Undocumented Workers: Not Just a U.S. Problem
Some Fear Economic Collapse If Canada’s Government Cracks Down on Illegal Construction
Don Procter / May 2016
While debate rages about what to do with illegal workers in the United States, Canada has its own set of problems on that front. The country’s largest city, Toronto, has a robust construction economy that has proven to be a magnet for foreigners without legal papers. Estimates put the number of illegals at close to 35 percent in some building trades, according to one source. In the residential sector where most of construction activity is (high-rise residential condominiums are an example), sources say undocumented workers on city construction projects range from 10,000 to more than 20,000.
Some of those illegals are working in the wall and ceiling trades. No trade, in fact, is likely immune. But it is difficult to put a finger on precisely how big the issue is because contractors—large, medium and small—are not willing to admit they take on undocumented employees.
Richard Boraks, a Toronto-based immigration lawyer who specializes in construction, says if the ranks of undocumented workers are growing in the construction industry, part of the reason is “a total collapse” of immigration programs. Take the Canadian federal government’s Temporary Foreign Worker Program, for example, which offers foreign workers job placements for four years. The program opened its doors in 2011, providing “a legal trade force” to the construction industry. But many of those workers’ permits had expired by 2015, and they are not allowed to reapply for work again through the program for four more years.
With few or no legal avenues like the TFWP to turn to, builders are forced to rely on undocumented workers to fill pressing shortages, he says, adding that “immigration police” are apt to turn a blind eye to illegals in the construction industry because sending them back home could cripple the industry and, in turn, the economy of big cities like Toronto where construction is a major economic driver.
Boraks, of Worker Canada Immigration Services Inc., has practiced law since 1975. He specializes in immigration, focusing primarily on smaller trade contractors and their workers—many come to him trying to weave through the immigration process.
Joe Volpe, the Liberal minister of citizenship and immigration in the early 2000s, agrees that the Greater Toronto Area’s construction industry would be in dire straits—and apt to “collapse”—if the federal government clamped down on illegals. Many contractors in Toronto are so desperate for skilled workers that they resort to “poaching each other’s labor force,” he says.
While Volpe has heard that in some building sectors as many as a third of the workforce is undocumented, he says “it is easy to exaggerate or underestimate simply because there are no statistics for it.”
Volpe, who was a liberal member of Parliament from 1988 to 2011 and held senior posts when the Liberals were in power in the early 2000s, is currently the publisher of Canada’s only Italian language newspaper, “Corriere Canadese.” That paper has been tracking issues of immigration (including labor mobility across borders) for the past two and a half years.
While many undocumented workers in the wall and ceiling sector in the Greater Toronto Area have come from South America (Brazil has been a major source), the building industry as a whole has employed many illegals from Europe. Italy has seen its largest emigration since post–World War II. Attribute that to the nation’s high unemployment. In some southern regions of Italy, unemployment among working aged men is 40 percent, women 60 percent, says Volpe.
Other European countries have often been their choice of destination for work because of proximity and the entry requirements are straightforward. But many of those who do want to enter Canada legally for employment face an insurmountable hurdle—the language exam. “That has become the (Donald) Trump wall for Italians (and nationals from other non-English-speaking countries),” says Volpe.
He says that foreigners don’t face the same rigorous language barrier to get into other countries—including the United States and other nations in the original G7 Accord.
An alternative is to enter Canada as a visitor under a legal passport and then simply stay in the country to find employment illegally. It is a common method for visitors from European Union countries, says Boraks, adding that the drywall industry in the Greater Toronto Area has seen a significant number of skilled tradespeople from Eastern Europe (Serbia and Croatia, for example), not just Brazil, enter the country in this manner.
So how do they get jobs? In Ontario one possibility is for a foreign visitor to go online and apply for a sole proprietorship business license. “In Ontario there are no controls, SIN (social insurance number) or proof of residency required.” It can be almost as straightforward to get a driver’s license in the province, explains Boraks.
Armed with a subcontractor business name and a driver’s license, a foreign national with trade skills needs only to hire a crew of undocumented workers with trade skills to secure work on a number of projects—even higher profile ones—in the GTA, the lawyer says.
Boraks says while Canadian contractors that hire undocumented workers are seen as cheaters by the government, they often don’t have a choice in part because the supply of Canadian workers is dwindling in many trade sectors. Another reason? Tight profit margins in the highly competitive construction market—the Greater Toronto Area.
But it is a misconception that illegals are hired mostly as a source of cheap labor. Boraks says illegal workers often get a fair wage for their skill sets and, in many cases, they even pay taxes. They may not get the benefits package, however, that their Canadian counterparts are entitled to. And, rather than pay them overtime rates, employers might choose to “bank hours.”
Boraks points out while many undocumented workers are here only to make money before returning to their homelands, that is not always the case. Often, mid-size and small contractors in Toronto, which face slimmer profit margins than large contractors, can’t afford to lose them because of the difficulty of finding skilled replacements. “For many of them it might become a necessity to hire undocumented workers who have the requisite skills but accept work without the benefits (overtime and pensions) that legal workers require,” Boraks says.
A number of Boraks’ construction clients want to settle in Canada but they don’t qualify for immigration status. “The government doesn’t want to make them legal, and the employers don’t want to get rid of them. My job is to somehow make them legal,” Volpe says.
Volpe points out that many undocumented workers have been working in the building industry for years and are “very stable.” They have experience and the skills for the work, they pay taxes (through someone else’s identity, in some cases), and they want to establish permanent residency. “Why would you want to send them back (to their home countries)?”
In fact, it is vital that they are not sent packing, he says, because the Greater Toronto construction workforce is aging rapidly in many trades—including the wall and ceiling sector—and too few young Canadians see the building trades as a career option. “When you have an aging population and an aging workforce like we do, you should be really concerned,” he says.
The former politician turned publisher says he knows some people in the drywall sector who have undocumented workers from South and Central America and Eastern Europe. But because they don’t speak English or French (well enough to pass language exams), they can’t stay. “What do we do? Change the rules. It’s not that big a deal,” he says.
And it has been done before.
He points out one case of a convicted felon without Canadian citizenship who has been allowed to stay in Canada under a special permit, so why not grant undocumented workers who haven’t committed a crime the same privilege?
When the federal government introduced the Temporary Foreign Worker Program in 2011 to allow Canadian employers to hire foreign nationals to fill skilled shortages where Canadians were not available, the employer was responsible for managing workers’ compensation benefits and medical coverage and verifying that the workers had social insurance numbers. While the program worked well to assist many construction sectors, many of the four-year permits have expired, and the rules are that those workers can’t reapply to the program for another four years.
Boraks says the federal government’s stats don’t reveal a need to step outside Canada’s borders to secure skilled trades. That is a mistake. Boraks maintains that stats on how big the undocumented worker problem is are not accurate; no contractor is willing to admit that a portion of its workforce is illegal. In other instances, contractors simply hire subcontractors who are illegal themselves. “The myth has been that there were no illegal workers in Ontario,” he says.
Canada/Europe Free Trade
One initiative on tap that could impact the labor pool is the Canada and European Union Comprehensive Economic and Trade Agreement. On the federal government’s Global Affairs Canada website, the agreement, which is expected to be ratified later this year or in 2017, is called “by far Canada’s most ambitious trade initiative, broader in scope and deeper in ambition than the historic North American Free Trade Agreement.”
Boraks says CETA has “a very large labor mobility component. There are no exemptions for our friends in the construction sector.” But how much of an impact the free trade agreement could have on construction in big markets like the GTA remains uncertain. “In the big scheme of things we’re going to have to adjust our labor standards. It spells the death knell of labor black markets and possibly troubling times ahead for big labor unions.”
Adds Volpe: “The fact of the matter is the Europeans want access to this (Canada’s) market and that also means labor. The labor mobility issue has got to be (under CETA) at least as open as it is under the current European rules.”
While no one in the Canadian federal government granted this writer an interview for comment on CETA’s impact on construction, Diana Khaddaj, spokesperson, media relations, Global Affairs Canada, provided information in an email: “CETA allows for labor mobility for business-related travel. These temporary entry provisions apply to short-term business visitors, intra-company transferees, investors, contract services suppliers, and independent professionals. Of interest to the Canadian construction industry, CETA’s temporary entry provisions will allow for the removal of economic needs tests, in some specific EU (European Union) Members States, for activities such as architectural, engineering, and construction services.”
Khaddaj added: “From a Canadian perspective, EU high-skilled professionals connected to the construction sector, except for managers in construction, will need to comply with education and experience requirements.”
Foreign Worker Program
According to stats on the Government of Canada website, in 2011 more than 192,000 temporary foreign workers entered Canada legally and in that year about 29,000 of those workers transitioned to permanent citizen status. Boraks says last year many of the four-year permits for workers here under the federal Temporary Foreign Worker Progam expired and while most of those workers probably went back home, others slipped through the cracks to stay in Canada, and find work in the underground economy.
He believes the lost tax revenues in the Greater Toronto Area alone might be “a few hundred million dollars but some people say it is in the billions. I don’t know.”
The Toronto-based immigration lawyer thinks there is no appetite in Canada for temporary worker programs. “Canadians are very fair people,” he says, adding they don’t perceive themselves as shutting their borders to keep others from immigrating here. “The same politicians who tell you that we don’t want temporary workers also say that we want immigrants and refugees.”
The City of Toronto estimates that there are upwards of 300,000 undocumented workers in all employment fields in the Greater Toronto Area. It is rationale, says Boraks, for why in 2013 Toronto was declared Canada’s first “sanctuary city” for workers in the country without citizenship status. It means municipally funded services are available to all immigrants whether they are here legally or not.
Don Procter is a freelance writer in Ontario, Canada.