Op-Ed by Richard Ingle – Foreign Migration can save the BC Restaurant Industry

Oct 29, 2018 bcrfauser01

Finding quality staff is the biggest problem British Columbia restaurants are experiencing, including the one I manage.  The hiring of migrants, through the Temporary Foreign Worker Program (TFWP), is a solution.  However, few restaurants utilize this opportunity due to the cost, political red tape, and the uncertainty of who they would be hiring.  Without action, this labour shortage will increase the price of eating out.

As a General Manager, I have seen how our restaurant has suffered. Poor staff selection and availability are affecting productivity, quality, and customer service.  For each job opportunity, we have struggled to find, schedule, and retain quality staff.  In 2018, our restaurant had five cases of employees not showing up for day two!

We are not alone.  Victoria restaurant, North 48, closed for good in 2017 because of staff shortages, their statement read “there is an astonishing shortage of cooks in our fair city. We are in a position which provides no options…we cannot operate our restaurant without a full complement of kitchen staff.” The story is similar for Solly’s Bagelry in Vancouver, who temporarily shut down due to lack of staff.  Other restaurants close for one or two days a week or restructure how they service guests, so they need fewer employees to operate.  Simply put, restaurants are losing revenue because they can’t service the demand.

Lost revenue is not the only concern; the limited hiring pool often means compromising on employee quality.  Hiring mediocre staff will negatively affect the experience a customer receives, potentially causing them to choose a competitor.

This situation is not surprising considering the dangerous combination of restaurant growth and the sizeable number of vacant jobs in the restaurant business.  Statistics Canada reports BC’s restaurant sales were up 7.7% in 2017 and according to the BC Restaurant and Food Services Association’s (BCRFA) CEO, there are 14,000 unfilled jobs in the industry.

What are the options?  Restaurant businesses are getting creative, offering flexible schedules, incentives and higher wages.  However, this will not solve the problem.  The solution is hiring foreign migrants through the TFWP.  According to Statistics Canada, there are only, 21 servers, 673 cooks, and 80 chefs in the TFW program as of June 2018.  The industry is not utilizing this program enough.

The TFWP allows employers an opportunity to recruit abroad providing they have followed specific recruitment efforts outlined by Employment and Social Development Canada, and still cannot fill the job with a Canadian.  Additionally, businesses must submit to the government a Labour Market Impact Assessment (LMIA) application.  These requirements take approximately three months.  Upon approval, they can then look for a foreign worker to hire.

Opponents to the TFWP will cite businesses taking advantage of these workers during their time in Canada and it’s true, there have been employers abusing the system.  However, the Government reformed the TFW program in 2014, becoming stricter on rule enforcement. The result was a drop in TFWs from 163,000 in 2013 to 90,000 in 2015.

How can the TWFP be improved for restauranteurs?  Firstly, the LMIA is a fourteen-page document costing $1000 per application, with no refund if not approved.  If a restaurant uses a third-party company to process the application on their behalf, then the costs go up significantly.  With lower fees and a simpler form, more restauranteurs would feel comfortable proceeding with the application.  Secondly, the government should work with local restaurant associations to create bilateral TFWPs with foreign countries.  The BCRFA has initiated the groundwork for this by visiting El Salvador to investigate working with their culinary institutes.  Imagine the ease for restauranteurs if they could approach their provincial association when they are in desperate need.  Not only would they fill a spot on their team, but they will receive trained staff.

What will happen if the labour shortage continues?  Consumers will suffer!  The laws of supply and demand are clear and unbiased.  If the supply of restaurants continues to diminish because they cannot find labour to operate, then there will be less product to cover the demand.  As a result, restaurants will charge higher prices.  Additionally, staff working in the restaurant business will have more leverage to demand higher wages because they know the restaurant down the street is desperate to find labour and will pay more to get it.  With the restaurant business already having low margins, the only option is to again, increase prices.  The TFWP is a solution.