Canada announces further restrictions on temporary foreign worker hiring

Global Immigration alert

On 26 August 2024, in an announcement from Prime Minister Justin Trudeau and the Minister responsible for the Temporary Foreign Worker Program (TFWP), the Honourable Randy Boissonnault, the Canadian government declared that it will impose further restrictions on the segment of the TFWP that is used for hiring of so-called “low-wage” workers. The intended goal of this program change is to reduce Canadian employers’ reliance on foreign national temporary workers, as well as to reduce fraud and misuse of the low-wage TFWP. Nevertheless, there will be some exemptions from these new restrictions, namely jobs in the food security sectors (primary agriculture, food and fish processing), as well as in the construction and healthcare sectors.

The government had previously eased restrictions to address the acute labor shortage that followed the COVID-19 pandemic, a move that resulted in a significant rise in the employment of low-wage temporary workers.

As background, the TFWP requires employers to test the Canadian labor market to ensure that there are no eligible Canadian citizens or Permanent Residents who can perform the role at the required prevailing wage rate. A successful labor market test results in a positive Labour Market Impact Analysis (LMIA). The low wage segment of TFWP has unique requirements associated with it and is applicable to occupations whose prevailing wage rate is below the median hourly wage for all jobs in a province. It is important to note that many work permits are obtained outside of the TFWP and this new restriction does not impact those.

Key developments

In light of the evolving and current employment environment in Canada, the following measures will take effect as of 26 September 2024:

• The Government of Canada will not process applications for LMIAs in the Low-Wage stream for census metropolitan areas where the unemployment rate is 6% or higher. However, there will be exceptions for both seasonal and year-round positions in sectors critical to food security, such as primary agriculture, food processing, and fish processing, as well as for roles in the construction and healthcare sectors.
• Employers will be restricted to employing a maximum of 10% of their workforce through the TFWP in the Low-Wage stream. This cap represents a further reduction from the one implemented in March 2024. Exceptions to this cap will apply to seasonal and year-round positions in essential food security sectors (primary agriculture, food processing, and fish processing), along with healthcare and construction industries.
• The maximum employment period for workers recruited via the Low-Wage stream will be shortened to one year, a decrease from the previous two-year limit.
  

Key steps

The Canadian government has stated that it will continue to monitor the domestic labor market and make any necessary adjustments to the TFWP in the upcoming months. A comprehensive review of the Program is scheduled to start in the next 90 days. This review may also lead to modifications in the High-Wage Stream, reassessment of existing LMIA applications with unfilled positions, changes to sector-specific exemptions, or a halt in processing certain LMIA applications, including those from rural communities.