A recent article written by the Canada West Foundation, (Don’t punish the West for creating jobs, Globe and Mail Mar 13) makes a great case that the changes to the temporary foreign worker program (TFWP) were made in response to concerns that foreign workers were taking jobs away from Canadians. The article rightly notes that they haven’t really helped the unemployed in provinces such as Ontario, where many more Canadians are looking for work.
A part of the problem, and one that is often overlooked in the ongoing debate about Canada’s labour market and the TFWP, is mobility of the workforce. The fact is that mobility is in decline and few Canadians are interested in relocating.
According to a report from Statistics Canada and Haver Analytics, the percentage of the Canadian population moving between provinces has been in steady decline since 1977, when 1.5 per cent of the population was mobile, to less than one per cent in 2012.
To dive deeper into the reasons for this decline the Canadian Employee Relocation Council (CERC) commissioned Ispsos Research to survey Canadians about their attitudes towards moving for employment purposes. The study of over 2,000 Canadians found that just one in ten Canadians have the greatest willingness to move for employment with all expenses paid and a 10 per cent raise in pay.
Survey respondents had the opportunity to consider scenarios ranging from employment to another city within their home province, and a city in another province. In perspective, 46% of Canadians would consider some form of relocation with a remaining 54% not interested at all. About one third of Canadians say they “might be persuaded to take the job if the right conditions and incentives were in place.”
In addition to a 10 per cent pay raise, and all expenses covered by the employer, respondents had the option to select additional inducements to accept the offer to move. The top three inducements selected were; a further 10 per cent raise in pay (48%), followed by a guarantee of return to the current role after two years (39%) and in third spot, assistance for spouse/partner to obtain employment in the new location (31%).
When asked what policies the federal government could implement to incent employees to consider relocating for employment, respondents identified assistance in housing costs, in the form of tax free housing allowances and non-taxable loans.
While there are tax allowances for families that move for work, the limits are not reflective of today’s relocation costs. The last time any changes were made to the limits on the deductions an employee can claim for income tax purposes was 1984. The tax free allowance for an interest free loan is $25,000, which does little to help in today’s expensive housing market.
The OECD in a report published in July 2013, recommends that “Canada should also reduce barriers to geographical and occupational mobility” as a way of easing rates of unemployment and improving the economy.
If Canada is going to make any progress in resolving regional labour shortages and skills gaps, a serious discussion needs to take place that considers all of the barriers to mobility, such as professional and skilled licensing, employment insurance programs and improved tax incentives for families that want to move to where the jobs are.