BlogGood News for Canadian Employers: Government Announces New Measures to Address Labour Shortages in Canada

20 April 2022

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On April 4, 2022 the Department of Employment and Social Development Canada (“ESDC”) announced sweeping new Temporary Foreign Worker Program (“TFWP”) policies that will make it easier for Canadian employers to hire temporary foreign workers (“TFWs”) through the Labour Market Impact Assessment (“LMIA”) process. These policies come on the heels of strong economic reports showing that the Canadian economy has rebounded from the worst effects of the COVID-19 pandemic and that there is currently a high job vacancy rate in the country. Let’s review the three major changes that every employer needs to know!

To truly appreciate the significance of EDSC’s new policies it is helpful to look back to the years between 2012 and 2014 when there were commonly held perceptions that the government was not doing enough to ensure that Canadians were being considered for job openings and that it was too easy for employers to obtain LMIAs (previously called ‘Labour Market Opinions’) for permission to hire TFWs.

Due to these sentiments, ESDC implemented unprecedented policies in 2014 that included, among other things, the introduction of a $1,000 LMIA application fee for each TFW that an employer wanted to hire and a ‘cap’ on how many low-wage TFWs a company could hire in the workplace. These broad policies were put in place to send a clear message that Canadian employers should only hire TFWs on an exceptional basis where qualified Canadians are not available to fill a job opening.

Fast forward to 2022 and the tables have now turned again in favour of facilitating the hiring of TFWs through the LMIA process.

1) Increase in Cap on Low-Wage Workers

Prior to the April 4 policy announcement, employers with 10 or more employees were subject to a cap that prohibited them from having a workplace that was made up of more than 10% of low-wage TFWs. For example, a workplace with 20 total workers could not employ three low-wage TFWs because they would proportionally represent 15% of the workers in that workplace.

Citing 2020 data that TFWs made up less than 0.4% of the overall Canadian workforce, effective immediately ESDC has increased the low-wage TFW cap to 20% for all employers hiring full-time TFWs. Moreover, as of April 30, 2022 employers in the following seven (7) industries with demonstrated labour shortages will have their TFW cap increased to 30%:

  • Food Manufacturing
  • Wood Product Manufacturing
  • Furniture and Related Product Manufacturing
  • Accommodation and Food Services
  • Construction
  • Hospitals
  • Nursing and Residential Care Facilities

Canadian employers who are suffering from labour shortages can now apply to ESDC to hire more low-wage TFWs than before to fill these shortages.

2) More time to Onboard Foreign Workers

Before the pandemic, newly approved LMIAs, which authorizes a Canadian employer to hire a TFW, expired in six (6) months. Practically speaking, this meant that employers had no more than six months from the time of approval to find a TFW to fill the position and that the TFW needed to apply to Immigration, Refugees and Citizenship Canada (IRCC) for their work permit before the LMIA expired.

On April 4 ESDC announced that they will extend the validity period of all approved LMIAs to 18 months, which will give employers more time to interview, screen, and bring TFWs to Canada.

The new policies will certainly benefit employers who have experienced challenges bringing TFWs to Canada even after an LMIA is approved. Specifically, there are many instances where TFWs have trouble starting their jobs in Canada because they are refused work permits by IRCC.

There are many reasons why work permit applications may be refused, including lack of supporting documentation and a clear understanding about the eligibility requirements for a work permit. Therefore, one of the major benefits of this new policy is that it will allow employers to make alternative hiring plans and for TFWs to make a second (or subsequent) application for a work permit in the case of an unexpected work permit refusal.

3) Increase in Employment Duration

Prior to ESDC’s April 4 announcements, TFWs could not be approved under an LMIA to work in Canada for more than two years to fill a Canadian labour shortage. This often meant that employers had to make repeat LMIA applications to keep the same TFW or group of TFWs employed every few years, which added to their cost of doing business but also greatly added to ESDC’s workload to process new applications year after year, even when there was a demonstrated labour shortage affecting the employer.

The April 4 policies increase the maximum employment duration allowed under an LMIA from two (2) years to three (3) years for high-wage TFWs (currently defined in British Columbia as those earning more than $25 per hour) and those applying under ESDC’s Global Talent Stream, which will greatly benefit all three parties involved: employers, TFWs and ESDC.

Firstly, employers will have greater certainty to know that a TFW can remain working with them for three years, which will allow them to better plan for their human resources needs in the future. Secondly, it will give TFWs one additional year to apply for Canadian permanent residence if they wish to remain in Canada on a long-term basis which will, in turn, allow employers to retain their services without applying for new LMIAs. Finally, increasing the maximum employment duration to three years will reduce the administrative burden on ESDC to process repeat LMIAs.

As an immigration lawyer I have seen many changes to the TFWP in the past decade. From 2012 to 2014 the TFWP was mired in controversy with several instances of program abuse making national headlines, which directly led to ESDC’s major overhaul of the TFWP. Today, it is encouraging to see that the pendulum has swung back in favour of employers and TFWs alike and that the statistics clearly support ESDC’s views that the TFWP can serve as a positive force to boost the Canadian economy. Employers should familiarize themselves with the new policies and stay tuned on new updates from ESDC!

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