The Canadian government has announced significant changes to the Temporary Foreign Worker (TFW) Program, aimed at protecting the domestic labor market and preventing abuse of the system.

Effective November 8, 2024, the starting hourly wage for workers coming to Canada through the high-wage stream will be increased by 20%. This means more jobs will fall under the stricter rules of the low-wage stream, which includes additional employer requirements for housing, transportation, and recruitment of domestic workers.

The government hopes these changes will encourage employers to hire Canadian workers, especially from underrepresented groups like youth, Indigenous people, women, and people with disabilities. Minister of Employment, Workforce Development and Official Languages, Randy Boissonnault, emphasized the importance of tapping into Canada’s untapped talent pool.

In addition to the wage increase, the government is also implementing stricter measures to prevent fraud and abuse of the TFW Program. Employers will no longer be able to use attestations from professional accountants or lawyers to prove their business legitimacy. The government will also strengthen information sharing with provincial and territorial partners to ensure only genuine job offers are approved.

The changes are expected to affect 34,000 positions, potentially leading to a decrease of 20,000 approved positions through the TFW Program. The government remains committed to monitoring the program for misuse and fraud, and may implement further adjustments as needed.

Potential Impacts of the TFW Program Changes on Foreign Workers and Employers

The recent changes to the Temporary Foreign Worker (TFW) Program are expected to have significant implications for both foreign workers and employers.

For foreign workers:

• Increased Difficulty in Obtaining Employment: The higher wage threshold for the high-wage stream and stricter rules for the low-wage stream may make it more difficult for foreign workers to find suitable employment in Canada.
• Higher Living Costs: The increased wage requirement could lead to higher living costs for foreign workers, as they may need to find more expensive accommodation or transportation.
• Reduced Job Security: With stricter regulations and a focus on hiring domestic workers, foreign workers may face increased job insecurity and a shorter duration of their temporary work permits.

For employers:

• Increased Costs: The higher wages and additional requirements for the low-wage stream could increase costs for employers, potentially reducing their profitability.
• Difficulty in Filling Vacancies: If fewer foreign workers are able to meet the new requirements, employers may struggle to fill certain job vacancies, particularly in sectors with labor shortages.
• Increased Administrative Burden: Complying with the stricter regulations and providing additional support for foreign workers will increase the administrative burden on employers.

Overall, the changes to the TFW Program are likely to have a mixed impact on foreign workers and employers. While the changes are intended to protect the Canadian labor market and prevent abuse of the program, they may also have unintended consequences for those who rely on the TFW Program.

• The low-wage stream and high-wage stream are two components of the TFW Program, differentiated by the wage level offered. There are key differences between the streams:
  • The low-wage stream is for jobs where the wage offered is below the provincial or territorial median hourly wage plus 20%. Under this stream:
    • employers must provide supports for workers that include return transportation to their country of origin and ensuring or providing suitable accommodation;
    • employers must conduct at least two additional methods of recruitment that are consistent with the occupation (targets an audience that has the appropriate education, professional experience and or skill level required for the occupation);
    • employers are limited to a temporary foreign worker complement of 10% of their workforce at any worksite (up to 20% for certain high-demand sectors); and
    • the TFW Program will not process LMIA applications for positions in Census Metropolitan Areas (CMA) where the unemployment rate is 6% or higher.
  • The high-wage stream is for jobs where the wage offered is above the provincial or territorial median hourly wage plus 20%. Under this stream:
    • there is currently no limit on the number of workers an employer can hire; and
    • CMA unemployment rates are not taken into consideration in LMIA application assessments.
• The changes announced today are forecasted to result in 34,000 positions moving from the high-wage stream to the more stringent rules of the low-wage stream. This shift could result in as many as 20,000 fewer positions being approved through the TFW Program when combined with other policies in effect as of September 26, 2024, including the following:
  • the Government of Canada does not process LMIAs in the low-wage stream in CMAs with an unemployment rate of 6% or higher (with some exceptions for high-demand sectors); and
  • employers may hire no more than 10% of their total workforce through the TFW Program (with some exceptions for high-demand sectors).
• As part of the LMIA, all job offers made by employers must be assessed to ensure that both the business and the job offer are genuine and legitimate. Applicants must provide supporting documents, as detailed on this web page: Business legitimacy – Canada.ca.
• The Government of Canada is striving to ensure better representation of under-represented groups in the Canadian labour market. Examples of challenges facing these groups include the following:
  • In September 2024, the youth unemployment rate was 13.5%, compared to the national average of 6.5%.
  • Indigenous people at all education levels had higher unemployment rates in 2023 (7.7%) than the non-Indigenous population aged 25 to 54 (4.5%).
  • In 2022, the employment rate among those aged 16 to 64 with disabilities (65.1%) was 15 percentage points lower than the rate for those without disabilities (80.1%).

Are you affected by these measurements?

If you’re affected by these changes to the TFW Program, seeking professional guidance is crucial. Our experienced immigration experts can provide tailored advice to help you navigate the new regulations and understand your options. Whether you’re a foreign worker looking to continue your employment in Canada or an employer seeking to hire temporary foreign workers, our team can assist you in finding the best solutions and staying informed about the latest updates. Get assistance here.