Canadian Tire store in Toronto under investigation for alleged mistreatment of temporary foreign workers

The owner of a Canadian Tire store in Toronto is being investigated by the provincial and federal governments for allegedly mistreating and financially exploiting employees hired through Ottawa’s Temporary Foreign Worker Program.

At least 13 of those employees resigned or were fired by the store late last year, according to documents reviewed by The Globe and Mail and conversations with several of the workers.

They allege their wages were arbitrarily reduced by the owner and that they were forced to do jobs for which they were not hired. They also claim the owner threatened to fire them on multiple occasions when they brought up their concerns about the working conditions.

Federal government rules dictate that employers cannot arbitrarily decrease the wages of temporary foreign workers or materially change their job duties. If they do, they will have to apply for a new labour market impact assessment (LMIA), a document needed to hire foreign workers.

A spokesperson with Ontario’s Ministry of Labour, Training, Immigration and Skills Development confirmed to The Globe that the province is investigating Ezhil Natarajan, who owns and operates a Canadian Tire store in Etobicoke, which comprises Toronto’s west end.

Meanwhile, a federal investigation is being conducted by an officer of Employment and Social Development Canada (ESDC), the ministry in charge of the Temporary Foreign Worker (TFW) Program. ESDC would not confirm if it was still investigating Mr. Natarajan, but an e-mail exchange as recent as Aug. 14 revealed that one of its officers was in contact with one of the workers regarding wages allegedly owed to him by Mr. Natarajan.

Employers who have been found non-compliant of the rules set out in the TFW program could be fined and banned from hiring foreign workers.

Mr. Natarajan has denied all the allegations levelled against him. His lawyer, Arthur Tarasuk, confirmed that his client is being investigated by the government and said that Mr. Natarajan “intends to disprove” the allegations.

Canadian Tire Corporation Ltd. CTC-A-T calls its franchise owners “dealers” and regularly uses social media to promote them. Late last year, a LinkedIn post on Canadian Tire’s corporate page featured Mr. Natarajan: “Ezhil enjoys the ability to combine his entrepreneurship skills with impactful social contributions, making a positive difference in the lives of others,” it read.

In a statement to The Globe, the company said it had no knowledge of the situation involving Mr. Natarajan but was investigating the “details and validity of the allegations.”

“We are deeply concerned by the allegations that have been raised,” the statement said. “It is important to note that each Canadian Tire store is independently owned and operated by a dealer, who is responsible for their own hiring, staffing and HR practices.”

Documents viewed by The Globe show that Mr. Natarajan worked with an Alberta-based immigration consultant, Allison Jones Consulting Services Inc., to hire some of the foreign workers. Allison Jones charged the workers more than $10,000 each to process their applications for the TFW program, according to records reviewed by The Globe. It is illegal, under federal immigration law and Ontario’s Employment Standards Act, for an employer to knowingly use a recruiter who has charged a fee to a foreign worker to bring them to Canada.

Allison Jones Consulting did not respond to multiple requests for comment.

Four of the 13 workers have been granted open work permits through the federal government’s Open Work Permit for Vulnerable Workers program, allowing them to find jobs elsewhere. But some of them remain on closed work permits tied to a single employer, in this case the Canadian Tire store.

The Temporary Foreign Worker Program, an immigration stream that brings in foreign labour for one- or two-year periods, has been mired in controversy for more than a decade now. Labour advocates argue the program has become a hotbed of worker abuse and wage suppression. Economists say easy access to foreign workers does not incentivize companies to make productivity-enhancing investments.

Deena Ladd, the executive director of the Workers Action Centre, a non-profit organization that helps predominantly low-wage immigrant workers, says the closed work permit structure of the program allows the employer to have significant control over the worker. “It creates the conditions for a range of bad behaviours,” she said.

But a pandemic-driven labour shortage and ensuing complaints from business groups about the difficulty in hiring workers spurred Ottawa to expand the program in April, 2022. The government increased the share of temporary foreign workers that employers could hire from 10 to 20 per cent in most sectors and 30 per cent in sectors such as hospitality, construction and health care, where a labour shortage was deemed significant.

The number of temporary foreign workers in Canada surged. In 2023, there were 188,580 TFW permit holders, up from 81,435 at the end of 2021. While the program has since been wound down to its pre-2022 rules, many businesses had become increasingly reliant on a steady supply of cheap labour.

Federal government data show that Geethaezhil Inc., the registered business name of the Canadian Tire in question, was approved to hire 34 workers through the TFW program between 2022 and 2024. All but one came through the program’s low-wage stream.

Rowell Pailan arrived in Canada from Saudi Arabia in January, 2023. He is originally from the Philippines but worked for 16 years as a store supervisor in retail chains across Riyadh. He says a friend told him about Allison Jones, saying it would process his application for a Canadian work permit and set him up with a job relevant to his experience, and that Canada had been his “dream” destination for years and he hoped to help his children, who still live in the Philippines, obtain Canadian citizenship.

After a series of interviews in the summer of 2022, Allison Jones told Mr. Pailan that he had been hired as a “stock clerk supervisor” at a Canadian Tire in Toronto. Invoices and e-mails obtained by The Globe show that throughout the process, which took two months, Mr. Pailan paid Allison Jones US$7,900 in three tranches.

He worked at the Etobicoke store from January to September, 2023. He described his experience as “horrible and stressful,” saying he was given little training for the job upon arrival and was frequently admonished by Mr. Natarajan for not doing his job well.

“I was never introduced as a supervisor. I was told to work in the hardware department of the store as a sales staff,” he said.

His employment contract said he would be paid $20 an hour, for a supervisory role, and had to work 35 to 40 hours a week. Over time, Mr. Natarajan started reducing Mr. Pailan’s work hours. Mr Pailan’s pay stubs, viewed by The Globe, show that for seven consecutive weeks he was assigned shifts that amounted to just 32 hours per week.

Months into the job, Mr. Pailan said, Mr. Natarajan told him he did not have the skill set and leadership qualities to be a store supervisor and demoted him to stocking shelves and cleaning the store. His pay was reduced to $16.55 an hour.

Fed up with the situation, Mr. Pailan resigned in September, well aware that he would struggle to find a new employer.

A colleague of Mr. Pailan’s, also from the Philippines, described a similar experience at the Canadian Tire store, where he worked from December, 2022, to the following December.

The Globe is not identifying him because he was not authorized by his current employer to speak with the media.

He was hired as a warehouse supervisor at $27 an hour. He, too, says he paid Allison Jones US$7,900 to process his temporary work permit.

Within days of starting work, he realized it was vastly different than the job description in his offer letter. The duties listed in his employment contract included resolving customer complaints and preparing reports on sales volumes. He was instead tasked with stocking shelves, lifting heavy goods and equipment and helping with the store’s relocation to a different part of Etobicoke. Within months, he was given a new title, stock clerk supervisor, and his pay was reduced to $21 an hour.

In an affidavit filed to Immigration, Refugees and Citizenship Canada as part of his open work permit application, he wrote that when he asked Mr. Natarajan why his wage was reduced, he was told he would lose his job if he kept asking questions.

The Globe obtained a recording of a meeting between Mr. Natarajan and his workers, including Mr. Pailan and his colleague. On it, Mr. Natarajan tells the workers a story of another temporary foreign worker whom he had terminated within six days of hiring. “He fired himself because he did not do what he was supposed to do. I noticed some of you, at least two or three of you, have started slowing down,” he says. “If the trend continues … you might end up losing your job, which I don’t want to.”

Mr. Pailan’s colleague was eventually fired after an incident involving a warehouse lift machine. He was attempting to retrieve an item high up on a shelf when another item fell on the machine and rendered it inoperable resulting in it malfunctioning. He said he explained to Mr. Natarajan that it was an accident, but was terminated nonetheless.

Since 2017, Canadian Tire stores across Canada have been authorized to hire at least 84 workers through the TFW program, federal government data show. But that figure does not reflect the real number because franchise owners can register their stores under business names other than “Canadian Tire,” as Mr. Natarajan has. The company declined to disclose how much its franchisees use the TFW program.

Under the rules of the program, employers who want to change an employee’s job duties and wage must apply for a new LMIA and get a new work permit issued, noted Elizabeth Long, an immigration lawyer in Toronto. “It is absolutely illegal to arbitrarily reduce an employee’s wage without issuing them a new work permit,” she said. Both Mr. Pailan and the other worker told The Globe they did not obtain a new work permit because they did not sign a new employment contract. They kept working under a reduced wage on their original work permit.

On its website, Allison Jones explicitly states that its main service is to recruit foreign workers for Canadian employers through the TFW program. It is legal and not uncommon for a licensed immigration consultancy to charge a fee of a few hundred dollars to a worker to advise them on how to apply for an LMIA-based job, Ms. Long said.

“The illegality arises when the recruiter or the employer is charging the employee for the provision of services related to an LMIA,” she said.

E-mails exchanged between several of the workers and immigration consultants at Allison Jones show the agency was actively involved in obtaining LMIA-based jobs for the workers. At each step of the process, before they even obtained their work permits, the workers were charged a few thousand dollars.

ESDC told The Globe that employers or anybody recruiting on their behalf “cannot charge or recover any recruitment fees, directly or indirectly from the temporary foreign workers.”

The ministry regularly updates a public database of employers who have been fined for violating the rules of the TFW program or banned from the program altogether. So far in 2024, 113 employers were found non-compliant, with penalties ranging from $500 to $152,000. Depending on the severity of their violations, some employers were banned for as much as five years.

The worker who was allegedly fired by Mr. Natarajan was eventually granted an open work permit and has since found a new job.

Mr. Pailan was not as fortunate. IRCC denied his application for an open work permit. He remains unemployed, still seeking an employer willing to process a new temporary work permit for him. He lives in Wolfville, N.S., with a few of his former colleagues at Canadian Tire and hopes to find a job in the province.

“I am still under a lot of stress. I did not realize things would be this way in Canada,” he said. “People told me Canada was a good country. Maybe I should never have come here.”