course, aren't having to pay wages to Canadians that have higher expectations and
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higher working standard expectations. And I'm sure it's a benefit to the people that are coming in.
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But does it ultimately benefit the Canadian people? Because there's a lot of academic
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research that shows that actually, temporary foreign workers suppress the wages of Canadians.
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If they're willing to work with less rights, you're willing to take a lower wage,
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that will put downward pressure on wages. Do you not agree with that?
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I don't know. Look, unions put that argument forward, unions that are trying to protect the
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Canadian workforce. They say if we bring in more people, it will depress wages. We've seen no
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studies that have actually backed that up. In fact, for the temporary foreign worker program to be able
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to access it, you have to have the government set the wage level that is acceptable in that industry,
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which is typically way higher than what small businesses pay. We've had lots of employers tell us that
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they are, in fact, are expected to bring in a foreign worker. You have to pay more than you would
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to a domestic worker in that same setting because the government sets the wage rate, not you as the
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employer himself. So there are certainly lots of theories that left-wing groups, unions put forward
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to suggest that bringing in immigration is depressing wages. But we've seen nothing that suggests that that's
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the case. What about then this statistic that shows between April 2019 and the end of 2023,
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inflation adjusted per person GDP fell 3% from 59 to 58,000. And of course, that the same thing goes
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for real wages in this country. So I'm guessing that between 2019 and 2023, the immigration stream that we
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brought in, again, record growth, just either hasn't been enough or it hasn't quite worked out the way
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that we've been told by advocates of immigration, because these statistics show that Canada is getting
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poorer. Yeah, well, look, I don't disagree with those findings at all. But what happened? We had a
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pandemic in that period of time, at which point immigration almost halted. And Canada had the longest
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lockdowns in the entire world, we shut down our business community longer than anywhere else,
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causing massive dislocation of the labor force and of for employers. So we took, you know, we took
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years off of our GDP growth because Canada went overboard with pandemic with pandemic restrictions.
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Well, Canada does have is a bit of an outlier in this when it comes to the major economies with our
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our turn, our economic downturn. So again, not only are we an outlier with the rate of growth that we've
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pursued through immigration, but we're also an outlier in terms of our economic downturn. So again,
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to me, when I see those statistics, I see the two being related. I don't see them being isolated incidents.
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Interesting. Well, and I also wonder, you know, again, it just goes back to this question,
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is the international student program, as we've seen so far, with the horror stories coming out of
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these programs, with the fact that we know almost all of these students end up working in low skilled
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service jobs where they can be exploited, because we've seen the reports out of there.
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Is any of this ultimately good for Canadians? And if so, why? Because I'll also give you this statistic.
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The overwhelming majority of students who are coming here on an international student visa,
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which is over a million, by the way, which is up between the previous record, which was last year,
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and again, the previous record the year before that, the overwhelming majority of these students
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are studying business commerce, business management, and computing and IT with over almost
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close to 100,000 studying ESL. I'm trying to understand why this program is good for Canadians.
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Sure. Well, look, the fact is that we as a country are going to need, we have the demographic realities
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of the country suggest that with our rapidly aging population, we are going to need workers in all
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sorts of fields in order just to keep the lights on as a nation. And while, of course, that ebbs and
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flows over time, and perhaps some of the limitation of the numbers is entirely appropriate to discuss from
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a public policy perspective. If we turn the tap off too hard, we are going to really struggle to provide
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service, basic services to Canadians in all sorts of fields. Where are the people that we're going to
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need to take care of mom in a personal care home, if we don't draw a continued supply of highly skilled,
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very compassionate foreign workers that come into Canada? We need to, we need to make sure that we are
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being smart about this as a country. I absolutely agree with that. And whether we have gone too far
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with that, and we've not kept up in terms of providing housing and basic services to some of
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the new immigrants or temporary foreign workers that we're bringing in, also I think an incredibly valid
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point. But I just want to defend a lot of the educational institutions right now. There are a lot of,
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I mean, there is the view, again, often among unions and left, left of center groups, that, that private
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vocational schools, private education is somehow a terrible thing. And these are all worthless programs
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that are basically a backdoor approach to immigration. I'm not suggesting that there isn't some of that,
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that we, but provinces regulate these, these training institutions and employers often really seek
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out graduates rather than from PhD programs. They seek out graduates from, from private vocational
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schools, technical training institutions. And those have been, I think it's been a win for the country
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when we're able to bring in some immigrants that study and have some period of time where they're also
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working at the quick service restaurant in the service location, taking jobs that otherwise would just go
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begging for staff. Wage levels absolutely are an important piece of this. Employers have been
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raising wages dramatically just to try to keep up. But I got to tell you, the program, generally speaking,
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has been working quite well. What I love about where we should go is if we bring people over on a temporary basis,
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we should give them a pathway to permanent residency. So if they come over on a temporary basis and they say,
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let's work for a year or two while you're studying or in a job, then you can flip to permanent, a permanent
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status in Canada. To me, that takes away some of the worries about whether or not the employer is
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going to have some kind of unfair advantage and, and, and actually treat the employee poorly.
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So you would advocate to give international students, almost all international students who come
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here and are working permanent residency, even if they're not fulfilling jobs that are required in the
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economy right now, say like the service industry, say like, no, that's not what I'm saying at all.
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I do want to make sure that, that, well, in fact, to be able to come to Canada, uh, to, to have a,
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uh, to have permanent status, you have to be able to fill a job. The temporary foreign worker program
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is different than the foreign student program. The temporary foreign worker program is already assessed
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that there is a job sitting vacant. Uh, the employer is expected to provide housing. The employer
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is expected to pay the prevailing wage rate. So that program is separate from the foreign student
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program. The foreign student program, if you're in Canada, you're working well, you're providing value,
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giving you a pathway that after a couple of year period, you could flip to permanent status,
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we believe would be a good outcome and balance the labor market needs, uh, with of course, the,
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the needs of foreign workers and, uh, and of Canadians. But it's, you, you would say that it's good value,
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even if they're not, for example, working in the healthcare industry or they're working
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in construction, it would be good value if they were still in the service and food industry.
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Uh, what we, well, well, who are we going to find to work in the service industry,
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in food services, other services, uh, in, in, in a ton of educational categories. We're not,
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we're not, we don't have a lineup of Canadian young people saying, hey, I want to go and work in,
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uh, Estevan, Saskatchewan at the, at the, uh, local, uh, pizza place. We are struggling to find
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people to take those jobs. Wages are a part of it, but it's not the only part of it. We,
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we have basically discouraged Canadian young people from getting work, uh, experience in some of these
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small businesses. We just don't have enough young people to supplement the workforce of the country.
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And that's why these programs have been overall big wins for us as a country. Uh, do we need to
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make sure that we have some controls in place and make sure that we are, we are not, uh, bringing in
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more immigrants than the, than the nation can handle from a housing and healthcare perspective?
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Of course, we need to think about those things, but we need to make sure that we're doing this in
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balance. Well, we recently heard from Brampton Mayor Patrick Brown. I'm going back to the, the,
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uh, the international student question here. Sure. We recently heard from Patrick Brown that there were
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80 diploma mill colleges in Brampton. I think you were, you were noting that these private colleges
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are, are fundamentally good for the Canadian economy. They, they, they do good. So would you
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agree that the colleges, which we've, which we've heard about are essentially just diploma mills? Um,
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would you agree that those 80 colleges in Brampton are good for the Canadian economy? And if so,
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I don't know which of the 80, uh, colleges, uh, mayor, my Brown was speaking of, but I can tell you
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is that there are, there are hundreds and hundreds of fantastic vocational schools across the country.
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And there may be some poor quality ones, but we should be making sure that the poor quality schools
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are rooted out by provincial governments, uh, whether they're serving a foreign worker or whether
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they're serving a Canadian worker. We, we should make sure that we have basic, good quality education.
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Well, the question I have for you then is would you, or would anyone at the CFIB for that matter,
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be willing to send their own child to one of these private colleges to get an education?
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Well, there's, there's tens of thousands of Canadian young people in these very colleges themselves.
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Well, the ones that, the ones, the ones that primarily serve international students.
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Unless you're going to give me a name of one that I know about, I'm not going to be able to tell you
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whether that one is a good one or not. Okay. Well, how about, how about Conestoga and Brampton?
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Sure. I'm sorry. I'm not familiar with, uh, with that program or that institution. What I can tell you
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is that there are loads of colleges that are of great quality. And some have said that there are
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some poor quality ones. We should be, of course, ensuring that the quality of education, whether it
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is for a foreign, foreign student or a Canadian student is, is that these are quality institutions
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providing quality education. That absolutely should be part of it.
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So again, I just, I'm, I'm obviously, I disagree with you on the temporary foreign worker and the
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international student question, because we've seen a major surge in these, in the number of students,
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but we we've also seen tens of thousands of construction jobs being lost. I'm just, I'm just
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wondering what would be too much immigration in your opinion, Dan? Look, I agree with you that there are,
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we haven't done a good job of bringing in, uh, ensuring that construction has a good stream of
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immigrants, uh, and temporary foreign workers that the, the, the immigration program, the traditional
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immigration program works well for the highest levels of education and experience, uh, out there.
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And that has been kind of the Canadian consensus that the, that immigration is good as long as we're
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bringing in people with lots of university education, lots of experience in strong French
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language skills. If they come to Canada, if, if new immigrants come to Canada for, in those categories,
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that's a net positive for the country. However, the challenge is, is we often bring in immigrants
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at that high level, uh, with those high levels of education and experience, the jobs that are sitting
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vacant are in some of the junior parts of the economy in construction, agriculture, the service economy,
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and then the immigrant ends up taking some of these jobs and they like Canadians themselves say,
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wait a minute, this isn't why I went to school. And they either return to their home country or they
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become very disen, disengaged, uh, and, and unhappy about the fact that they're taking jobs that are way
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below their skills and experience. What we need to do is we need to make sure that the immigration system
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brings in folks for specific jobs with the expectation that they're actually doing those
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specific jobs. The temporary, the, the foreign student program, the, the, the actual work in Canada
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is a side piece of what they're, what they're there to do. They're primarily there to study here to study,
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but along with that, if they can fill jobs that are going vacant, that's a great thing. In construction,
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though, I agree with you. We are really struggling to find construction workers. The shortage of labor is
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through the roof and the immigration system, even now with these changes, with these programs,
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does not deliver, uh, the people that are skilled in construction trades and that needs to change.
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Uh, do you think that immigration has played a role, the rapid rise in our population has played
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a role in the housing crisis faced across the country?
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Yeah, I do. I do think that there is, that there is some evidence that, that the, we are,
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I think it could actually be helpful for the housing side if we were bringing immigrants to actually
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help us solve the housing crisis. So that's my earlier point. If we brought in immigrants that could
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actually come and live in Canada and help supplement the, the, uh, the workforce in the construction
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trades, that would be, I think, a very powerful thing. We're not doing that very well at all.
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Uh, but I do think that the point has been made and I think well, that we have limits on the permanent
00:24:06.900
immigration system, but we've not had any kind of limits on temporary foreign workers and foreign
00:24:11.700
students. And as a result, that program has grown dramatically. And that's why I think that there are
00:24:18.020
some attempts to try to scale it back. My point though, is if we scale it back too far, too fast,
00:24:24.100
we are going to create other pressures. And that is on the fact that we're going to just create more
00:24:29.300
vacant positions, which don't help us as Canadians in any way, shape or form.
00:24:35.300
So I, I'm just wondering, do you, do you think that Canada has brought in too many people right
00:24:41.140
now or not enough? Uh, I look, I, I, I would be hard pressed to say what the exact number of immigrants
00:24:48.980
we should bring into Canada is. I think the point though, that has been made is that if we have unlimited
00:24:54.740
immigration on one piece of our immigration system limits on the other, that that's not particularly
00:25:00.020
helpful. I get that point. Uh, and, and, and so we, we accept that there needs to be some capping
00:25:07.060
of that, but to go from kind of unlimited to a very narrow cap is something that I worry about. If we
00:25:13.700
turn the dial too far, too fast, that can create problems. We've taken a long time to build a good,
00:25:20.420
solid immigration system. One of the things that we do best in Canada is immigrant settlement.
00:25:25.860
We, I think it's not perfect here by any means, but we have a better reputation around the world
00:25:31.460
for bringing in immigrants, helping them acclimatize and get used to this. We don't have societal
1.00
00:25:36.820
dislocations where we have a big anti-immigrant, uh, view of viewpoint on the part of most Canadians.
00:25:43.300
And that's a real strength. If we turn off the tap and we limit immigration too far, too fast,
1.00
00:25:49.140
we're going to create even more acute labor shortages. And I do think that that, we need
00:25:54.500
to think about that for the future of the country. Well, the last question I have for you, Dan, is on
00:25:59.380
that. You raised the point that we don't have an anti-immigration, uh, like a, a movement in this
00:26:04.980
country, but we've seen the data. We've seen the public polling that actually a majority of Canadians
00:26:10.260
and a majority of immigrants want immigration to be capped and want it to be slowed down. Why do you
00:26:15.780
think that your position is now the minority amongst even immigrants? I mean, why do you
00:26:21.460
think there's been such a major change in the way Canadians perceive immigration?
00:26:25.060
Well, I think part of it is that Canadians are experiencing a housing, uh, shortage. There's
00:26:29.860
no question about that. And there, and, and we're looking at ways that we can fix that. I think it's,
00:26:35.460
I think it's entirely appropriate to have the discussion about how many immigrants we should bring
00:26:40.260
into Canada, uh, as a whole. I'm not here to be the advocate for unlimited immigration. Just,
00:26:46.260
just have, uh, you know, everybody that wishes to come, come to Canada. I get the point that we
00:26:50.900
need to make sure that we're doing, that we're being smart about this. I guess I, I also just want
00:26:55.780
to make sure that I'm waving the flag to say, uh, going, going too far the other way is not going to
00:27:00.580
help us. Um, you, we, we need to, you know, if you live in an area we've experienced this coming out of
00:27:07.940
the pandemic where there were massive labor shortages in all sorts of areas of the economy
00:27:14.020
and Canadians were pretty unhappy about that too.
00:27:18.500
Right. Well, Dan, I really appreciate you taking the time and, uh, having a good back and forth on
00:27:24.020
this issue. It's, it's a rare, it's a rare occurrence. I think when we get to have a debate about
00:27:28.180
immigration and so I do really appreciate you, uh, you willing to chat and speak with us. Happy to be with you.