Changes to Canada’s System for Foreign Workers – The Temporary Foreign Worker Program

On June 20, 2014, the Hon. Jason Kenney (Employment and Social Development) and Chris Alexander (Citizenship & Immigration Canada) announced significant changes affecting foreign workers in Canada.  For Canada’s Temporary Foreign Worker Program (“TFWP”), the three pillars are:

  1. Limiting access;
  2. Tightening labour market assessment; and
  3. Stronger enforcement.

Some of the changes took effect immediately while other changes are scheduled to be introduced by the end of 2015.  For employers, some of the most significant changes to the TFWP are:

  1. Labour Market Impact Assessments:  The labour market opinion will now be known as “Labour Market Impact Assessment” (“LMIA”).  Applying for an LMIA will be a more “comprehensive and rigorous” process.
  1. Application Fee Raised to $1,000.00:  The cost of hiring a temporary foreign worker (“TFW”) per position requested by an employer has been increased by almost 400% from $275 to $1,000.00.  Hiring a TFW will be an even greater investment for employers as will the importance of submitting an effective application from the outset.
  1. No LMIAs in Areas of High Unemployment:  There will be a ban on LMIAs for certain “Accommodations & Food Service or Retail Sales” occupations in regions with an unemployment rate over 6%.
  1. High Wage / Low Wage Distinction:  The TFWP will now be administered based on whether a TFW’s wage falls above or below the relevant provincial median.
  1. 10% Cap on Total Permitted Low Wage TFWs:  Employers with 10 or more employees applying for new LMIAs will now face a cap of 10% on the proportion of their workforce that can consist of low-wage TFWs.  For employers currently over the cap, this will be phased in such that employers will be limited to 30% of their current level, whichever is lower.
  1. Advertising for Low Wage Positions:  Employers hiring for low-wage occupations need to demonstrate that they have made efforts to hire Canadians from under-represented groups in the work force, such as youth or Canadians with disabilities.
  1. Transition Plans for High Wage TFWs:  Employers of high wage TFWs must submit a transition plan showing that they are taking steps to reduce their reliance on temporary foreign workers such as investing in skills training for Canadians or proof that they are assisting a high-skilled TFW to become a Canadian permanent resident.   [NTD: FSW (A/E) and BC PNP’s strategic occupations stream may take on even greater importance – I wonder if this is the intended direction of express entry]
  1. Additional Recruitment Activities:  Employers will now be expected to reach out to organizations serving groups traditionally underrepresented in the workforce (e .g . new immigrants, Aboriginal people, youth, Canadians with disabilities) to fill available jobs.
  1. Time Limits for Low Wage TFWs:  Low wage TFWs will now be limited to 1-year work permits which means that employers must obtain new LMIAs ever year for their low wage TFWs.In addition, low wage TFWs will have a limit placed on how many years they can work in Canada under an LMIA.  This will mean that TFWs who cannot transition into high wage work or permanent residence will only be able to stay in Canada for a limited time.
  2. Increased Compliance Inspections:  25% of all employers with LMIAs will now be subject to randomly selected compliance inspections.
  3. Highest Demand, Highest Paid or Shortest Duration TFWs:  A 10-day service standard will be provided for LMIAs with wages at or above provincial medians for skilled trades, occupations with wages in the top 10% of a province’s wages earned by Canadians, or for positions that will last only for 120 days or less.

All of these changes are taking place in a shift that will see stricter enforcement and harsher punishment of employers who breach their requirements under the TFWP.

Many details on how these changes will be implemented are still forthcoming but it will be important to give them careful consideration.

It is more important than ever to obtain professional advice when hiring foreign workers.  At Lowe & Company, we have helped employers bring in foreign workers for over 20 years.  If you would like to see how these changes apply to your business, please contact Mr. Rick Che in client services to arrange a consultation with one of our professional advisors.