Fines mounting for violations in Canada’s temporary foreign worker programs

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The federal government penalized nearly 200 companies last year for violating the rules of its temporary foreign worker programs, resulting in record fines for infractions such as wage theft and abuse in the workplace.

Ottawa reached 194 decisions against non-compliant employers in 2023 and handed out $2.7-million in penalties, an average of $13,800 per decision, according to a Globe and Mail analysis of figures published by the government. Some employers have also been suspended from hiring temporary labour from outside the country.

While the government reached more decisions of non-compliance in 2021, last year set a new high for fines. And 2024 is shaping up to be even worse.

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So far this year, the average fine is nearly $29,000, according to data pulled by The Globe in late April. In 2019, it was roughly $3,200.

In mid-April, a lobster processor in New Brunswick, Pêcheries LeBreton & Fils Ltée, was barred for two years from hiring temporary foreign workers and was hit with the largest fine published to date: $365,750.

Canadian companies have sharply increased their hiring of temporary workers from abroad in recent years, helped by federal policy changes that broadened access to such workers. The government has said its efforts are aimed at addressing labour shortages.

But as companies were granted more access to that pool of workers, some economists and labour advocates raised concerns about the potential for exploitation.

“There’s a subset of companies that are using the Temporary Foreign Worker Program because they’re very poorly managed to begin with,” said Catherine Connelly, a professor at McMaster University and the author of Enduring Work: Experiences with Canada’s Temporary Foreign Worker Program. “They are not able to keep local workers. So their Hail Mary pass is ‘Okay, we’re gonna get temporary foreign workers who cannot quit.’”

The federal government inspects employers who use programs with closed work permits, which tie an employee to a specific employer. The Temporary Foreign Worker Program (TFWP), which falls under the purview of the Employment Department, and some parts of the International Mobility Program (IMP), which is run by the Immigration Department, have closed work permits.

Companies may be notified in advance of an inspection, and those assessments can be random or based on tips, previous non-compliance or the suspicion of wrongdoing.

Employment and Social Development Canada completed roughly 2,140 TFWP-related inspections in the 2022-23 fiscal year. Slightly more than 1,000 were found compliant, while 117 were deemed non-compliant.

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The remaining 1,011 inspections found the employers “compliant with justification.” This means there were initial issues during the inspection, but the employer was able to justify any discrepancies and take corrective action.

“There are no circumstances in which the employer is not given the opportunity to take corrective action,” said Mila Roy, a spokesperson for the department, in a statement. “However, not all employers providing justification and taking corrective actions are automatically deemed compliant with justification.”

Steven Meurrens, an immigration lawyer in Vancouver, said there can be “super innocent” reasons for why an employer initially runs into trouble. He provided the example of a company that accidentally underpaid an employee for working on a statutory holiday but corrected the error a week later.

“This is all before the inspection even starts,” he said. “Some officers will record that as non-compliant for that week. But it was justified because they later compensated the employee and they realized that they made the mistake.”

When companies are found non-compliant, they can be fined, barred for one or more years from hiring temporary foreign workers – or both. Permanent bans from using migrant work programs are exceptionally rare. The penalty is based on several factors, including the severity of the violation and any history of non-compliance.

The government does not publish the specific details of violations, but it does provide the general reasons for non-compliance. In the case of Pêcheries LeBreton & Fils Ltée, the lobster processor did not ensure that its workplace was free of abuse or reprisal and the pay or working conditions did not match or exceed what was listed on the offer of employment, among other infractions.

Non-compliant companies tend to be smaller firms, many of them in the agriculture, restaurant and trucking industries.

Larger companies that use migrant work programs are “generally compliant,” said Stephen Green, managing partner at immigration law firm Green and Spiegel. “The system is working because companies are terrified to be on that list” published by the government.

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The Globe’s analysis found that, as of April 26, 478 companies that had been deemed non-compliant were eligible to hire temporary foreign workers again because they had paid fines and served temporary bans, where applicable.

However, at least 350 employers were deemed ineligible because they had not paid their penalties. Collectively, those companies owe more than $3.5-million. (The government website lists infractions since 2016.)

In writing her book, Dr. Connelly spoke with many companies that use the TFWP. Many of them “have not been audited and have never even heard of anyone being audited,” she said. “Some of the employers were disclosing to me bad practices that probably would not survive an audit.”

Immigration, Refugees and Citizenship Canada said about 24 per cent of companies that employed workers with closed work permits through the IMP had undergone compliance checks between April 1, 2019, and the end of 2023.

“My sense is that the enforcement is still very weak in terms of the reach,” Dr. Connelly said. “When they are auditing people, they very frequently seem to find problems.”

She also said some of the fines felt small. “That’s not really much of a disincentive” to misusing the programs.

Editor’s note: An earlier version of this story said Pêcheries LeBreton & Fils Ltée was fined in mid-February. In fact, it was mid-April.