The Canadian government has recently announced significant changes to the Temporary Foreign Worker (TFW) Program. These changes, effective by September 26, 2024, aim to reduce the reliance on temporary foreign workers, address misuse, and prioritize Canadian workers. Minister Randy Boissonnault’s recent news release outlines several key adjustments that employers and businesses in Canada should understand. This blog will delve into these changes, their implications for employers, and what this means for Canada’s labour market.
What is the Temporary Foreign Worker (TFW) Program?
The Temporary Foreign Worker (TFW) Program is designed to help Canadian employers fill job vacancies when there are no qualified Canadians or permanent residents available. However, the program was intended as a last resort, and the Canadian government is now tightening its regulations to ensure it is used appropriately.
Why Are These Changes Happening?
The Canadian government has observed that the TFW Program has been misused by some employers to bypass hiring talented Canadian workers. With the current labour market conditions showing a rising unemployment rate—6.4% in June 2024, up from 6.2% in May 2024—the government is taking action to reduce reliance on temporary foreign workers and encourage employers to hire domestically. This move is aimed at ensuring Canadian workers, including youth, newcomers, and persons with disabilities, are given opportunities in the labour market.
Key Changes to the TFW Program
Here are the main changes that Canadian employers need to be aware of:
1. Restrictions on Labour Market Impact Assessments (LMIAs) for Low-Wage Jobs
Effective September 26, 2024, the government will refuse to process LMIAs in the Low-Wage stream in census metropolitan areas where the unemployment rate is 6% or higher. This policy will have exceptions only for seasonal and non-seasonal jobs in specific sectors such as food security (primary agriculture, food processing, and fish processing), construction, and healthcare.
2. Limit on the Percentage of Foreign Workers
Employers will now be restricted to hiring no more than 10% of their total workforce through the TFW Program under the Low-Wage stream. This is a further reduction from the March 2024 cap and is aimed at reducing the number of low-wage temporary foreign workers employed in Canada. Exceptions to this limit are allowed for seasonal and non-seasonal jobs in food security, healthcare, and construction.
3. Reduced Duration of Employment for Low-Wage Workers
The maximum duration of employment for workers hired through the Low-Wage stream will be reduced from two years to one year. This change reflects the government’s commitment to minimizing the reliance on temporary foreign workers and promoting more stable, long-term employment for Canadian residents.
4. Ongoing Monitoring and Adjustments
The government will continue to monitor labour market conditions closely and introduce further changes to the TFW Program as needed. Within the next 90 days, a review will be conducted that could impact the High-Wage Stream, current LMIA applications, sectoral exceptions, and processing policies for rural areas.
Impact on Employers
The changes to the TFW Program will have several implications for Canadian employers, particularly those who have relied heavily on temporary foreign workers to fill vacancies:
Stricter Compliance Measures: Employers will face stricter scrutiny when applying for LMIAs, particularly in low-wage sectors and areas with high unemployment. This means businesses will need to demonstrate a genuine effort to recruit and train Canadian workers before turning to foreign labour.
Potential Workforce Reductions: Companies may need to rethink their staffing strategies if they currently employ a high percentage of temporary foreign workers. The new 10% cap could require some businesses to reduce their reliance on foreign labour and invest more in training and hiring local talent.
Increased Investment in Training: To comply with the new rules, employers may need to increase investment in training and upskilling programs for Canadian workers, especially in areas with higher unemployment rates.
Sectoral Exceptions and Opportunities: While there are restrictions, there are also exceptions for sectors like food security, healthcare, and construction. Employers in these fields may still have opportunities to hire temporary foreign workers, though they must meet all compliance measures.
What Employers Should Do Now
Given these changes, it is critical for employers to take proactive steps:
- Review Current Workforce: Analyze your current use of temporary foreign workers and identify areas where adjustments may be needed.
- Develop a Compliance Strategy: Ensure that you have a plan in place to meet new regulatory requirements, including caps on foreign workers and restrictions on LMIAs.
- Explore Alternative Recruitment Options: Consider investing in training programs or partnerships with local educational institutions to attract and retain Canadian workers.
Pre-Pandemic (2019): 30% Cap
- Before the COVID-19 pandemic, the cap on hiring temporary foreign workers was set at 30% of a company’s total workforce. This means employers could fill up to 30% of their positions with foreign workers under the TFW Program.
Pandemic (2021): 20% Cap
- During the pandemic, the cap was reduced to 20%. This adjustment was made as part of broader government efforts to manage the impact of COVID-19 on the labour market, encouraging employers to focus more on hiring available Canadian workers.
March 2024: 15% Cap
- In March 2024, the cap was further lowered to 15%. This reduction indicates the government’s increasing emphasis on reducing the dependency on temporary foreign workers, aligning with the rising unemployment rates and the availability of domestic workers.
September 2024: 10% Cap
- The most recent change, effective September 2024, sets the cap at 10%. This significant decrease underscores the government’s commitment to ensuring that Canadian employers prioritize hiring Canadians and permanent residents, particularly in the low-wage stream.
Key Takeaways
Gradual Tightening of Restrictions: The bar chart shows a clear, downward trend in the permitted percentage of temporary foreign workers, moving from 30% pre-pandemic to just 10% in September 2024. This trend reflects the government’s strategy to gradually reduce reliance on foreign labour.
Focus on Domestic Workforce: These changes align with current labour market conditions, including an increase in the unemployment rate, as the government seeks to promote opportunities for Canadians, such as youth, newcomers, and persons with disabilities, who might otherwise be overlooked
Implications for Employers: Businesses that have relied heavily on temporary foreign workers will need to adapt to these tighter restrictions. They may need to increase investments in recruiting, training, and upskilling Canadian workers to comply with the new caps.
How Titan Law Can Help
At Titan Law, our team of experienced immigration lawyers is here to help employers understand their responsibilities, ensure compliance with new regulations, and explore all available options for meeting their labour needs.
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We offer a range of services, including:
Consultation on Compliance Measures: We can help you understand how the new rules impact your business and assist in creating strategies to meet these requirements.
LMIA Application Assistance: Our experts can guide you through the application process for Labour Market Impact Assessments (LMIAs), ensuring all necessary documentation is complete and accurate.
Workforce Planning: We provide advice on alternative hiring strategies and workforce planning to help you reduce reliance on temporary foreign workers while meeting your business needs.
Conclusion
The recent changes to the Temporary Foreign Worker Program reflect a shift in the government’s focus toward prioritizing Canadian workers and reducing dependence on foreign labour. These adjustments present both challenges and opportunities for Canadian employers, particularly those in sectors heavily reliant on temporary foreign workers.
At Titan Law, we understand the complexities of the immigration landscape and are here to help you navigate these changes smoothly. Our experienced team is ready to assist you with all aspects of compliance, application processes, and workforce planning.
The Government of Canada has announced changes effective September 26, 2024, to reduce reliance on temporary foreign workers. These changes include stricter LMIA restrictions, a 10% cap on low-wage foreign workers, reduced employment duration for low-wage positions, and ongoing monitoring of the program.
The new cap limits employers to hiring no more than 10% of their total workforce through the TFW Program’s Low-Wage stream. This is a reduction from the previous cap of 15% in March 2024.
Yes, exceptions to the LMIA restrictions apply to specific sectors such as food security (primary agriculture, food processing, and fish processing), healthcare, and construction, where seasonal and non-seasonal jobs may still be eligible for LMIA processing.
The maximum duration of employment for low-wage temporary foreign workers has been reduced from two years to one year, effective September 26, 2024.
Employers should review their current workforce, develop a compliance strategy, and explore alternative recruitment options, such as investing in training programs for Canadian workers. Consulting with immigration experts, like those at Titan Law, can help ensure compliance.
