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CFIB warns that limiting foreign labour could worsen staffing shortages for small business

The federal government’s abrupt changes to the international student visas and work permits for accompanying spouses may hurt small businesses that are already struggling to grow and stay productive due to staffing challenges, warns the Canadian Federation of Independent Business (CFIB).

In late January, Minister Marc Miller announced an immediate two-year cap on international student visas as well as the changes around accompanying spouses and post-graduate work permits. The federal government said it’s also reviewing its temporary foreign worker (TFW) program.

“The recent changes will impact many small businesses who are grappling with labour shortages, particularly those in smaller and rural communities,” said CFIB president Dan Kelly. “While it’s understandable why government wants to put some limits in place, it needs to move carefully and consider implications for the whole economy.”

As provinces will be responsible for distributing permits among universities and colleges in their jurisdictions, CFIB is also concerned that public institutions will be prioritized while private colleges will be overlooked.

“Many smaller, private colleges are better able to offer the type of training most needed by employers compared to larger, publicly funded institutions. We need to be careful not to paint everyone with the same brush as many private trainers are instrumental in training professionals in skilled trades where Canada is experiencing a labour crunch,” Kelly said.

The TFW program is one of the most effective solutions in addressing labour shortages. CFIB’s 2021 research showed that among the 16% of small businesses that reported using the TFW program, it had a success rate of 52% in addressing their labour needs, well above the success rates for raising wages (31%) or providing more flexibility with work hours (38%).

“Minister Miller is now talking about further changes to the hours students can work as well as an overhaul of the TFW program. This would reverse some of the helpful changes that the government made a few years ago,” Kelly said. “Let’s not forget that employers are required to pay TFWs a wage set by government and must help with housing for TFWs in lower-skilled occupational categories.”

CFIB recommends that Ottawa hold open and public consultations on the recent announcements and any future potential changes.

“This is not the time to act hastily. All factors need to be considered, especially when labour shortages cost small businesses over $38 billion in lost revenue opportunities,” said Jasmin Guenette, Vice-President of National Affairs at CFIB.