Victor IngOn August 6, 2024, the Honourable Randy Boissonnault, Minister of Employment, Workforce Development and Official Languages issued a statement in which he publicly mused about the possibility of reducing the number of foreign workers in Canada by prohibiting employers from certain parts of Canada from hiring low-wage workers through the Temporary Foreign Worker Program (TFWP). Less than three weeks later, on August 20, 2024, the Minister took the first such step by approving a temporary pause prohibiting employers located in the Montreal economic region from employing workers earning less than $27.47 per hour through the TFWP. Only six days later, on August 26, the Minister further announced another series of policy changes that will make it more difficult for Canadian employers to hire low-wage temporary foreign workers across Canada. What is driving these changes and what should employers be prepared for?
In 2024 we have seen a dramatic rise of a growing anti-immigration sentiment based on a widely held view that Canada is allowing too many people into the country amidst a housing and cost-of-living crisis. This comes on the heels of a period of unchecked immigration growth following the end of the global pandemic, as well as an unexpected war in Ukraine, which has significantly increased our immigration levels overall. We have now reached the point where even the government is taking a public and aggressive stance against growing immigration levels and the Minister’s latest announcement is intended to rollback COVID-era policies that were introduced to stimulate the economy after the end of the pandemic.
Specifically, effective September 26, 2024, the Government of Canada will reintroduce three policies restricting the ability of Canadian employers to hire low-wage temporary foreign workers, as follows:
Low-Wage Cap
Employers will no longer be able to have more than 10% of their existing workforce made up of low-wage temporary foreign workers. During the pandemic, all employers were allowed to hire up to 20% of their workforce through the TFWP and some employers were even subject to a higher 30% threshold if they operated in high-priority sectors such as construction and health care.
The definition of a low-wage worker changes depending on the province the worker is located in. In British Columbia, the current high-wage cut off is $28.85, meaning that any worker earning less than the wage rate will be affected by these new rules. These changes will affect many employers and temporary foreign workers working in many different fields, and not simply those who serve coffee or perform manual labour as some critics would have you believe.
Shortened Work Permits
Canadian employers hiring low-wage temporary foreign workers will soon only be able to keep them on one-year work permits at a time. Put another way, newly approved low-wage Labour Market Impact Assessments (LMIAs) will now only lead to the granting of a one-year work permit to a foreign worker. Effectively, this means that any employer that wants to continuously hire these workers to fill labour shortages will need to be prepared to apply for new LMIAs every eight months or so, since it can easily take 3-4 months for the government to approve one.
The message from the government is loud and clear: Canadian employers must find a way to hire from the Canadian labour market, including upskilling or re-training existing workers in the labour market to fill job vacancies, rather than relying on the TFWP.
Refusal to Process
The Government of Canada will refuse to process low-wage LMIAs made by employers located in metropolitan areas with an unemployment rate of 6% or higher, with exceptions being granted to employers working in high priority sectors such as agriculture, food and fish processing, construction, and health care. Similar rules were previously in place but were revoked in 2022 during the post-pandemic recovery period.
As you can see, changes to Canada’s TFWP are occurring rapidly and with little notice. In the month of August alone, the government has made three announcements that have far reaching consequences that will affect many thousands of employers and temporary foreign workers alike. All of this forms part of the larger policy goal of reducing overall immigration levels in Canada, which represents a drastic reversal of previous government policy. Our leaders are now publicly teasing further changes such as amending rules surrounding the hiring of high-wage workers, and possibly even reducing overall levels of permanent immigration to Canada.
These changes and rhetoric are all too familiar to immigration lawyers and others who have worked for a long time in this industry, but it certainly feels like we have reached a tipping point. With only a month of warning, employers will have to adjust to this new reality and reassess their current operations. What is their current level of reliance on low-wage temporary foreign workers? What is their appetite and ability to apply for LMIAs year after year? Similarly, low-wage temporary foreign workers must also reassess their own circumstances, especially if their current permits will soon expire and their employers will now have to apply for LMIAs under the new rules.
As noted in our most recent blog posted earlier this month (please refer to this link: https://canadian-visa-lawyer.com/employer-alert-canadas-temporary-foreign-worker-program-is-under-attack-again/), Canada’s TFWP has been the subject of longstanding scrutiny and frequent changes and amendments. Our government’s recent and frequent announcements maintain this tradition. In our experience as immigration lawyers, paring back on the TFWP will likely be short lived given longstanding demographic and economic forecasting. But with an election looming in the future, such steps are not surprising, and employers and workers need to be able to adapt to the current swing of the pendulum of changes to the TFWP.
