Ottawa has failed to collect almost 40% of fines on companies that violated Temporary Foreign Worker rules

The federal government has failed to collect almost 40 per cent of the fines levied on employers for violating the rules of the Temporary Foreign Worker Program, a Globe and Mail analysis has found.

Since 2017, federal inspectors have penalized nearly a thousand companies that rely on foreign workers, imposing more than $11.8-million in fines for workplace infractions.

However, some $4.5-million of that sum remains outstanding, according to a public registry of non-compliant employers, prompting criticism that Ottawa’s enforcement regime is not deterring abuse.

Companies that do not pay government-issued fines are banned from participating in the Temporary Foreign Worker Program. However, failing to collect monetary penalties sends the wrong signal to violators, said John No, a staff lawyer for the workers’ rights division at Parkdale Community Legal Services.

“When law or penalties are not actually enforced, employers feel that they can act with impunity,” he said.

The TFW program is a key immigration stream that allows employers to hire mostly low-wage foreign workers on a short-term basis in regions and sectors where the government determines there is a shortage of domestic labour. The government vastly expanded the hiring criteria in 2022, resulting in soaring use of the program between 2022 and 2024.

The program has been dogged by allegations of worker abuse for decades. Unions and other labour advocates have long called for major reforms such as permanent residency for foreign workers upon arrival in Canada.

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Critics have also repeatedly called for more robust enforcement – an issue thrown into harsh relief by the pandemic. A 2021 report by the Auditor-General of Canada found that Employment and Social Development Canada, the department that oversees the program and carries out inspections of employers, did little to protect temporary foreign workers.

“In our view, inspections lacked the diligence and urgency that were needed in light of both the pandemic circumstances and the department’s own policies,” the report said.

The government has vowed to crack down on employers abusing its migrant labour program. Penalties for substandard working conditions and other violations in 2024 doubled over the previous year, ESDC said in a January statement.

In response to questions from the Globe about the number of employers who have yet to pay their fines and what efforts have been made to exact payment, ESDC said it’s authority is “administrative” and that the Canada Revenue Agency collects employer penalties on behalf of ESDC.

Its main objective, ESDC said, is “to verify if employers comply with program conditions and if they don’t, ESDC has the authority to issue AMPs and bans.”

ESDC said the CRA can use garnishments and tax set-offs to ensure collections.

The CRA did not respond to queries on how they ensure penalties are collected.

About half the penalties issued by ESDC between 2017 and 2022 have not been paid, The Globe’s analysis found. Over the past two years, the government’s collection rate improved, but more than a third of the fines issued during that period remain outstanding.

The Globe obtained copies of decision letters issued by ESDC to employers for fines of more than $15,000 between January, 2023, and September, 2024. In some cases, penalties were issued long after inspectors first uncovered possible violations, the documents obtained via freedom-of-information request show.

In one instance, an ESDC inspection of British Columbia-based Second Brother Mushroom Farm in the summer of 2021 revealed multiple concerns, including workplace abuse, inadequate housing and shoddy recordkeeping, the records obtained by The Globe show. It took a year and a half to penalize the company, and the farm has yet to pay its $34,000 fine, according to the government’s registry of non-compliant employers.

Second Brother Mushroom Farm is no longer operational due to the combined financial blow of the pandemic and federal penalties, said Tri Quach, who told The Globe he helped his mother deal with inspectors because of her limited English.

He denied any wrongdoing and said the government’s enforcement efforts were hurting small family farms. He said the complainants in the case were temporary foreign workers with a vendetta against the company and that inspectors “took their word without any evidence.”

“We are refusing to pay the penalties because we just don’t have the funds and we believe this was a gross injustice applied against a hardworking family-run business,” he said.

Mr. No said the longer the government takes to impose penalties, the harder they become to enforce.

“With passage of time, there is a higher probability that an employer creates a new corporation, hides assets or just simply can no longer be tracked down,” he said.

In an earlier statement, ESDC spokesperson Mila Roy said recent changes to the TFW program have clarified employer responsibilities and strengthened inspectors’ ability to bring abusers to heel. However, inspections vary in length based on the complexity of the case and the amount of evidence to review, she said.

The federal government said it conducted 649 inspections between April and September last year and found some 89 per cent of employers inspected to be compliant.

Over the same period, approximately 20,000 companies were granted TFW approvals, which suggests that relatively few employers are inspected.

Inspections can be triggered by tips or complaints or because a sector is deemed high-risk, ESDC said in a statement. Some employers are also randomly selected for inspection. The department said it could not comment on the number of inspections planned for 2025.

Failing to provide adequate wages and working conditions was the most common issue identified by inspectors, The Globe’s analysis shows, accounting for about a third of all violations. Failing to produce workplace documentation was the second-most common reason for non-compliance, making up almost the same proportion of infractions. (Inspectors can issue penalties for multiple violations at the same workplace.)

Catherine Connelly, a professor of organizational behaviour at McMaster University’s DeGroote School of Business who researches the TFW program, said her work has found that companies often do not provide information requested by the government about potential violations.

“It’s almost like pleading guilty to a lower fine. Yes, they would be penalized for being non-compliant, but it would perhaps not expose them to more government inspections and potentially bigger fines,” she said.

ESDC recently increased penalties for some types of workplace violations: Employers who withhold documentation and are found to be operating illicitly can now be fined as much $45,000, up from the previous maximum penalty of $15,000.

Among the most significant penalties last year was a $365,750 fine and two-year ban issued to Pêcheries LeBreton & Fils Ltée, a New Brunswick-based fish plant. The penalty letters obtained by The Globe show that a January, 2024, inspection found the company had failed to pay temporary foreign workers for all hours worked, violated public holiday pay laws and failed to provide a workplace safe from abuse.

The records also show that the six-figure fine was reduced after the company made submissions to ESDC. The original fines are redacted, and the documents do not provide any details of the company’s defence. The company was also fined in 2023 for workplace abuse.

Pêcheries LeBreton did not respond to multiple requests for comment.

Rather than reforming its migrant labour schemes to better protect workers, Ottawa has limited its enforcement strategy to pursuing the program’s worst actors, said Mr. No.

“The data shows they are failing even at that.”