Government tightens rules for low-wage foreign workers

Credit to Author: Canadian Immigrant| Date: Wed, 18 Sep 2024 16:25:04 +0000

by Maxine Blennerhassett

The Canadian government is introducing significant reforms to the Temporary Foreign Worker Program (TFWP), effective September 26, 2024. These changes, focused on low-wage Labour Market Impact Assessments (LMIAs), are expected to have far-reaching consequences for workers and employers across the country, particularly in industries that rely heavily on foreign labour to fill low-wage positions.

The government’s decision comes in response to increasing concerns and criticism of the TFWP. By targeting low-wage industries directly, the reforms aim to reduce employers’ dependence on temporary foreign workers and encourage businesses to prioritize hiring Canadians and permanent residents.

Key changes to the TFWP

These restrictions consist of three key changes. First, low-wage LMIAs will no longer be processed in census metropolitan areas (CMAs) where the unemployment rate is 6 per cent or higher. However, industries like agriculture, healthcare and construction will be exempt from this rule. Second, employers will be limited to filling only 10 per cent of their workforce with temporary foreign workers in low-wage positions (down from the previous allocation of 20 per cent). Again, exceptions apply to the agriculture, healthcare and construction sectors. And finally, the maximum employment duration for low-wage LMIAs will be reduced from two years to one year.

Impact on low-wage workers

For newcomers or temporary foreign workers seeking low-wage jobs in major cities like Toronto, Vancouver or Edmonton, these changes could significantly impact job prospects. Given that unemployment rates in these cities often exceed 6%, employers may struggle to obtain LMIAs for low-wage roles in large urban centres, where many temporary foreign workers have traditionally been employed.

It is important to recognize that CMAs differ from cities as typically understood. CMAs, as defined by Statistics Canada, include core cities and surrounding areas with a total population of at least 100,000, of which at least 50,000 reside in the core. This means regions like Ottawa-Gatineau, St. Catharines-Niagara and Abbotsford-Mission are also affected.

Retail, hospitality and service industries in these urban areas are expected to be the hardest hit, while sectors such as agriculture, construction and healthcare will continue to offer job opportunities due to their exemptions from certain restrictions.

What workers can do

For those planning to work in Canada, it may be beneficial to focus on exempted industries like agriculture, healthcare or construction, which continue to experience labour shortages despite rising unemployment in other sectors.

Additionally, consider seeking opportunities in small towns or rural areas, where low-wage LMIAs will still be processed. These regions are subject to fewer restrictions, and many provincial nominee programs prioritize candidates in remote or rural locations, which could support long-term plans for securing permanent residency.

It is also crucial to stay informed. This update is one of several recent changes to the TFWP and the broader Canadian immigration system, with more likely to follow. These policy shifts often occur with little warning, and unemployment rates can change rapidly, making it essential for newcomers and current workers to stay updated on the latest developments and be prepared for future adjustments.

Looking Ahead

These reforms are part of a broader government initiative to phase out COVID-era policies in the TFWP. As Canada’s labour market evolves, the government is adjusting its strategies to align with current economic conditions. In a recent interview, Immigration Minister Marc Miller also hinted at further “significant” changes to permanent immigration levels, highlighting the government’s commitment to ongoing policy revisions.

It’s reported that in the coming months, labour market conditions will be closely monitored, with a review scheduled within 90 days. This could result in further updates, potentially affecting high-wage LMIAs, unprocessed LMIA applications and industry-specific exemptions. Even rural areas may face new restrictions as the government seeks to ensure the program addresses genuine labour shortages while preventing misuse.

Maxine Blennerhassett is with Canadian immigration law firm Larlee Rosenberg. 

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