Announcement of LMIA restrictions for low-wage workers
29 Aug 2024
On August 26, 2024, the Honourable Randy Boissonnault, Minister of Labour Development and Official Languages, announced new regulations for Canada's Temporary Foreign Worker (TFW) program, which are intended to reflect the current state of the labour market in Canada, reduce misuse of the program, and encourage employers to hire Canadian talent first.
The Temporary Foreign Worker Program was originally created as a temporary solution to fill labor needs within Canada, with the intention of filling job gaps that Canadians or permanent residents could not fill. However, over time, the program has seen some abuse by employers. The Canadian government in particular has noted instances of employers using foreign workers to pay cheaper labor costs, even when they have enough talent available within their own country.
As a result, the Government of Canada saw the need to strengthen measures to reduce and limit the potential for abuse of the temporary foreign worker program and to ensure its legitimate use. These measures reflect the Government's strong commitment to reducing employers' over-reliance on foreign workers and providing more opportunities for Canadians.
The changes announced are primarily focused on low-wage sectors. First, metropolitan areas with an unemployment rate of 6% or higher will no longer process labor market impact assessments (LMIAs) in the low-wage sector. This is to discourage attempts to recruit through foreign workers when there is already a sufficient labor force in the area. Exceptions will be made for sectors related to food security, such as agriculture, food processing, and fish processing, as well as construction and healthcare.
Second, the percentage of foreign workers that can be hired through the Temporary Foreign Worker Program is limited to 10% of the total workforce. This also applies to low-wage sectors, and is a further tightening of the percentage limit implemented in March of this year, to ensure that employers do not become overly reliant on foreign workers.
Finally, the maximum length of service for foreign workers employed in the low-wage sector will be reduced to one year from two years. This is to prevent foreign workers from being hired for longer periods of time and causing distortions in Canada's domestic labor market.
The government emphasized that employers in Canada will be held more accountable for identifying and developing diverse talent in their own country through these measures, and will be required to provide retraining and skills enhancement programs for potential employees in Canada to ensure that their current workforce is adaptable to the future economy. To make this happen, the government will work with employers to provide the necessary support.
The Government of Canada believes this is an important change that will strengthen the fairness of the temporary foreign worker program and ensure that Canadians are given priority access to employment opportunities. Furthermore, to ensure that the measures are stable, the government will continue to monitor changes in the labor market and take further action if necessary. The government has also indicated that a review of high-wage sectors will be conducted in the future.
With this overhaul, it is expected that abuses of the temporary foreign worker program, especially those targeting low-wage workers, will be stamped out. The hope is that this will create a healthy labor market and foreign worker market so that the program can be used for its intended purpose. However, this is not necessarily positive news for employers who are struggling to hire domestically, and we are not yet sure how this will change the job market and the Canadian economy, so it is important to keep a close eye on the impact these changes will have on the Canadian economy and labor market.
Finally, we do not believe that this will have a significant impact on those who are immigrating through PR-only or dual-intent LMIAs, as it only applies to the Low-wage Stream of LMIAs and not to LMIAs with the intention of permanent residence. Therefore, if you are considering this route, it is not a major concern.
On August 26, 2024, the Honourable Randy Boissonnault, Minister of Labour Development and Official Languages, announced new regulations for Canada's Temporary Foreign Worker (TFW) program, which are intended to reflect the current state of the labour market in Canada, reduce misuse of the program, and encourage employers to hire Canadian talent first.
The Temporary Foreign Worker Program was originally created as a temporary solution to fill labor needs within Canada, with the intention of filling job gaps that Canadians or permanent residents could not fill. However, over time, the program has seen some abuse by employers. The Canadian government in particular has noted instances of employers using foreign workers to pay cheaper labor costs, even when they have enough talent available within their own country.
As a result, the Government of Canada saw the need to strengthen measures to reduce and limit the potential for abuse of the temporary foreign worker program and to ensure its legitimate use. These measures reflect the Government's strong commitment to reducing employers' over-reliance on foreign workers and providing more opportunities for Canadians.
The changes announced are primarily focused on low-wage sectors. First, metropolitan areas with an unemployment rate of 6% or higher will no longer process labor market impact assessments (LMIAs) in the low-wage sector. This is to discourage attempts to recruit through foreign workers when there is already a sufficient labor force in the area. Exceptions will be made for sectors related to food security, such as agriculture, food processing, and fish processing, as well as construction and healthcare.
Second, the percentage of foreign workers that can be hired through the Temporary Foreign Worker Program is limited to 10% of the total workforce. This also applies to low-wage sectors, and is a further tightening of the percentage limit implemented in March of this year, to ensure that employers do not become overly reliant on foreign workers.
Finally, the maximum length of service for foreign workers employed in the low-wage sector will be reduced to one year from two years. This is to prevent foreign workers from being hired for longer periods of time and causing distortions in Canada's domestic labor market.
The government emphasized that employers in Canada will be held more accountable for identifying and developing diverse talent in their own country through these measures, and will be required to provide retraining and skills enhancement programs for potential employees in Canada to ensure that their current workforce is adaptable to the future economy. To make this happen, the government will work with employers to provide the necessary support.
The Government of Canada believes this is an important change that will strengthen the fairness of the temporary foreign worker program and ensure that Canadians are given priority access to employment opportunities. Furthermore, to ensure that the measures are stable, the government will continue to monitor changes in the labor market and take further action if necessary. The government has also indicated that a review of high-wage sectors will be conducted in the future.
With this overhaul, it is expected that abuses of the temporary foreign worker program, especially those targeting low-wage workers, will be stamped out. The hope is that this will create a healthy labor market and foreign worker market so that the program can be used for its intended purpose. However, this is not necessarily positive news for employers who are struggling to hire domestically, and we are not yet sure how this will change the job market and the Canadian economy, so it is important to keep a close eye on the impact these changes will have on the Canadian economy and labor market.
Finally, we do not believe that this will have a significant impact on those who are immigrating through PR-only or dual-intent LMIAs, as it only applies to the Low-wage Stream of LMIAs and not to LMIAs with the intention of permanent residence. Therefore, if you are considering this route, it is not a major concern.