By Melanie Jacob
Journal Editor
[email protected]
As the Council of Federation wrapped up their meeting in Charlottetown on Aug. 29, the Canadian Federation of Independent Business (CFIB) brought three key issues to the table: restrictions on the Temporary Foreign Worker Program (TFWP), interprovincial trade, and increases in pension taxes.
"I think with the changes to the TFWP, we have found that many of our small and medium sized businesses are having difficulty finding and retaining workers," said Marilyn Braun-Pollon, VP of Prairie and Agribusiness for CFIB. "About 10 per cent of our members turned to the TFWP as a last resort and those sweeping restrictions in June are of huge concern."
Earlier this year, the TFWP caused much controversy in Canada due to evidence that some businesses were abusing the program by using it to replace domestic workers. While the government may have implemented the restrictions as a knee-jerk reaction, CFIB is saying that it's now having a negative ripple effect amongst the businesses that really need it.
In Saskatchewan specifically, for example, the available work force isn't as large as it is in provinces such as Ontario and so businesses struggle to find able and qualified employees. Without the TFWP, Braun-Pollon said those businesses that rely on the program will be completely out of options. They will have to make cutbacks such as closing one day a week, which will in turn have an impact on other Canadian jobs.
"With a 3.2 per cent provincial unemployment rate in Saskatchewan, even if we were able to drastically increase the number of Aboriginal people in the workforce, encourage older workers and people with disabilities take new jobs, and enhance our ability to attract people from other provinces, there would still not be enough people to fill the 14,000 jobs that are currently posted on Saskjobs.ca while also replacing the 12,000 temporary foreign workers that are currently in Saskatchewan under the TFWP," said Curtis Hemming, director of government relations for the Saskatchewan Chamber of Commerce, in an email response.
To put it bluntly, Saskatchewan just doesn't have enough workers in or arriving in the province to fill the available positions without the TFWP.
The hotel and restaurant industries are the ones that seem to be suffering the most from these restrictions. As such, CFIB is recommending creating a special stream for hotels and restaurants so as to make the program more accessible to them.
"Unfortunately in some sectors, we don't have folks lining up around the street to clean up hotels or work in the service industry and that's where we're finding the shortages," said Braun-Pollon. "We've said that for those that use the program, it's used as last resort- it's a costly, time consuming, bureaucratic program."
The second problem CFIB is hoping to address is interprovincial trade. By modifying some elements of the current model, such as standardizing processes across the board, trade would become easier. As it stands, a company based in one province has to jump through different hoops just to deliver the same product to different provinces.
"It's time to drop the trade barriers between provinces. Trading with Europe is easier than trading within Canada," said Braun-Pollon. "Exporting to other countries is just as important as open markets within Canada. There's a substantial productivity drain that's holding back economic performance."
For example, Braun-Pollon says Band-Aids won't vary much in size between provinces, so it would be easier for provinces to just adopt the highest standard to make trade easier.
With Canada's international trade opening up the European markets, the other provinces can use it as a model to modernize their own internal cross-province trade agreements. So far, the three most western provinces (British Columbia, Alberta, and Saskatchewan) seem to be leading the way with the New West Partnership Trade Agreement (NWPTA).
The agreement is the first foray into provincial trade modifications and eliminates certain barriers such as trucking regulations, some certifications in skilled trades, and government tendering processes.
According to Hemming, however, agreements such as this need to be made across the board and not specified "in order to benefit certain provinces at the expense of others."
"If we can buy Ontario or British Columbia products or services more easily in Saskatchewan for less money and we can also sell Saskatchewan products or services more easily in other parts of the country, businesses and consumers will win, including people and businesses in Humboldt of course," he said.
Braun-Pollon said that eliminating provincial barriers would be a relatively easy way to boost the economy and should be a top priority.
"Small businesses feel the impact of barriers with internal trade whereas larger businesses have the resources to comply with the red tape," she said. "Trading between provinces should be as easy as trading internationally."
The third key issue CFIB will be asking the government to focus on is retracting their proposal for a mandatory increase in pension taxes. CFIB's stance is that this action will force Canadians to pay another tax when they need that money for other necessities.
"We support the objective of ensuring Canadians have adequate retirement savings plan but the issue of insufficient retirement savings for segments of society is not a lack of motivation, but a lack of income."
For people with a higher disposable income, an increase in a pension tax may not be too difficult to manage, but for people who have to budget everything they have, it could tip the scales against them.
Moreover, the increase would also affect employers, who might try to offset the additional costs by freezing or cutting salaries. A mandatory pension tax would be a costly administrative burden.
As an alternative, CFIB is proposing pooled registered pension plans (PPRP) instead. It would be voluntary and administration fees would be lower. It would also give workers the option of investing in a PRPP or Registered Retirement Savings Plan (RRSP) instead.
"Preparing for retirement is obviously important, but people should have a choice about how to plan for their future (some people buy a house or additional income properties, buy stocks or bonds, invest in their education, invest in farmland, etc.) and being forced into contributing more to CPP or other plans is not the solution," said Hemming. "Since all of the businesses and employees in Humboldt are subject to the same payroll deductions and taxes as other businesses across Saskatchewan, I think this would certainly be a concern to most people in your community."
Both Hemming and Braun-Pollon also suggest the government should instead reduce taxes to give people more money to invest in endeavors of their choice.
"Those are the ways they can help," said Braun-Pollon. "Don't be taxing them through a payroll tax. That's going to come out of their paycheck and they won't have money for other things, such as retirement and daily necessities."
