On October 21, 2024, Canada’s Minister of Employment, Randy Boissonnault, announced significant changes to the Temporary Foreign Worker (TFW) Program. These reforms, which will come into effect on November 8, 2024, are designed to protect Canadian workers while continuing to address the country’s labor market needs. The most notable changes include a 20% increase in the wage threshold for high-wage Labour Market Impact Assessments (LMIAs) and stricter business legitimacy verification processes.
Key Changes to the TFW Program
One of the most significant updates is the increase in the minimum wage for high-wage LMIA applications. Workers entering Canada through this stream will now need to be paid at least 20% more than the provincial or territorial median wage. Depending on the location, this could mean an hourly wage increase of $5 to $8, impacting many job offers in the high-wage stream. As a result, more employers will need to comply with the rules of the low-wage stream, which has stricter requirements, including housing and transportation provisions for foreign workers.
These changes are expected to lead to an influx of 34,000 low-wage LMIA applications, but at the same time, the government predicts a reduction of up to 20,000 approved positions due to the tightening of regulations and oversight.
Safeguarding Canadian Workers
The reforms aim to prioritize the employment of domestic workers over foreign ones. During a speech on October 17, 2024, at the 21st Century Workforce Summit, Minister Boissonnault emphasized the availability of untapped talent within Canada, such as youth, whose unemployment rate is more than double the national average, and other underrepresented groups, including Indigenous persons, women, and persons with disabilities.
The goal of these changes is to ensure that Canadian workers are given preference and that the use of the TFW Program is limited to instances where no qualified Canadians are available for the job.
New Rules for Employer Verification
Another major update to the program is a crackdown on verifying employer legitimacy. Starting on October 28, 2024, employers will no longer be allowed to use attestations from accountants or lawyers to prove their business legitimacy. Instead, the government will enhance its data-sharing agreements with provincial and territorial authorities to ensure only genuine employers are approved to hire foreign workers. This new measure aims to prevent fraud and ensure stronger protections for temporary foreign workers.
The government will continue to closely monitor the TFW Program to prevent misuse and respond to changes in the labor market, ensuring that only employers with legitimate needs can access foreign labor.
Quick Facts: Understanding the TFW Program
The TFW Program is split into two streams:
The low-wage stream is for jobs that offer wages below the provincial or territorial median wage plus 20%. Under this stream, employers are required to meet stricter rules, such as providing transportation and housing for workers, conducting additional recruitment efforts to hire within Canada, and limiting foreign workers to 10% of their total workforce. The Census Metropolitan Area (CMA) unemployment rate must also be below 6% for an LMIA application to be approved.
The high-wage stream is for jobs where the wage offered exceeds the provincial or territorial median wage by 20% or more. This stream has fewer restrictions than the low-wage stream, but with the new changes, fewer employers may qualify for this stream.
What Employers Should Expect
The changes are expected to reshape the TFW Program significantly, making it more challenging for employers to hire foreign workers under the high-wage stream. More employers will now need to navigate the additional requirements of the low-wage stream, such as proving their efforts to hire locally and offering proper support for temporary foreign workers.
The government remains committed to ensuring that only compliant employers with genuine labor needs can access the program, and further changes may be introduced if necessary to protect both workers and the integrity of the Canadian labor market. The Temporary Foreign Worker Program plays a vital role in addressing labor shortages in Canada, but the recent changes signal a shift toward prioritizing Canadian workers. The wage increases and stricter verification processes are part of the government’s broader plan to ensure that the TFW Program remains a temporary solution for labor market gaps and that employers make genuine efforts to hire from within Canada before seeking foreign labor. These reforms are expected to result in a more controlled and equitable use of the program moving forward.
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