RBC takes heat for Ottawa's flawed outsourcing policy - Financial Post

Royal Bank of Canada has landed in the middle of a public relations fiasco following reports over the weekend that it is in the process of contracting out jobs of Canadian staffers to lower paid foreign workers.

In this case we?re talking about just 45 positions at RBC Investor Services in Toronto that according to the CBC will be transferred abroad through a deal with iGate Corp., a leading global provider of outsourcing services with significant operations in India.

But it?s not simply the fact that jobs are being lost that?s causing the ruckus ? after all, outsourcing is a trend that?s has been going on for years ? but rather the way it?s happening.

iGate is reportedly bringing foreign workers into the country to be trained by the RBC workers whose jobs they?ll ultimately be taking. At the end of the process the iGate employees will return return home, which in at least some cases is India, where they will take up their new responsibilities.

It?s all legal under the federal government?s controversial temporary foreign worker program (TFP) which enables companies to bring people into the country on a temporary basis. Not only is it legal, but it?s happening at plenty of other companies as well.

Critics say the real question is whether the TFP makes any sense for Canada.

?Canadian banks, like every other major institution, have been looking for ways to manage work effectively and there?s nothing wrong with outsourcing,? said Finn Poschmann, vice president of research at the C.D. Howe Institute, an economic policy think tank based in Toronto. ?But some of us have always had questions around the TFP.?

According to Mr. Poschmann, Canadian immigration policy is designed to encourage skilled workers to come here on a permanent basis, to raise their families and generally strengthen the quality of the workforce.

But that?s not what the TFP does.

?The problem with the TFP is it?s not aligned with established government strategy? and the public is starting to recognize that, he said.

In other words, outsourcing is a fact of life but moving people from other lower-cost jurisdictions to this country in order for Canadian companies to cut costs is not in the interests of the country.

Source: http://business.financialpost.com/2013/04/08/rbc-takes-heat-for-ottawas-flawed-outsourcing-policy-cd-howe-expert/

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