Canada’s New Limits on Temporary Foreign Workers Take Effect Today

The Canadian government, through Employment and Social Development Canada (ESDC), has rolled out significant changes to the Temporary Foreign Worker (TFW) program as of Thursday, which was announced in August 2024. These adjustments aim to address rising unemployment rates and ensure that more job opportunities are prioritized for Canadian workers.

One of the key changes is the suspension of Labour Market Impact Assessments (LMIAs) for the low-wage stream of the TFW program in regions where the unemployment rate exceeds 6%. This policy, aimed at reducing reliance on foreign workers, will prevent employers from hiring foreign nationals in areas experiencing higher unemployment rates.

Additionally, businesses utilizing the TFW program are now capped at hiring no more than 10% of their workforce through the program’s low-wage stream, a significant reduction from the previous 20% limit. This new restriction is designed to push employers to invest more in local talent and reduce dependency on temporary foreign workers.

Another notable change is the reduction in the duration a TFW participant can work in a low-wage position. Previously set at two years, the new rule limits these workers to a one-year employment term. This policy shift is expected to have a considerable impact on sectors that heavily rely on foreign labor, such as hospitality and retail.

However, certain industries, including agriculture, food processing, construction, and healthcare, have been granted exemptions from some of these restrictions due to their critical roles in the economy.

In Quebec, a temporary freeze on LMIA applications has been implemented for jobs that pay below the province’s median hourly wage of $27.47. The freeze, which started earlier this month, is expected to lift in early March 2024. This move comes in response to the rising unemployment rates across the province and is part of a broader strategy to protect local workers.

The new measures reflect the federal government’s ongoing efforts to manage non-permanent immigration more tightly, following a surge in the number of work and study permit holders in recent years. Employment Minister Randy Boissonnault emphasized that the adjustments are designed to support Canadian workers and ensure the integrity of the TFW program.

“As the labour market has loosened, the Government of Canada began rolling back the pandemic measures aimed at addressing an extraordinary labour shortage,” Boissonnault stated in the ESDC’s August release. “The changes we are making today will prioritize Canadian workers and ensure Canadians can trust the program is meeting the needs of our economy.”

Further changes may be introduced later this year as part of a broader review of the TFW program. These adjustments could include additional restrictions on the high-wage stream, modifications to current LMIA exemptions, and potential expansions of restrictions to rural areas not currently included in Census Metropolitan Areas (CMAs).

The ESDC has stated that it will continue to monitor labor market conditions closely and make further adjustments as needed to ensure that the TFW program remains aligned with Canada’s economic needs.

With unemployment rates on the rise, peaking at 6.4% in June, the government’s measures signal a strong shift towards protecting Canadian jobs while balancing the country’s economic needs.