Canada Implements Major Reforms to Temporary Foreign Worker Program to Prioritize Domestic Employment

Canada Introduces Significant Policy Changes to the Temporary Foreign Worker Program

In response to evolving labour market conditions, Canada has announced substantial modifications to its Temporary Foreign Worker (TFW) Program, slated to commence on September 26, 2024. The changes reflect the government’s intent to prioritize Canadian workers, curb the misuse of the program, and adapt to economic nuances. This article delves into the key adjustments and their anticipated impact on employers and the broader workforce.

Refusing LMIAs in High Unemployment Areas

Effective next month, the Government of Canada will no longer process Labour Market Impact Assessments (LMIAs) in census metropolitan areas with an unemployment rate at or above 6%. This measure is a strategic move to promote the employment of Canadian citizens and residents in regions battling higher unemployment rates. Currently, the nationwide unemployment rate stands at 6.4%, painting a critical backdrop to this policy shift.

Further to this, the policy change seeks to balance the scales by restricting the use of foreign temporary workers in favor of potentially more underutilized domestic labor. Exceptions, however, are carved out for specific sectors integral to food security and essential services, including primary agriculture, food processing, fish processing, construction, and healthcare.

Restrictions on Workforce Composition and Employment Duration

In a bid to mitigate dependency on foreign workers, adjustments to the workforce composition through the TFW Program will also be enforced. Employers will be restricted to hiring no more than 10% of their workforce via the TFW Program’s Low-Wage stream. This policy is aimed at encouraging businesses to focus on hiring more Canadian employees.

Concurrently, the duration for which workers can be employed under the Low-Wage stream will be reduced from two years to one. This temporal curtailment is part of a broader strategy to ensure that temporary foreign worker positions are filled by Canadians whenever possible and to deter long-term dependency on foreign labor.

As part of the wider strategy, the government has pledged to maintain a vigilant overview of the labor market, with an eye towards imposing additional reforms, particularly within the High-Wage stream. These impending reviews underscore a commitment to dynamically respond to economic conditions and workforce requirements.

Addressing Misuse, Employer Practices, and Future Policies

The forthcoming changes also target guarding against the misuse and fraud within the TFW Program. By tightening regulatory frameworks and revising policies, the government aims to foster a reliable and fair system for both employers and workers. This step is anticipated to enhance the integrity and credibility of the TFW Program.

Moreover, employers are being prompted to explore hiring a diversified cohort of Canadian workers, such as young people, newcomers, and individuals with disabilities. Additional encouragement is being given towards investing in the training and upskilling of existing employees, which aligns with the ultimate goal of reducing foreign worker dependency.

Looking ahead, Canada is on the verge of a broader immigration policy review. Discussions are set for this fall to examine potential adjustments in permanent resident levels and overall immigration quotas. This comprehensive review is seen as a critical step for addressing long-term workforce and economic sustainability.