New regulations for Canada’s Temporary Foreign Worker (TFW) program have come into effect, marking significant changes. As outlined by Employment and Social Development Canada (ESDC) in August, these revisions were implemented this past Thursday.
Under the new rules, the federal government will no longer process Labour Market Impact Assessments (LMIAs) for the TFW program’s low-wage stream in regions with an unemployment rate of 6% or higher. This means employers in these areas, for the most part, will not be able to hire temporary foreign workers while local unemployment remains elevated.
Another key update involves a stricter cap on the number of temporary foreign workers businesses can employ. Employers are now limited to hiring only 10% of their workforce through the TFW program’s low-wage stream, down from the previous 20%. Moreover, the maximum employment period for low-wage TFWs has been reduced from two years to one year.
These changes primarily affect employers and workers in low-wage roles under the TFW program, specifically jobs paying less than the median hourly wage in the province or territory where the work is located. Certain industries, both seasonal and non-seasonal, such as agriculture, food processing, construction, and healthcare, may be exempt from some of these restrictions.
In addition, a temporary freeze on LMIA applications took effect earlier this month in Montreal and will remain in place until March 3. This freeze applies to positions offering hourly wages below Quebec’s median rate of $27.47.
The impetus behind these changes comes from the federal government’s broader effort to tighten regulations around temporary immigration, following years of growth in the number of work- and study-permit holders in Canada. These recent adjustments are part of a gradual tightening that has been in progress since October 2023. At that time, the TFW cap was reduced from 30% to 20%, and with the latest changes, the cap has dropped further to 10%.
A statement from the ESDC highlights the government’s rationale, explaining that as Canada’s labor market has shown signs of easing, it became necessary to scale back the temporary measures introduced during the pandemic to address labor shortages. “Employers in Canada have a responsibility to invest in the full range of workers available in this country,” the release reads.
Employment Minister Randy Boissonnault emphasized that the TFW program was always intended to address labor shortages only when qualified Canadian workers were unavailable. “The changes we are making today will prioritize Canadian workers and ensure the program continues to meet the needs of our economy,” he said.
Looking ahead, ESDC plans to closely monitor labor market conditions and implement further changes to the TFW program if necessary. A comprehensive review is expected later this year, with the possibility of additional adjustments impacting the high-wage stream, as well as current exceptions for specific sectors and even rural areas outside Census Metropolitan Areas (CMAs). As of 2023, approximately one-quarter of Canada’s population, or about 10 million people, live outside of a CMA.
