Canada Imposes Stricter Hiring Rules for Temporary Foreign Workers

Canada has introduced tougher regulations for hiring Temporary Foreign Workers, raising wage criteria and capping the number of foreign hires to reduce reliance on foreign labor. These changes aim to prioritize Canadian workers and ensure fair labor market practices.

In an effort to strengthen its domestic labor market, Canada has introduced stricter rules for hiring Temporary Foreign Workers (TFWs). These changes, aimed at reducing reliance on foreign labor, will make it more challenging for foreign workers to secure employment and settle in Canada.

Key Changes to the Temporary Foreign Workers Program

Canada revised the Temporary Foreign Workers Program (TFW) rules, which allows employers to hire foreign workers for temporary roles when qualified Canadian workers are unavailable, to promote fairer labor conditions. Several new policies will come into effect starting in late 2024, affecting both employers and foreign workers.

1. Higher Wage Criteria for High-Wage Stream

Beginning November 8, 2024, the wage threshold for high-wage jobs will increase by 20% over the provincial or territorial median hourly wage. This adjustment will raise the wage range by $5 to $8 per hour, depending on the region.

As a result, Canadian employers may favor domestic workers over foreign hires, as employing TFWs will become significantly more expensive.

2. Reduced Dependence on Foreign Labor

The Canadian government claims the TFW Program has been exploited by some employers to avoid hiring qualified Canadians. Some firms have employed TFWs at lower wages than Canadians, suppressing wage growth and reducing job availability for local workers. The new wage rules encourage companies to prioritize hiring Canadians, supporting local employment growth.

3. Data Verification Measures

Starting October 28, 2024, the government will introduce stricter data verification methods. Employers must provide more accurate and verifiable information in their applications to ensure the processing of only legitimate job offers for foreign workers.

4. Hiring Cap for TFWs

Effective September 26, 2024, employers will be restricted to hiring no more than 10% of their total workforce through the Temporary Foreign Worker Program. This cap aims to limit over-reliance on foreign workers and create more opportunities for Canadian job seekers.

Impact of the Changes

The revised policies will shift 34,000 positions from the high-wage stream to the more restrictive low-wage stream, potentially cutting 20,000 TFW positions. These changes, along with recently announced rules, aim to further reduce the number of TFWs in the Canadian workforce.

Differentiation Between High-Wage and Low-Wage Streams

Low-Wage Stream

The low-wage stream covers jobs where the wage offered is below the median hourly wage plus 20%. Employers hiring TFWs under this stream will face several restrictions:

• They must provide return transportation to the worker’s home country.
• Employers must ensure suitable accommodation for workers.
• At least two additional recruitment methods consistent with the occupation are required.
• TFWs cannot make up more than 10% of the employer’s workforce at any worksite.
• No Labour Market Impact Assessment (LMIA) applications will be processed for positions in regions with unemployment rates of 6% or higher.

High-Wage Stream

Jobs in the high-wage stream are those offering wages above the provincial or territorial median hourly wage plus 20%. Employers in this category can hire an unlimited number of TFWs. Additionally, the government processes LMIA applications for high-wage positions without considering regional unemployment rates.

Conclusion

Canada’s updated Temporary Foreign Worker Program will create a more balanced labor market by encouraging employers to hire Canadians first and limiting reliance on foreign workers. With increased wage requirements and stricter hiring caps, the changes reflect a broader shift towards protecting Canadian workers and ensuring fair labor practices across the country.

Warm regards,

Sataish Naeem Baloch