N.L. businesses hit with loss of foreign workers

Derek Montague and Ashley Fitzpatrick
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Restaurant closing as result of changes to federal program

For six months, Lloyd Hillier advertised for cooks for his Jungle Jim’s restaurant in Happy Valley-Goose Bay.

Lloyd Hillier, franchise operator for Jungle Jim’s restaurant in Happy Valley-Goose Bay, is closing shop Monday because he can’t hire the people he needs to run the business since changes to the federal temporary foreign workers program. — TC Media photo

He expects not to have to worry about it again.

As of Monday, his doors will close for good.

Roughly 25 Canadian employees are expected to lose their jobs as a result of the closure, a move attributed to Hillier’s labour woes.

He said he believes the move will adversely affect the Hotel North, where the restaurant is located.

Restrictions on hiring

Hillier said he used temporary foreign workers to meet his labour needs in the past, but new restrictions on the federal temporary foreign worker program — announced earlier this month — put an end to that.

With enough local staff hired for positions like table waiting and bartending, he said cooks were still needed in the kitchen to keep the business running and are simply not locally available.  

“I’m only hounding about the cooks,” he said. “Right now, that’s what I need because I hire professional people … and the ones I have right now are leaving, because their two years are up. So they’re going away at the end of the month and I have no replacements.”

He hoped the problem would be solved when the federal government lifted a moratorium from new foreign workers for the food service industry. But when Employment Minister Jason Kenney announced new restrictions, it shut his business out of getting new workers.

The Jungle Jim’s franchisee is not alone in his troubles. Other businesses in the province face the choice of cutting hours or closing doors as a result of a lack of warm bodies both willing and able to fill available jobs.

According to advocates for business owners in the restaurant and seafood processing sectors, labour shortages in certain areas — especially for low-skill, low-wage and entry-level jobs — have been exacerbated by the federal foreign worker program changes.

One change is a restriction keeping employers in areas of high unemployment, six per cent or more, from tapping into the program. And for the purpose of program evaluations, Labrador communities like Happy Valley-Goose Bay are lumped in with Newfoundland’s Northern Peninsula and western region, where unemployment is notably higher.

The result?

“I think you’re going to see a combination of a shrinkage in hours and higher prices,” said Luc Erjavec, Restaurants Canada vice-president, responsible for Atlantic Canada.

“We’re very concerned with the fallout on a number of levels — on the business level, the employee level, the provincial level and, ultimately, on the customer level.”

He said restaurants in the province work with margins of about five per cent pre-tax profit. Paying more to attract labour, therefore, typically translates into higher bills for restaurant customers. And, goes the argument, fewer customers.

The unemployment rate in the province has fallen in recent years, but remains one of the highest in Canada, at 12.7 per cent last month. For St. John’s, it was 6.4 per cent in May — still not low enough for employers to be able to avail of

the temporary foreign worker program.

Changes in what have become standards of service should now be expected over time, he said. It may mean a loss of 24-hour fast food drive-thru operations or, in the case of full-service restaurants, shorter hours or closures on particular days of the week. “Ultimately, with some, it will be closure.”

That said, not everyone agrees the restrictions added to the program were the wrong way to go.

Numbering under 3,000, temporary foreign workers make up less than one per cent of the province’s total workforce. Yet, as noted in a neutral May report of the Atlantic Provinces Economic Council, a Halifax-based think tank, the number of temporary foreign workers in Atlantic Canada has grown more than threefold since 2005, from 3,500  to 10,900 in December 2012. The largest increases were in the food service and fish processing sectors.

As TC Media reported, the Newfoundland and Labrador Federation of Labour’s Mary Shortall pointed to those figures as an alarming trend.

“The issue is that these migrant workers are being used because they’ve created a low-wage economy and the government is just catering to the employers like Tim Hortons, like McDonald’s, who make huge profits, who are still going to be able to access temporary foreign workers, yet there's a million Canadians unemployed out there,” she said.

“What they did is they’ve killed a fly with a sledgehammer here,” said Sharon Horan with the St. John’s Board of Trade. “They basically made everyone who has played by the rules suffer because a few have not played by the rules.”

She said the Jungle Jim’s in Happy Valley-Goose Bay is a sign of things to come.

“This is what we think could be the first business fatality of this announcement,” she said.

“I’m standing right now in Goose Bay next to an A&W that has a sign on the door that says ‘We close 9 p.m. due to labour shortage.’”

Organizations: Restaurants Canada, Atlantic Provinces Economic Council, TC Media Newfoundland and Labrador Federation of Labour Tim Hortons Board of Trade

Geographic location: Goose Bay, Atlantic Canada, Newfoundland Northern Peninsula

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Comments

Comments

Recent comments

  • john westgate
    June 29, 2014 - 05:50

    The government needs to stop giving welfare to able body people, there are plenty out there who are able to work, but just do their 12 weeks so they can sit on their backsides for the rest of the year. If you are able bodied, you should be out working. Nobody owes you.

    • a business man
      July 06, 2014 - 10:28

      Great post. However, the culture of working for 12 week is so engrained in our culture that I have given up on changing it. My new strategy is to move jobs out of Newfoundland, so that I can prevent people from getting the hours necessary to qualify for EI. I would rather see the lazy starve on the street that live of my tax dollars (employer EI premiums). So therefore, I will never ever create a job in Newfoundland, and I actively strive to move jobs out of Newfoundland (for a profit of course).

  • Corporate Psycho
    June 28, 2014 - 21:11

    Simple. Up the wages.

  • Restaurant Go'er
    June 28, 2014 - 15:45

    Raise your wages, increase your benefits, and lower your huge profits. I'm sure you will find suitable people then.

  • Morris
    June 28, 2014 - 15:14

    A telling opinion, “I think you’re going to see a combination of a shrinkage in hours and higher prices,” said Luc Erjavec, Restaurants Canada vice-president, responsible for Atlantic Canada." Missing in this prediction is HIGHER WAGES TO JUSTIFY HIGHTER PRICES!!!!! When your business model depends on low skilled foreign workers you can expect this problem!

  • Anon
    June 28, 2014 - 11:45

    If his business was that important to him, he'd pay living wages so he could get a cook. I'm not going to work for anything less than 15 or 16 dollars an hour. That's the bare minimum to make a living in St. John's. Not sure what it is in Happy Valley Goose Bay. But clearly he's not offering living wages if he can't find workers. No one's fault but his own.

  • Dee
    June 28, 2014 - 10:35

    Mr Hillier I can't believe that you can't get a cook to run your kitchen,or is it more like you can't get a cook at the rate of pay that you want to pay them which is probably not much better then min wage.I know jungle jims got to be doing good because here in St john's a family of four can cost a hundred bucks easy,and that's not drinks.I would think there's more to this then foreign workers.

  • Gerard
    June 28, 2014 - 10:08

    I wonder what the wage rate for the advertised positions was? Was it competitive in the local labour market?. One should expect to have to sweeten the deal to get people to work in northern locales and not rely on foreign workers.

    • vince
      June 30, 2014 - 18:04

      The only place that I could find this guy's add was jobscanadawebsite. He was only offering $13 to $16 per hr

  • Dianne
    June 28, 2014 - 09:24

    Would like to know how much he is willing to pay a professional Canadian cook? Gov't should not give into this employers needs. Also if the Gov't is willing to subsidize bringing in TFW's then they should be more than willing to mobility assistance nation wide or assistance to up the wages of hiring a professional. We need assistance for Canadians not assistance to employ individuals from a foreign country. It's appalling why employers are not advocating for this change as apposed to wanting the TFW program to continue???

  • W Bagg
    June 28, 2014 - 08:46

    The TFW may be advertised as to supply hard to fill jobs. Well if Lloyd Hillier can't fill cooks, but can get staff for other positions, perhaps the cook's pay isn't fair for the work expected. Let's face it the TFW program was created to supply cheap labour. It's funny how capitalism works, if lloyd could sell a meal for 75 dollars in HV-GB he would, but when the cost exclates, they all cry. The supply and demand is the fundamental principle of the western world and how capitalism works.

  • Saucy Face
    June 28, 2014 - 07:21

    What employers fail to mention is that a married immigrant worker can bring his entire family here and all avail of ALL OUR costly social programs such as EI on maternity leave, free education, various government grants, free drugs under the Newfoundland Drug Prescription Program and unlimited medicare at the cost of all of us the moment they set foot in the province. So as an example, this one immigrant worker earning earing $11 an hour serving coffee anywhere in Newfoundland and Labrador can have a wife and 5 children getting all this for one person making the minimum wage. How generous are we Newfoundlander and Labradorians to our so called 'private' business sector when one of our own cannot find a hospital bed to sleep in long enough to recover from a colonoscopy or a mother and her children in Nain cannot find a place to live in? Yep, a pretty sweet deal for our so called poor 'private' employers crying and complaining. I'm sick and tired of these outrageous subsidies when our own are in want.

  • Laughable
    June 28, 2014 - 06:33

    Sir, Here my question to you, would you work for the same money, your offering someone else to work for? If your answer is No. There your answer, Close your doors, some one else will fill in the Gap.

  • Ken Collis
    June 28, 2014 - 04:41

    All these business deligations keep saying the folks who "played by the rules" are going to suffer. Well, the rules have now changed. I'm sure if a dozen McD's and Jungle Jims closes, and I feel like junk food instead of something good, I'll manage. I also find it hard to fathom how a business could stay open on 5% before taxes. I just think that's false.