The Missing Middle Podcast
Welcome to the Missing Middle, a podcast about why the middle class in Canada is disappearing. We hope to help you understand why life is becoming unaffordable for so many in this country, and what can be done to reverse course.
The Missing Middle Podcast
Is the Temporary Foreign Worker Program Hurting Young People?
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When a business faces a labour shortage, the free market says they should raise wages. So why is Canada’s government stepping in to make labour cheaper instead?
In this episode of The Missing Middle, Cara Stern and Mike Moffatt dive into how Canada's low-wage Temporary Foreign Worker (TFW) program and the explosion of international student work caps have completely disrupted the laws of supply and demand. As Canadian youth face historic unemployment rates, we break down how corporate lobbying and government policy created a cheat code that insulates businesses from capitalism, while pushing young workers off the first rung of the career ladder.
From the housing crisis in Alberta's mountain tourist towns to Tim Hortons' recent PR scramble, we expose the loop of corporate reliance on exploitable temporary labor and ask: how do we let the market actually fix itself?
Topics covered:
- Canada's rising youth unemployment rate
- The Temporary Foreign Worker Program explained
- How international student work rules affect the job market
- Why labour shortages don't always mean there aren't enough workers
- Seasonal jobs, tourism, and staff housing
- The economics of wages, supply, and demand
- Tim Hortons and the TFW controversy
- Policy solutions to improve opportunities for young Canadians
#Canada #YouthUnemployment #TemporaryForeignWorkers #Jobs #CanadianEconomy #LabourMarket #Economics #Immigration #PublicPolicy #MissingMiddle
Chapters:
00:00 - The Free Market Myth in Canada
01:24 - Gen Z vs. Gen X: The Youth Unemployment Crisis
02:12 - Why Student Jobs Suddenly Vanished
03:32 - How the TFW Program Ballooned Over 50 Years
05:39 - The Corporate Lobbying Flipping Immigration Rules
07:11 - Debunking the Alberta "Labour Shortage"
09:47 - Why Canada Insulates Businesses From Capitalism
11:11 - What "Dirty Dancing" Teaches Us About Seasonal Housing
14:06 - The Dark Side of Temporary Work Regulations
16:02 - Exposing Tim Hortons' "Local Hiring" PR Spin
18:57 - How to Break the TFW Doom Loop
Research/links:
Tourist towns ‘desperate’ for workers in Alberta
Tim Hortons says it will hire locals, scale back temporary foreign workers
https://globalnews.ca/news/11863474/tim-hortons-temporary-foreign-workers/
Youth unemployment in Canada jumped 57% in 3 years, hitting levels previously unseen outside a recession
Youth unemployment in Canada near record highs since 2022; unprecedented levels outside of a recession
https://www.fraserinstitute.org/studies/extraordinary-increase-youth-unemployment-canada
Temporary ForeignWorkers in Canada:Are They Really Filling Labour Shortages?
https://cdhowe.org/wp-content/uploads/2024/04/commentary_407.pdf
StatsCan: Drayton Valley statistical area sees lowest unemployment in Alberta at 4.9 per cent
Canada’s Temporary Foreign Worker Programs - The Canadian Encyclopedia
https://thecanadianencyclopedia.ca/en/article/canadas-temporary-foreign-worker-programs
Businesses face new limits on temporary foreign worker program
https://www.cbc.ca/news/business/tfw-program-new-limits-1.7333777
3 problems with the temporary foreign worker program and 3 possible fixes, according to experts
https://www.cbc.ca/news/canada/calgary/temporary-foreign-worker-program-fixes-1.7633045
Hosted by Mike Moffatt & Cara Stern & Sabrina Maddeaux
Produced by Meredith Martin
Funded by the Neptis Foundation https://neptis.org/
You find that people uh are less likely to complain about their housing conditions if complaining gets them deported.
SPEAKER_01I've heard employers say they can't find workers or that young people just don't want these jobs, but there is a price where people would want those jobs. Demographics hosted by Mike Moffat and Kara Stern. In a free market, when demand goes up, prices rise. And when supply goes up relative to demand, prices drop. The same applies to the labor market. During times of high unemployment, employers have the power to dictate wages and working conditions. But when unemployment is low, it's harder to find workers. So wages should go up. Canada, though, has completely messed with that, ensuring that it's never really an employees' market in this country. Mike, what was your first job?
SPEAKER_00So, like any good Gen Xer, I started working at an absurdly young age. In my case, it was the age of eight, and I delivered newspapers. And I did that all through elementary school, high school, and even through a couple of years of university. But my first actual paycheck job was going door to door for Greenpeace, trying to sign up people to donations. I really didn't enjoy that job. And you know, what sticks out to me at that time was how hard it was to find that job. You know, back in the early to mid-1990s, the youth unemployment rate was in the 15 to 20% range. So, you know, folks my age, we were just kind of taking whatever we could get.
SPEAKER_01Today's youth unemployment rate is bad, but it's actually not as bad as you had it. So, you Gen Xers, you guys win again, though by this time, by win I mean lose. But given all the other challenges young people are facing these days, the 13.4% unemployment rate feels like a kick in the gut. For some contacts, the regular unemployment rate is 6.6%. So the youth rate is more than double what it is for the rest of the labor force. And of course, when you think about it, it's no surprise that the youth unemployment rate is higher than the general population, but double is actually much higher than the historical average.
SPEAKER_00Yeah, it really is. And, you know, as much as uh there were those issues in the early to mid-1990s, you know, governments did something about it. You know, back then they stepped in and created programs to help with the youth unemployment, some of which actually still exist today.
SPEAKER_01Even though you may have had an even worse job market than today's Gen Zetters, at least you didn't have to compete so heavily with the huge number of people who have been hired through the temporary foreign worker program. We've covered the temporary foreign worker program a lot on this podcast. But one thing we haven't talked about is how the stream of low-wage labor impacts the job prospects for young people in Canada.
SPEAKER_00Yeah, and it's not just the temporary foreign worker program. You know, students are facing and have faced over the last few years way more competition for those jobs, mainly because the student population has exploded, especially with so many international students. So the youth population grew by over 14% between 2021 and 2025. You know, and that's a combination of temporary foreign workers, international students, and a little bit of immigration as well. So there's been a massive supply of young workers competing for a fairly limited number of jobs.
SPEAKER_01Right before I started a university, international students could only work on campus. But then that changed that they could work anywhere for a maximum of, well, it's up to 24 hours per week now, as well as an unlimited amount between semesters. So this is the kind of thing I'm talking about when I say governments are messing with supply and demand in the labor force. More young people are looking for work, which means more supply of workers in the labor market for lower skilled jobs. And that means a higher unemployment rate for youth.
SPEAKER_00Yeah, it really does. Again, there's so many uh young workers competing for a limited number of jobs. And we focus just on the temporary foreign worker issue for a moment. The the TFW program, it's been around a while. It's been around, it's it's older than I am. It's been around since 1973. And, you know, it was designed to keep the economy moving and helping out wherever you know there were limited labor shortages. And the idea was simple that if employers couldn't find workers locally, they could bring in foreign nationals on a very temporary basis to fill those gaps in kind of specific industries where it was hard to find people. But nowadays, it's not just one bucket of you know very kind of specialized labor. You've got a high wage stream, you've got a low wage stream, you have the primary agriculture one, which is the one that goes back to the 70s, and you have this fourth stream, which is specifically dedicated to supporting permanent residency. So the program, you know, started out in a limited sense, but has really ballooned over the last 50 plus years.
SPEAKER_01What we want to talk about today is that low-wage stream. That's a stream that seems to be having a significant impact on youth unemployment rate.
SPEAKER_00And it wasn't always like that. So back when the program started in the early 70s, it was very limited to a certain set of occupations, you know, very high-skilled ones, some academics, and a lot of specific agricultural roles, you know, things like picking tobacco and that kind of thing. But that changed in the early 2000s when the low-wage stream was created. You know, suddenly employers could bring in people for pretty much any job, especially jobs that only needed a high school diploma or a bit of uh on-the-job training. And these were the jobs that traditionally students worked. So students weren't just competing for tobacco picking jobs in Tilsonburg, but now they're competing for fast food jobs and jobs all over the economy. So, you know, as long as the temporary foreign worker program has existed, you know, there's always been concerns around what it means for young workers, but now even more so because that competition is so much more fierce.
SPEAKER_01And we've seen a big backlash to immigration over the last few years, and so much so that Canada has reduced the number of people it lets into on the permanent residency side of things. The temporary foreign worker program has had some changes too. Basically, most sectors have a 10% cap on low-wage TFWs. But in 2022, thanks to a lot of lobbying from places like Tim Hortons, that cap jumped and businesses could have almost a third of their employees through the program. And it didn't drop back down to 10% until September 2024, when public opinion shifted drastically. And then because of that backlash and the spiking youth unemployment, they changed the rules again in this past April. Now, employers have to advertise a job for eight weeks before they can even apply to get a temporary foreign worker. Although some designated sectors, such as healthcare, food manufacturing, and accommodation, are eligible for a higher cap than that.
SPEAKER_00Yeah. So, and we see in some of those uh industries, like the accommodation industry, the hospitality sector, hotels, motels, and so on. You know, you think of jobs like the front desk clerk, housekeeping staffs, janitors, accommodation service managers, you know, these jobs where you can kind of go above that 10% cap. A lot of those jobs were traditionally filled by students or by younger workers. So even with these reductions, the fact that these exemptions exist that allow for higher levels of temporary foreign workers to be hired, they tend to disproportionately push out or at least cause increased competition with young workers.
SPEAKER_01What got us talking about this most recently was an article that was kind of being passed around in our group chat with the headline Tourist Towns Desperate for Workers in Alberta. And it basically said that Alberta's tourism industry is facing a severe labor shortage, with mountain towns like Banff and Canmore being particularly affected. And employers highlighted two primary barriers. They said there was a critical housing shortage that makes it unaffordable for staff to live in the region, and tighter federal regulations on the TFW program, which have slowed the ability to fill vacant roles with international staff.
SPEAKER_00Yeah, and when you guys were passing this around the group chat, it drove me absolutely up the wall. I found it incredibly maddening. Because as first, like the article presents no actual evidence that there's an unusually high number of job vacancies relative to previous years. Now, that that might be true, might not. We don't know. We're never told, but let's suppose it is true. Let's say, okay, everything that they're saying is factually accurate and could be backed up by data. Well, employers could just raise their wages and attract more people to work there. If they can't find enough people to work at a certain price, raise the price. And yes, that would have knockdown effects that, you know, if you raise the price of labor, that's you know, you may have to charge more for rooms or more for meals or whatever. But it also means that young workers would make more money and it would create incentives for companies to innovate to invest in technology so they're less labor intensive. You know, we talk a lot in this country about our productivity issues, but every time a company is forced to be a little bit productive because they can't find enough workers, government comes in and goes, no, no, no. God, you know, don't uh don't invest in in technology. We'll just make it easier for you to hire a bunch of more low-wage workers. So it's drove me absolutely up the wall.
SPEAKER_01Yeah, I find this part of the program very like offensive to workers. I've heard employers say they can't find workers or that young people just don't want these jobs. But there is a price where people would want those jobs. So if an employer is not getting the number of people they need to fill those jobs, if they just raise wages, they will find someone. There is a number where people will do these jobs. What I want people to get from this is if you hear them talking about labor shortages, what that means is really employees' market. And that should be the time when wages go up. I also think it's interesting that you get this constant push from employers saying they need more workers, and then the government expands the program. Then you get spiking youth unemployment, and then there's backlash, and they implement new restrictions, and then employers say they can't find people. It's a cycle that just keeps going on and on.
SPEAKER_00Yeah, it absolutely does. And I think it's symptomatic of a larger problem in Canada that actually goes way beyond the TFW program. You know, like in any other sector in the economy, prices are allowed to adjust. So let's say the demand for gasoline goes up. We all want to take a bunch of road trips. Well, we don't suddenly have gas shortages everywhere. We let the price adjust upward, and in economists speak, we get the quantity supplied and the quantity demanded to stay in balance. And when we get to a gas station, there's actual gas available to buy. But for some reason in Canada, we know we don't treat labor the same way, at least not in the same profession. So that is, if the demand for workers goes up, we don't have firms competing with each other for more workers, putting upward pressure on wages. Instead, we declare there to be a shortage and have governments put policies in place to eliminate that competition. Right. So, you know, it's like saying, well, there's a shortage of 50 cent cups of coffee in my neighborhood. Okay, yeah, that's true. But if I'm willing to pay three bucks, you know, I can find a half dozen coffee shops to sell things to me. So, you know, it's not a real shortage, right? We have to be able to allow prices to adjust because ultimately what Canada does is we insulate businesses from capitalism, which undermines a lot of the benefits from capitalism. But us non-business owners, you know, we have to kind of deal with the downsides. It's it's just a very unequal system.
SPEAKER_01And I totally get why employers are stressed about seasonal workers, because that's a hard business to be in when you need people for such short periods of time. You're asking them sometimes to move or to give up part of their life to spend time working for a short period of time. And it's it's tough to deal with those seasonal swings, but that's just the nature of tourism. Historically, places like the Jasper Park Lodge and the Banks Springs Hotel solved this by building staff housing right into their business models.
SPEAKER_00Yeah, absolutely. And any good Gen Xer knows this. And how we know it is from the 1987 classic movie with Patrick Swayze and Jennifer Gray called Dirty Dancing, which you have, if you haven't seen it, make time for it, make a weekend of it. You watch Ferris Bueller's Day Off, some other great 80s movies, but make sure you watch Dirty Dancing.
SPEAKER_01For decades, resorts relied on students looking for spring and summer work. And that's what we that's what we saw in the movies. Since these hotels were built by the railways, they sometimes would pay a student's train ticket to get there, and that was a strategic move. By covering that, they made sure if you were tempted to quit, you maybe wouldn't because it would cost you to get home versus if you made it through to the end of your contract, it wouldn't. In fact, according to our producer's mom, Sally Martin, who worked at Jasper Park Lodge as a chambermaid in the 50s, the hotel actually preferred employees who were traveling from the Maritimes because it was a far journey. And so it would cost them more to get home. So there's a better chance that they would actually stay.
SPEAKER_00Yeah, absolutely. And big uh shout out to Meredith's mom here. And to be clear, when uh Kara mentioned those hotels, those two historic hotels, they weren't the uh employers who were complaining about the article. So we're not throwing shade at those two uh fine institutions. But rather, we're just trying to establish the idea that uh smaller towns across Canada in the past and still today, they experience swings in the demand for labor because that's how the business model works, and they find ways to adjust to that, that they don't need government stepping in and you know creating all these temporary foreign worker programs. And one of the main ways that these uh hotels are able to do that is to hire students who happen to have a four-month break in the summer when these places need more staff. And they can entice them, they can say, Hey, go out to BAF, go out to Jasper, uh, we'll give you free or subsidized housing, we'll pay for your travel to get there, to get back home, and so on. But what's happened is that the temporary foreign worker program has blunted the need to build more housing, either permanent housing or seasonal housing. And if companies face labor shortages due to a lack of housing, you know, if we didn't have the TFW program, they could work with pro housing groups in order to get reforms in place to actually get more homes built. But instead, they're given this cheat code of the temporary foreign worker program, bring in a bunch of temporary foreign workers, and you don't have to worry about housing. You don't have to worry about innovating and so on, you know, you get this kind of get out of jail free card.
SPEAKER_01The thing I don't understand is that those temporary foreign workers they do have to live somewhere too. So, like you say it blunted the need for housing, but how does that work?
SPEAKER_00Well, it's you know, you you find that people are less likely to complain about their housing conditions if complaining gets them deported. So, you know, it's an issue with how the temporary foreign worker program is run. But yeah, absolutely. Like everybody needs housing, but things change a little bit depending on who's getting hired and what ability that they have to enforce their their labor rights. And unfortunately, we know that temporary foreign workers have a much harder time of getting their rights enforced than other workers.
SPEAKER_01Makes them ideal workers for a lot of bad employers. I will say though, many companies do still hire locally and they do attract people from across the country by offering highly subsidized housing and food. Like I have a brother-in-law right now who's in the Columbia Ice Fields, and while they didn't pay for his ticket to get there, he does get a bonus for finishing the contract. And it's really cheap housing, and you get food covered and everything. So it's actually a really good experience. And if I were in university, I would absolutely take on one of these jobs because it's such a good experience and it'd be such a unique thing to do, like something you wouldn't do at any other point in your life. And it fits so neatly into the school year that you get that four months off. It's so hard to find a regular job in a city for four months because people want someone who's going to be there long term typically. So it's actually, they do still exist. They are still out there, and I highly recommend people look into it.
SPEAKER_00Yeah, absolutely. And I'm sure it'd be uh going door to door, uh soliciting donations.
SPEAKER_01It probably does. And you don't get to be that person that everyone hates when you open the door and you're like, no, I have to get out of this conversation. It's hard to do. Oh my gosh. I would hate to do that job because you know people are just dreading when they open the door and see you, right?
SPEAKER_00Well, I and I'd just be like, Kara, but you care about the environment, right? Uh of course you're gonna write me a check.
SPEAKER_01So this brings me to another article that caught our attention. That was Tim Horton's announcements that they planned to hire 10,000 local workers while announcing that they were scaling back their use of the temporary foreign worker program. They said something like lobbying for expanded access is no longer necessary given the high youth unemployment rate. And man, did they get roasted online for this?
SPEAKER_00Now of all times, you know, oh, we don't need as many workers. I'm sure that had to do with it, uh, and not, you know, the other uh conditions going on in in our economy. And, you know, not the fact that they are seeing sales decline and you know their their brand value absolutely evaporate. No, no, no. It's the the the economic conditions. That's that's what's changed here.
SPEAKER_01Or the threat of Dunkin' Donuts coming to Canada and helping them realize they need to change the narrative on their hiring practices because they've kind of become a bit of like the poster child for the temporary foreign worker program. I think they thought people would see this and be like, oh, this is so great. But I what I saw mostly was people going, oh, so you you could have been doing this all along. This was a choice that you've made. You could have hired locally because, like, they say that it's no longer necessary, but the rates of unemployment now has like, it's been high for years. It's not that much higher now than it was when they were lobbying to get 30% of their businesses filled with temporary foreign workers. So I don't believe their argument. I don't think most people believe their argument. It's nice that they're doing it now. I'm glad that finally this is happening, but it doesn't really like buy them the goodwill I think that they thought it might.
SPEAKER_00Yeah, it's like, okay, we we no longer kick puppies. It's like, okay, great, but I'm not I'm not gonna give you credit for that. So yeah, it does feel like that this backfired a little bit, and they may have been better off to kind of downplay this and you know, just make those changes and not kind of position themselves as being corporately responsible, you know, because it did uh create this backlash where people are just like, come on, guys, you're you're not good corporate citizens and and don't try to pretend otherwise.
SPEAKER_01So to sum up, Canada's youth are facing a significant higher unemployment rate this summer that is more than double that of the regular workforce. And that's historically much worse than normal. It isn't as bad as the 1990s, but it's close. Canadian youth are facing a high level of competition from people here through the low wage stream of the temporary foreign worker program and the increase in international students who are competing for jobs that used to go to Canadian-born students. We seem to get into the cycle where every time employees have a somewhat difficult time finding workers, instead of doing the thing that capitalism is supposed to do, raise wages, they simply lobby the government to get access to more temporary foreign workers. And then there's an eventual spike in youth unemployment, then there's a backlash, a tightening of the temporary foreign worker rules, and we start it all over again. Mike, how do we get out of this doom loop?
SPEAKER_00Well, I think we have to scale back the temporary foreign worker program and put it back into its intended use. And that's not to eliminate it entirely, right? That there are some reasons why you might need a temporary foreign worker. So, you know, let's say you are refurbishing a nuclear power plant and there's some expert in Germany who can help, and you know, they have skills and experiences that you can't find here. Absolutely, that's the the type of thing this should be used for. But the idea that, you know, we can't find somebody to be an assistant manager of a dairy queen or you know, pour coffee or or what have you just doesn't make any sense. So we really need to be eliminating this for lower skill jobs. If we do find that there are issues, you know, chronic issues there, then you know you could settle that through permanent residency. You know, if they're good enough to work here year after year after year, they're good enough to live here and create a family and you know, contribute to Canada's economy on both the kind of supply and demand side rather than this endless cycle of temporary foreign workers. So it really does come down to that. And don't be afraid to let the economy adjust. And if certain business models don't work anymore, then they should be allowed to die. It shouldn't be the role of government to prop up companies that have unworkable business models that you know rely on massive amounts of exploitable temporary foreign workers. Make the TFW program you know highly focused on high-skilled jobs that really you can't fill in Canada, and let capitalism do its job. Stop propping up on profitable companies with bad business models.
SPEAKER_01I think something you said there is really important. It's not that like that there's something inherently wrong with people coming here and working low-wage jobs. It's the fact that they're temporary. It's the fact that they don't have the same rights as other workers. And so, as someone who cares a lot about workers' rights, I think that you need a some sort of path for people to come here and stay here because it's it's so easy to take advantage of someone who has to leave the country if they complain. It's not a progressive thing to support this program. It's even though I understand there's a lot of progressives who really want to see a lot more immigration or who support a lot of immigration for like for all different kinds of reasons. This is about their working conditions. And I think that's something that people need to realize. It's so important that they have the same rights as everyone else in Canada rather than having the second class of citizens. Thank you so much for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman.
SPEAKER_00And if you have any thoughts or questions about why Tim Horton shouldn't get a participation trophy for hiring locally, please send us an email to missing middle podcast at gmail.com.
SPEAKER_01And we'll see you next time.
