Ottawa cites ‘financial abuse’ in $1‑million penalty against employer

Federal officials say “financial abuse” of migrant workers was the key factor behind a $1‑million fine and 10‑year ban from the Temporary Foreign Worker (TFW) Program imposed on a New Brunswick seafood processor that is now challenging the decision in court, according to a report.

Bolero Shellfish Processing Inc. – which operates a lobster‑processing plant in Saint‑Simon employing 250 to 330 workers at peak season, including 15 to 42 temporary foreign workers annually – received the record penalty from Employment and Social Development Canada (ESDC) in October 2023. 

The department found the company failed to provide proper wages and working conditions, comply with federal and provincial labour laws, and ensure a workplace free of abuse in its use of foreign workers.

The company has secured a judicial review in Federal Court and filed a 609‑page record outlining its position, the Telegraph-Journal reported. Court material includes an internal ESDC document recommending what it calls the largest administrative monetary penalty Ottawa has issued over alleged mistreatment of temporary foreign workers, according to the report.

‘Financial exploitation of TFWs’

According to the internal decision document cited by the Telegraph‑Journal, “the company did not make reasonable efforts to maintain a workplace free from abuse, particularly in relation to financial exploitation of TFWs.” It states that “numerous TFWs were hired despite the company having no available work hours for several seasons.”

The report says that during those periods, temporary foreign workers did not perform any work, yet their pay slips “falsely indicated 30 hours per week.” These amounts were “classified as wage advances, which the workers were expected to repay,” and “once eligible for EI, based on the hours falsely reported, the EI benefits were redirected to the employer to recover the advances.”

The inspector found that 17 migrant workers were affected and that the company’s accounting records showed nearly all TFWs ended their contracts in debt to the employer, with amounts ranging from $78.92 to $8,671. The document concludes that workers were expected to repay wage advances, rent and related expenses despite not having performed work, creating “a cycle of financial dependency” that led many to return in subsequent seasons to clear outstanding balances.

Inspectors also documented broader payroll and record‑keeping issues. Interviews with workers indicated paid hours did not always match hours worked and that pay slips were difficult to interpret, according to the document cited by the Telegraph-Journal. In three specific cases, the inspector determined up to $6,063.72 was owed to individual workers, according to the documents cited . Two other TFWs were found to have faced unauthorised deductions, but “exact amounts deducted cannot be verified due to missing or inaccurate deduction slips.”

Additional breaches

ESDC raised concerns about payroll deductions for boots, aprons and other work‑related equipment, which the employer said explained certain entries on pay slips. “The lack of clarity in the pay slips prevents both Service Canada and the TFWs from fully understanding the nature of the deductions and hours worked, undermining transparency and compliance,” the document says, as cited by the publication.

Inspectors also found that two migrant workers were not covered by private health insurance for about two months, contrary to federal rules requiring such coverage until workers qualify for the provincial health plan. The documents further allege gaps in Bolero’s registration under New Brunswick’s regime for employers of foreign workers, which must be renewed annually.

Separate findings under provincial employment standards law concluded the company underpaid 10 workers when they were scheduled for less than three hours, in violation of minimum‑shift rules. That breach resulted in a $200,000 fine and a two‑year ban on hiring temporary foreign workers on its own, according to the Telegraph‑Journal.

Federal officials have said that the case demonstrates that enforcement is working. “Employers are required to provide safe, healthy and dignified working conditions,” ESDC said in a statement. “Any mistreatment of workers or misuse of the program will not be tolerated.”

Company response

Meanwhile, Bolero disputes the findings and the size of the penalties. In its filings, the company says it applied for temporary foreign workers on March 12, 2020, the day after the World Health Organization declared COVID‑19 a global pandemic, and argues ESDC did not adequately consider “exceptional circumstances” created by public‑health restrictions and supply chain disruption.

The company cites an employment contract that promises $14.10 per hour for an “average” of 30 hours a week over a 12‑month period totalling 1,560 hours, with $17.55 per hour for work above 44 hours a week. A supplementary document explains that because the 30 hours are averaged over a year, there may be weeks without work, and states that Bolero would pay the difference if a worker ended the year below 1,560 hours.

Bolero has also filed emails to foreign workers stating they do not owe money to the company. One message says “statements of account” issued at the end of employment “do not constitute any sort of ‘debt’ to the company” and are intended only to show “how you were paid, when you were paid, and the amounts you were paid.” Another tells workers that “under no circumstances should anyone ever request you to reimburse or return any portion of your wages in cash.”

The company alleges ESDC “reversed the onus of proof” by presuming intentional and bad‑faith non‑compliance with immigration rules and “made findings of violations where it said it lacked actual information.” The federal government has until the end of May to file its written arguments in the judicial review, the Telegraph‑Journal reports.

Employers using Canada’s TFW Program are facing unprecedented financial penalties and lengthy bans, even as the number of federal inspections has fallen, according to a report.

In the 2018–19 fiscal year, 74 companies were fined a total of $102,250 for breaking TFWP rules, CBC reported, citing data from ESDC. By last fiscal year, the number of sanctioned employers had nearly doubled to 147, while the total value of penalties skyrocketed to $4,882,500 — more than 45 times higher than seven years earlier. At the same time, applications to use the program have dropped: after reaching roughly 150,000 in 2023–24, the number of employer applications has fallen to about 63,000 so far in the current fiscal year.