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FACILITATING THE ENTRY OF TEMPORARY
WORKERS TO CANADA

On March 11, 1997 the Standing Committee on Citizenship and Immigration began a study of Canada's foreign worker policy, focusing in particular on the needs of the information technology (IT) industry. Over the course of five meetings, the Committee heard testimony from officials from Citizenship and Immigration Canada, Human Resources Development Canada, and Industry Canada and from a number of private sector witnesses. The latter included several IT umbrella groups, representatives of individual companies experiencing a shortage of skilled workers, and a representative of an association of IT professional employees. In addition, the Committee heard from an immigration agency and immigration lawyers specializing in facilitating the movement of skilled workers into Canada. (A complete witness list may be found as an appendix to this report.)

SCOPE OF THE COMMITTEE'S STUDY

The essence of the Committee's study may be stated in five questions:

CHARACTERISTICS OF THE INFORMATION TECHNOLOGY INDUSTRY

The Canadian IT industry is estimated to employ currently over 400,000 people, many of them very highly educated and specialized. In the period from 1990 to 1995, IT employment increased at an annual rate of 4%, with the software and services sector averaging a growth of 11.5%. The industry's compounded annual growth rate in revenues has been 9% since 1990. In 1995, it contributed over $40 billion to Canada's Gross Domestic Product (8% of total GDP) and its products represented over 7% of Canada's total exports. The IT industry performs 40% of all industrial research and development in Canada.

High technology firms operate in a very competitive, fast-paced global marketplace, of which Canadian firms are estimated to have between 2 and 3%. In the software and software services sector, where the life cycle of a product may be only six months, and where small companies dominate, firms need to be able to take rapid advantage of technology development and to respond to the pressing and immediate needs of their customers. Flexibility, change and growth are hallmarks of the industry.

THE NEED FOR SKILLED WORKERS

All of the Committee's witnesses agreed on one thing -- there is a current and serious deficiency in the number of software and other IT workers essential to maintaining Canada's competitive position in the global marketplace. The Software Human Resource Council reported that the industry currently has a national vacancy rate of 4 to 7%. In the Ottawa region alone, which employs 10 to 12% of the Canadian IT workforce, there is a shortfall of an estimated 2,000 people. Moreover, there is no sign that the need for competent, highly-skilled workers will diminish in the near future. As Mr. Georges Nydam of the West Island Business Development Council put it: "We have been overwhelmed by our own success."

While skilled workers are needed at all levels in the industry, a number of witnesses emphasized the serious effects that the lack of experienced, highly specialized workers who can fill leadership roles can have on a company and, more generally, on the Canadian economy as a whole. Since speed and flexibility are so essential, the unavailability of strategic personnel to head up a project or supply essential skills at the right time has meant, and will continue to mean, the loss of contracts to other companies -- or to other countries. New investors may be reluctant to begin enterprises in Canada if they perceive that there are intractable labour shortages, while existing companies may move their operations, or part of them, abroad.

The presence of the right individuals for a project also means employment for the rest of the project team. Estimates of the number of jobs leveraged by one skilled worker essential to the success of a project range widely; however, even the conservative estimate of four jobs created for every strategic worker hired indicates the significant economic spin-offs from having key people available when needed. It is also generally agreed that the expertise brought to a firm by this kind of employee is usually transferred to existing workers, a net gain for everyone.

Skilled workers to meet the labour needs of the IT industry can be produced in three ways: by our colleges, universities and private training institutions; by upgrading the skills of the current workforce; and by recruiting foreign workers to work in Canada on a temporary or permanent basis. In this report, we will not be addressing the first two ways in any detail; there is little doubt, however, that in the long run it is essential that Canada supply its own domestic labour market. In this regard, the Committee is sensitive to the concerns of those of its members who believe the IT industry is devoting insufficient resources to training and retraining its workers and not working closely enough with educational institutions to ensure that employment needs are known and strategies developed to meet them.

IT industry representatives who appeared as witnesses before the Committee acknowledged these criticisms and stressed that they are working to improve the situation. For example, the Software Human Resource Council encourages its members to spend 3% of their payroll on training. The Committee notes with approval that Quebec has recently begun to encourage training by requiring specified companies to spend a minimum of 1% of their payroll on training and retraining, or suffer financial penalty. The Committee urges the federal government, as part of its overall economic development strategy, to give serious consideration to a similar approach. If a tax reduction for companies that do invest in training their employees is not thought desirable, perhaps a special levy could be placed on those companies beyond a certain size that do not invest in training.

Industry and federal government representatives also listed a number of examples of partnership initiatives between companies and educational institutions. Even if the latter greatly expanded their training capacity immediately, however, the Committee was informed that it would take years for the first graduates to become available to the industry and several years for the industry's needs to be met. In addition, as we have already noted, the immediate need for temporary workers in particular is typically not for those in entry-level positions but for highly skilled, experienced individuals who can fill strategic positions to meet immediate needs. Until the industry matures further, it appears that Canada will be unable to supply a sufficient number of such workers domestically.

The Committee does believe, however, that there can and should be an immediate training effect from the temporary entry of strategic, experienced workers for specific purposes. Witnesses provided the Committee with actual examples where this transfer of expertise had taken place. In view of its importance in advancing the professional skills of current Canadian workers, we therefore encourage IT companies to establish mechanisms to ensure that a transfer to existing employees of the specialized skills brought by temporary workers does in fact take place, rather than leaving it to chance.

Our shortages of skilled labour in the IT industry are compounded by the active and successful recruitment efforts of American firms in Canada. Ms. Lynn Nicholson from Corel Corporation informed the Committee that there are reportedly over 190,000 IT job vacancies in the United States. There is no doubt that this "brain drain" to the U.S. is affecting our competitive position, though Canada does remain a favoured destination of IT professionals from other countries.

The Committee thus agrees with all of its witnesses, including government officials, that to meet the short and medium-term employment needs of the IT industry it is essential to facilitate the movement of foreign workers to Canada. We have been convinced in the course of our study that this approach will not endanger employment opportunities for Canadians. Indeed, as we have suggested, it should in fact improve such opportunities by fostering a dynamic and growing industry, thereby creating jobs in Canada. Mr. Nydam, as well as other witnesses, assured the Committee that hiring a foreign worker is not something that companies undertake lightly, in view of the fact that it is significantly more costly than hiring a Canadian.

The Committee was pleased that Citizenship and Immigration Canada and Human Resources Development Canada have responded to the evident needs of the industry with a pilot project designed to speed up the process of bringing temporary IT workers to Canada. Since the pilot has not yet begun, we are unable to assess whether it should be continued on a permanent basis. We note that the reaction of the industry to it was generally positive, although some witnesses urged that still more could be done.

Recommendations

1. The federal government, as part of its overall economic development strategy, should seriously consider offering special tax relief to companies that spend a specified percentage of their payroll on training or retraining, or, alternatively, penalizing companies that do not invest in training.

2. Information technology companies should establish mechanisms to ensure that the specialized skills brought by temporary workers are transferred to existing Canadian employees.

BRINGING FOREIGN WORKERS TO CANADA CURRENTLY

Unless specifically exempted by immigration Regulations, the process of bringing a foreign worker to Canada begins with a submission by an employer to Human Resources Development Canada (HRDC) that includes evidence that the employer has tested the Canadian labour market and been unable to hire or train a suitable Canadian. This process can be time-consuming, expensive and, it is generally agreed, fruitless in a sector with chronic labour shortages. If satisfied with the employer's efforts, HRDC will provide its opinion to Citizenship and Immigration Canada that the offer of employment to the foreign worker will not adversely affect employment opportunities for Canadian citizens or permanent residents. The final decision on this point rests with the immigration officer. In 1996, over 1,700 foreign workers in the IT industry came to Canada as temporary workers under this process, which will continue for IT jobs that fall outside the scope of the pilot project.

THE PILOT PROJECT

The pilot project aims to facilitate the entry of certain temporary workers by streamlining the HRDC validation process through a blanket validation of seven IT occupations known to be in very short supply in Canada. For these seven job descriptions, employers wishing to hire a foreign worker will not have to prove that they have tested the domestic labour market. Instead, the applicant overseas will present his or her job offer and employment authorization application to the visa officer, who, upon verification of the qualifications and bona fides of the applicant and the company, will proceed to process the worker.

None of the Committee's witnesses was opposed to the pilot, although some felt that it could be broadened. It is difficult to assess this view, however, without examining the job descriptions and, more important, without any actual experience with the pilot.

Mr. Nydam suggested that projects that look fine on paper could prove unsuccessful in implementation if they are designed without keeping in mind the individuals who will be administering them, and without adequate staff training. This may be a danger with the design of the pilot project in one particular respect. The seven job descriptions have not been available to the Committee, but it can be imagined that if they are too technically oriented, a visa officer, who cannot be expected to be familiar with IT terminology, could find it be very difficult to judge quickly and easily whether they are matched by the job offer and the qualifications of an applicant. In addition, some specific training for officers abroad in the application of the pilot project may be warranted. If these issues are not addressed, some of the advantages of the streamlined HRDC processes could be lost.

The Committee also recommends that the pilot project should be monitored and evaluated on a continuous basis. The number of workers who enter Canada under the project should be tracked, as should the time it takes to process their files. Employer feedback on the suitability of the seven job profiles and the operation of the project should be ongoing. The monitoring mechanisms should be built right into the design of the project rather than left until later.

Recommendations

3. The pilot project should be designed so that a visa officer at a post abroad may easily determine whether or not a given job offer and the candidate's qualifications fit one of the seven job descriptions.

4. Consideration should be given to providing specific training for officers abroad in the application of the pilot project.

5. The pilot project should be monitored and evaluated on a continuous basis.

THE POSITION OF SPOUSES

We were informed that spouses of temporary workers are generally issued employment authorizations only if their home country will do the same for Canadians on a reciprocal basis. A number of witnesses emphasized that this policy inhibits Canada's ability to attract foreign workers. Dual income families are now so common that to deny employment to an accompanying spouse may deter needed foreign workers from coming here. Indeed, the Committee had anecdotal evidence that this is happening. It may be, therefore, that it is in Canada's best interests at this particular time to take a different view.

The question of spousal employment might better be approached by asking not what other countries do but, rather, what policy would best facilitate our overall economic goals and, most important, give Canadian companies a competitive edge in the global competition for the best IT workers. The Committee has concluded, therefore, that the government should reassess its policy regarding employment authorizations for the spouses of temporary foreign workers.

Recommendation

6. The government should reassess its policy regarding employment authorizations for the spouses of temporary foreign workers.

STREAMLINING IMMIGRATION PROCESSING

Though the pilot project will streamline the HRDC employment validation process for selected IT jobs, some witnesses pointed out that immigration processing can also take considerable time. While they recognized that operating overseas can result in delays that cannot be blamed on Citizenship and Immigration Canada, in some cases they noted inefficiencies that led to unnecessary delay. We recommend, therefore, that officers be advised to assess their procedures so as to speed the process wherever possible. Consideration could also be given to instructing visa officers that IT jobs are very time-sensitive and should be processed on a priority basis.

Mr. Wayne Scott from IBM Canada Ltd. noted that there may be an insufficient number of visa officers in key locations abroad. He mentioned that in a number of countries there are trained people with an interest in coming to Canada, but who cannot be processed, or processed quickly enough, to meet the needs. In the context of its overall reconfiguration of overseas posts and employees, Citizenship and Immigration Canada should pay particular attention to the needs of the Canadian IT industry and the location of foreign IT workers who could potentially help in meeting those needs.

Mr. Howard Greenberg, a lawyer specialized in human resource issues, made an interesting suggestion to the Committee. We noted earlier as a potential difficulty that the job descriptions providing the basis for the pilot program could be too technical for the average visa officer to interpret. Mr. Greenberg suggested that three or four designated centres with expert staff dedicated to this type of processing could provide the necessary expertise to evaluate complex applications.

Recommendations

7. Visa officers abroad should be advised to assess their procedures so as to speed the process wherever possible.

8. Consideration should be given to instructing visa officers that IT jobs are very time-sensitive and should be processed on a priority basis.

9. In the context of its overall reconfiguration of overseas posts and employees, Citizenship and Immigration Canada should pay particular attention to the needs of the Canadian IT industry and the location of foreign IT workers who could potentially help in meeting those needs.

10. Citizenship and Immigration Canada should consider centralizing the processing of complex applications for foreign workers and dedicating expert staff to dealing with them.

ANOTHER OPTION

To this point, the Committee's focus has been on the needs of the IT industry and the government's proposed pilot project to facilitate the entry of temporary foreign workers. Ms. Elda Paliga from Cross Border Management Inc., an immigration consulting firm, suggested another approach. She pointed out that there are currently numerous categories of jobs that are exempt from the validation requirement. An officer processing an application for an employment authorization from foreign workers in these categories does not require an opinion from HRDC that Canadian workers will not thereby be adversely affected.

One of the grounds on which an officer may approve an unvalidated application is if the employment will create or maintain significant employment benefits or opportunities for Canadian citizens or permanent residents. She recommended that this exception be used to facilitate the movement of foreign IT workers, rather than the approach taken in the pilot project. A policy to use this exemption in the Regulations would have the advantage of being simple and cost effective. It could be introduced very quickly, and cancelled just as fast if it ran into problems.

The Committee is aware that this approach could pose some implementation difficulties for Citizenship and Immigration Canada. Problems of definition could arise; processing abroad could actually slow down as lay visa officers grappled with technical language; officers could demand actual proof that a given job would create employment benefits for Canadians.

On the other hand, the Committee notes that the current Immigration Manual instructions to visa officers regarding the interpretation of this provision point out that the resulting benefits or opportunities need not necessarily be related directly to employment. The instructions point to an expansive interpretation: "The realm of possibilities is bound only by one's judgment." Despite the fact that there could be some difficulties in extending the use of the exemption to IT workers generally, the Committee is responsive to this idea and recommends that the government study it further.

Recommendation

11. Citizenship and Immigration Canada should study the feasibility of facilitating the movement of temporary foreign IT workers by using the existing regulatory exemption whereby an employment validation is not required if the employment will create or maintain significant employment benefits or opportunities for Canadian citizens or permanent residents.

CONCLUSION

Repeatedly in the course of this study witnesses told the Committee that skilled human resources were essential to the success of the Canadian IT industry. Operating in a fiercely competitive global market and in the face of dizzying technological change, it is essential that the government do all it can to help the industry meet its human resource needs.

As we noted at the beginning of this report, however, the Committee recognizes that facilitating the entry of foreign workers to Canada to assist the IT industry can be only a short-term solution to the lack of highly skilled and specialized labour. Longer-term solutions must lie elsewhere; our educational institutions must work in partnership with the industry to identify the needs and develop the skills that will serve the country in the future, and the industry must increase its commitment to the training and retraining of its workers.

The Committee was encouraged to see that these realities of the industry appear to be acknowledged now more than in the recent past. The stakes are high. In the words of Ms. Shirley-Ann George from the Canadian Advanced Technology Association:

"The train is literally leaving the station. If we do not look at the bigger issues of the human resource skill shortage, and if we're not actively trying to dramatically increase the pipeline of qualified workers, it's our children and our grandchildren who will unfortunately be watching from inside Canada what's happening in other countries that have gotten it right. Or, probably more realistically, they will be forced to leave Canada for the good jobs elsewhere."
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