Further Temporary Foreign Worker Program Restrictions Forthcoming

At a Glance

In line with the government's continued focus to reduce the temporary resident population in Canada, Employment and Social Development Canada has announced several restrictions to the Low-Wage stream of the Temporary Foreign Worker Program, effective September 26, 2024. The policy changes include:
- The reinstatement of the 6% Refusal to Process policy for certain low-wage occupations;
- Cap decreases for low-wage employers; and
- The reduction of the allowable employment duration for low-wage workers.
Employers will need to better manage their labour needs and may have reduced flexibility to hire foreign nationals for certain positions instead of Canadians.

The situation

In line with the government's continued focus to reduce the temporary resident population in Canada, Employment and Social Development Canada has announced several forthcoming restrictions to the Low-Wage stream of the Temporary Foreign Worker Program (TFWP).

A closer look

The below changes will be effective on September 26, 2024:

Change	Details
Reinstatement of the 6% Refusal to Process policy. The government will automatically refuse Labour Market Impact Assessments (LMIA) applications for low-wage occupations in Census Metropolitan Areas with an unemployment rate of 6% or higher, as was the rule pre-COVID-19.	In April 2022, the government ended the Refusal to Process policy for certain low-wage occupations to help employers in regions with severe labour shortages, which according to the government, have since lessened in severity. Exceptions will apply for seasonal and non-seasonal jobs in the primary agriculture, food and fish processing, construction and healthcare sectors. The LMIA is a document that employers in Canada must obtain before certain foreign nationals can apply for a work permit through the TFWP. It proves that employers have taken steps to recruit Canadians and that employing the foreign national in Canada would be beneficial to the labour market.
Cap decrease from 20% to 10% for low-wage employers. Employers will be allowed to hire no more than 10% of their total workforce through the TFWP – Low-Wage Stream, a further reduction from the current 20% cap that has been in place since May 2024.	Prior to COVID-19, the cap for low-wage employers was set at 10%, and under subsequent policies, it increased to 30% for sectors in demonstrated labour shortages in April 2022; and decreased to 20% in May 2024 when the government started revisiting temporary resident numbers. Exceptions will apply for seasonal and non-seasonal jobs in the primary agriculture, food and dish processing, construction and healthcare/caregiving sectors.
Reduction of employment duration for Low-Wage Stream workers. The maximum duration of employment for workers hired under the TFWP Low-Wage Stream will be reduced to one year, down from the current two years.	The policy allowing employers to hire workers for low-wage positions for up to two years will end on September 25, 2024, and the maximum duration of employment will be reduced to one year effective September 26, 2024 along with the other changes mentioned above.

Impact

Employers in sectors with low-wage positions will need to better manage their labour needs, may have reduced flexibility to hire foreign nationals for certain positions and may need to fill more vacancies with Canadian citizens, permanent residents or those already in Canada holding open work permits (those that allow foreign nationals to work independently or for most employers in Canada).

The exception for food, construction and healthcare sectors will address current job vacancies across these areas, which are still experiencing labour shortages.

Background

Continued goal to reduce the temporary resident population. Due to the pressure that immigration growth is presenting in areas such as housing prices, health care and infrastructure, and other labour market condition considerations, the government has been continuously adjusting the TFWP to ensure the program continues to only be used in cases where there are no workers in Canada that can fill necessary roles, which will help decrease the number of temporary workers in Canada.
Development of restrictions. As labour market conditions improve, the government of Canada has been rolling back certain measures implemented post-COVID-19 that were aimed at addressing labour shortages. Beginning in October 2023 and throughout 2024, those adjustments have included gradual reductions to the validity period of LMIAs and the cap on percentages of temporary foreign workers. More recently, Quebec suspended receipt of certain LMIA applications under the TFWP – Low-Wage Stream for six months.

Looking ahead

The government will continue to review the relevant TFWP policies as the labour market and economic conditions evolve in Canada and to ensure that only employers with demonstrable labour market needs have access to the program and there is no displacement or negative effects on Canadian workers or working conditions.

According to the government, within the next 90 days, a further review will be undertaken of the program, which could result in changes to the High-Wage stream, and further restrictions or suspensions of LMIA applications. Fragomen will continue to report on relevant developments.

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