B.C. business leaders today addressed controversy around athleisure giant Lululemon’s tactics in ensuring that it could hire temporary foreign workers to staff its expanding Vancouver headquarters without first seeking local labour.
The company last year reached an agreement with the federal and provincial governments to do this and to have bureaucrats designate Lululemon’s headquarters expansion as a special investment project (SIP).
Controversy over the agreement reemerged yesterday thanks to an article on the Investigative Journalism Foundation website.
That article suggested that Lululemon threatened to move its headquarters out of Vancouver, and Canada, were it not able to simply hire temporary foreign workers and bypass the step of first advertising positions locally.
The IJF requested internal Lululemon documents under freedom of information laws and this led to B.C.’s Office of the Information and Privacy Commissioner ordering Lululemon to give the IJF redacted records, according to its article.
“One of the key considerations of the final decision to green light our expansion [in Vancouver] will be whether we receive the necessary immigration approvals so that we have the talent to guide our global growth,” Lululemon said in the documents, according to the IJF.
BIV asked Lululemon for these records but the company did not provide them.
The IJF article said the records that Lululemon provided said the exemption from advertising jobs locally was necessary because “the local talent pool does not have the specific skillset we need to grow.”
Lululemon, according to the records, complained that the existing program was cumbersome and complained about stipulations like needing to publish job postings and salary ranges, the IJF article said.
While content in the redacted records is new, the suggestion that Lululemon might move its headquarters out of Canada is not new.
There was speculation in May 2023 that Lululemon might move its headquarters out of Canada were the Canadian and B.C. governments to forbid the company from hiring some foreign workers on short-term permits without first going through the process of first seeking local workers and getting a letter from the provincial government saying that the local labour market could not fill the needed job.
Minister of Innovation, Science and Industry Francois-Philippe Champagne said as much at a May 2023 press conference, which was covered in various media.
“If we did not act, Lululemon’s headquarters may not have been in Vancouver anymore,” Champagne said at the time.
Why skipping the step of first seeking to hire local workers is controversial
Allowing companies to hire foreign workers without first advertising positions locally is a controversial policy stance because many British Columbians are seeking work.
The province’s 5.8 per cent unemployment rate in August was at a higher level than any month since September 2021, when the province was starting to emerge from the COVID-19 pandemic.
One business leader at this morning’s Greater Vancouver Board of Trade press conference, however, defended Lululemon’s tactics.
“I don't think there should be judgment on Lululemon taking every step that it needs to take in order to have people in place to drive the business that they have,” said Fiona Famulak, president and CEO of the B.C. Chamber of Commerce.
She said that the company’s hiring helps provide tax revenue to government.
“It's indicative of the steps that our businesses are having to take in order to make working in British Columbia successful.”
She acknowledged that in some cases companies could find local labour if they were willing to pay higher wages but stressed that the province has labour shortages in many kinds of positions.
Lululemon sent BIV an email to say that “the majority of skilled shortages are in design, product development, and supply chain functions.”
It said that it has hired 116 people under its SIP agreement, and it estimated that those hires represented only three per cent of its corporate-office roles in Canada.
“In collaboration with Canada’s federal and provincial governments, the SIP agreement allows Lululemon the opportunity for more knowledge sharing to support our growth,” the company said.
Advocate lobbies for government to have more incentives for corporate training
Chris Gardner, president of the Independent Contractors and Businesses Association, sounded less supportive of special government agreements to allow companies to bypass local workers and first look for foreign workers, who are usually on restrictive contracts that limit employment to a specific employer.
“Temporary foreign workers should not be used as a way or as an incentive for companies not to invest in training, not to invest in innovation, not to invest in technology,” he said.
“What the federal government needs to do is start tamping back on the floodgates that they've opened [in allowing large numbers of temporary foreign workers into the country].”
Gardner stressed that what governments should be doing is providing more incentives for employers to train workers.
“We've got to provide more spaces for training,” said Gardner whose organization advocates for companies in the construction sector.
“If you want to get a Red Seal designation in British Columbia, it's a four year program. It will take six, eight, maybe 10 years because of the wait list. We're not investing in training spaces. We've got to be more innovative in how we deliver that curriculum.”
Lululemon responds to controversy over its hiring practices
BIV asked Lululemon yesterday how committed it is to having its global headquarters in Vancouver.
It sent back an email saying, “We are proud to operate our global headquarters from Vancouver,” but did not say how committed it was to keeping the headquarters in the city.
BIV also asked the company about the agreement it struck with the province and the federal government to hire temporary foreign workers without first advertising positions locally – a pact that is set to be in effect until 2026.
“The SIP allows us to invest in top talent and promote training and career development for our employee base in Canada as we continue to grow and scale the organization for the future,” the company said.
It added that the agreement “provides Lululemon with an opportunity to identify and employ high-skilled global talent to support our employee base in Canada.”
The federal government said it was working on a response to BIV’s questions about the SIP agreement with Lululemon but did not respond by deadline.
B.C.’s Ministry of Municipal Affairs issues letters of support to Lululemon that enables the company to bypass having labour-market impact assessments, or essentially having to prove that local labour is not available.
It sent BIV a note saying that it “monitors the volume of letters we issue to ensure that Lululemon continues to meet the SIP requirement of creating job opportunities for British Columbians without displacing workers from the job market, and the ministry is satisfied that Lululemon is fulfilling its commitment to primarily hire local workers.”
That B.C. ministry confirmed that it has provided 116 letters to allow Lululemon to bypass normal hiring practices for temporary foreign workers.
“The ministry supports Lululemon in expanding their footprint across Vancouver and further diversifying their workforce,” the ministry said.
“Their investment is bringing economic benefits and well-paying job opportunities to British Columbians, including the opportunity to work alongside talented professionals from around the globe.”
Three things are needed to qualify for a SIP designation, according to the ministry.
It said a business must:
• provide a sizeable multi-year economic investment in B.C.;
• create job opportunities for British Columbians without displacing workers from the job market; and
• provide knowledge transfer to B.C. workers.
After Lululemon Athletica Inc. (Nasdaq:LULU) shares hit an all-time-high closing price of US$511.29 on Dec. 29—the last trading day of 2023—the company’s share price has plunged by more than half despite stock markets having a banner year. At today's closing price of US$247.18, the company's shares are down 51.66 per cent.
Problems have included being accused of greenwashing, pausing sales of its new Breezethrough leggings product line due to an uninspired consumer response, losing its popular chief product officer, Sun Choe, failing to stock sufficient inventory in smaller sizes and increasing competition from brands such as Alo Yoga, Vuori and Athleta.
