Canada Immigration: New Wage Rules in Canada Are Reducing Jobs for Foreign Workers

For many years, Canada’s Temporary Foreign Worker Program has been successful in boosting the country’s economy and addressing unemployment. Regretfully, the government has added new limitations to the Temporary Foreign Worker Program as a result of an increase in allegations of employer misconduct and fraud.

Employment and Social Development Canada (ESDC) limited the number of low-wage temporary foreign workers that companies could hire in the fall of 2024. Both businesses and foreign workers are impacted by changes to Canada’s Temporary Foreign Worker (TFW) policy.

Why did Canada impose further TFWP restrictions?

The Temporary Foreign Worker Program (TFW), especially the Low-Wage Stream, has seen a rise in fraud and abuse, prompting additional limitations. The adjustments also take into account the changing economic landscape and a renewed emphasis on bolstering Canada’s domestic labor force.

What modifications have been made to Canada’s Temporary Foreign Worker Program?

Effective September 26, 2024, the following modifications were implemented:

Applications for Labour Market Impact Assessments (LMIAs) from Canadian employers in urban areas with an unemployment rate of 6% or more will be denied. Seasonal and non-seasonal employment in the food security (primary agriculture, food processing, and fish processing) and construction industries are exempt.

Employers may use the TFW Program (Low-Wage Stream) to hire no more than 10% of their overall workforce. Compared to the initial 30% overall workforce permit, this represents a decrease.

Seasonal and non-seasonal employment in the food security (primary agriculture, food processing, and fish processing) and construction industries are exempt. TFW-Low-Wage Stream employees are not allowed to make up more than 20% of the workforce in certain industries.

The two-year maximum employment time that was previously permitted for workers hired through the Low-Wage Stream has been lowered to one year.

How has the High-Wage Stream changed?

Employers must pay temporary foreign workers in the high-wage stream at least 20% more than the median salary for their position as of November 8, 2024. The province and industry in which the employer works may have an impact on the minimum salary. Depending on the industry, temporary foreign workers will receive an hourly wage increase of $5 to $8 as a result of this increase.

The LMIA Application Procedure Changes

Employers used to accompany their LMIA application with an attestation letter to demonstrate the validity of their business and employment offers. A lawyer or chartered professional accountant (CPA) could sign these attestation letters.

However, employers will no longer be able to use attestations to demonstrate the validity of their businesses as of October 28, 2024. Rather, they have to take advantage of the information-sharing contracts that are already in place with job registries and provincial and territorial partners.

What are the changes to Canada’s Temporary Foreign Worker Program that employers need to be aware of?

The ESDC described the following modifications to the TFW program on August 6, 2024:

• Implementation of the temporary foreign worker 20% cap policy. For temporary foreign workers who plan to petition for permanent residency, this includes the “Dual Intent sub-stream” policy.
• Stricter, more stringent regulation in high-risk occupations when it comes to employer inspections and the completion of Labor Market Impact Assessments (LMIAs).
• Potential future revisions to the regulations about employer eligibility (e.g., a minimum number of years of firm operations or a history of layoffs).

Noncompliance can result in fines ranging from $500 to $100,000 per infraction or a permanent prohibition from using the International Mobility Program or the Temporary Foreign Worker Program to hire temporary workers. A violation of the policy might result in monetary penalties of up to $1 million over one year.

Who is affected by Canada’s new TFWP regulations?

The limitations and modifications to the TFWP will have a significant effect on both employers and temporary foreign workers. The following modifications were made between August 6 and September 26:

• Increased scrutiny: Employers in high-risk locations with a history of non-compliance will be subject to closer monitoring and inspections.
• Penalties have increased: In response to a 36% rise in fines against non-compliant businesses for the 2023–2024 period over the prior year, employers may now be subject to warning letters, fines of up to $1 million per year, and even program termination.
• Modifications to recruitment tactics: Companies need to review and adjust their recruitment tactics aimed at foreign nationals. It may be necessary for employers in low-wage industries to hire more Canadian citizens, permanent residents, or other residents to fill open positions.
• Added strain or responsibility on employers and foreign nationals: Once they receive a positive Labour Market Impact Assessment (LMIA), the TFW program’s length is shortened, which puts further pressure on them to submit their immigration petitions and supporting documentation on time. Additionally, it can raise doubts about a foreign worker’s “maintained status” and legal employment in Canada.

To monitor and manage the status of immigration petitions and make sure foreign workers have the legal right to work in Canada, employers may need to review their hiring procedures.