Canada Considers Capping Low-Wage Temporary Foreign Worker Applications

Employment and Workforce Development Minister Randy Boissonnault announced Tuesday that the federal government is contemplating a policy change that would reject temporary foreign worker (TFW) applications for low-wage positions, according to his office.

This potential shift aims to ensure that only jobs paying at least the median hourly wage in each province and territory are eligible for TFWs. These wages range from $24 per hour in Prince Edward Island and Nova Scotia to $39.24 per hour in the Northwest Territories.

“I’ve been clear over the last year, abuse and misuse of the TFW program must end. The health and safety of temporary foreign workers in Canada is a responsibility I take very seriously,” Boissonnault stated in a media release. He emphasized that “bad actors” are exploiting the program, thereby harming legitimate businesses, and that new reforms are being implemented to prevent fraud and misuse.

The minister’s meeting on Tuesday included representatives from the food and beverage, transportation, and agriculture sectors. Kristina Farrell, CEO of Food and Beverage Canada, expressed concern that this policy change could severely impact the food processing industry. “Obviously if that applied to food and beverage manufacturing, it would be a crisis,” she told CBC News. “At the end of the day, that would have an impact on the price of food.”

The number of TFWs in the food processing sector is challenging to estimate as it fluctuates annually. In the 2023-24 fiscal year, fines issued under the TFW program exceeded $2 million, marking a 36 percent increase from the previous year. This surge in fines is partly due to the sale of fraudulent labour market impact assessments (LMIAs), with prices ranging from $30,000 to $60,000, according to Manan Gupta, president of Skylake Immigration in Brampton, Ontario.

An employer must submit an LMIA to hire a TFW, demonstrating the inability to find a qualified Canadian for the position within 28 days. While the processing fee for an LMIA is $1,000, fraudulent LMIAs are being sold to boost scores in Canada’s express entry immigration system. Although agriculture remains the largest sector employing TFWs, sectors like healthcare, food service, and construction have seen significant increases in TFW employment since 2018.

Gupta highlighted the need for stronger enforcement to eliminate fraud and abuse within the TFW program. “The government knows that there are a lot of loopholes, a lot of abuse. The proof will be in the pudding, what comes ahead and what kind of enforcement measures the government does finally take,” he said.

Boissonnault’s office mentioned several measures to address these issues, including stricter oversight in high-risk areas, potential increases in LMIA fees, and ensuring TFWs do not exceed 20 percent of a company’s workforce.

Restaurants Canada, represented at the meeting by CEO Kelly Higginson, stressed the importance of TFWs in tourism-dependent regions. Higginson noted that TFWs, though not a primary hiring focus for the broader restaurant industry, are crucial for maintaining local economies in such areas.

She also pointed out that the restaurant industry, valued at $115 billion in Canada, could suffer significantly from these policy changes. Nevertheless, Higginson expressed support for stricter LMIA oversight, saying, “There’s been the odd operator that [doesn’t] follow the rules … really, they have no place in our industry and we support strong penalizing of these people.”

The number of approved TFW applications has surged in recent years, with 239,646 approvals last year, more than double the 108,988 approved in 2018. According to a May report by Statistics Canada, one in ten TFWs earned less than $7,500 annually in 2019.