Canada to halt Low-Wage Work Permits for Temporary Foreign Workers in some cities

Starting September 26, Canada will halt processing Labour Market Impact Assessments (LMIAs) for the Low-Wage stream of the Temporary Foreign Worker Program (TFWP) in certain metropolitan areas. This move affects areas where the unemployment rate is 6% or higher. However, there will be exceptions for jobs related to food security, such as agriculture, food processing, fish processing, as well as construction and healthcare.

Employers in these areas will also face new limits. They can hire no more than 10% of their workforce through the TFWP, and the maximum length of employment for low-wage workers will be cut from two years to one year.

Randy Boissonnault, Minister of Employment, Workforce Development and Official Languages, stated that the changes aim to address an overreliance on the TFWP. “The Temporary Foreign Worker program was designed to fill labor gaps when there weren’t enough qualified Canadians for certain roles,” Boissonnault said. “Currently, more Canadians are qualified for these positions. These adjustments will help prioritize Canadian workers and ensure the program serves the economy’s needs.”

Canada's unemployment rate has been rising since April 2023, now at 6.4% as of June 2024, with 1.4 million people unemployed. Boissonnault believes the new rules will help prevent misuse and fraud within the TFWP and encourage employers to focus on training and upskilling their existing staff.

The Employment and Social Development Canada (ESDC) will also review the High-Wage stream of the TFWP over the next 90 days. This review may lead to changes affecting existing LMIA applications, sectoral exceptions, or even the rejection of some LMIA applications, including those for rural areas.

The TFWP, which has been popular among newcomers seeking work experience in Canada, requires employers to submit an LMIA to assess the impact of hiring a foreign worker on the Canadian labor market. The TFWP has two streams: Low-Wage and High-Wage. Low-wage jobs are those paying below the provincial median hourly wage.

On August 20, Quebec Premier François Legault announced similar restrictions for Montreal. Beginning September 3, Quebec and federal authorities will suspend LMIA processing for certain low-wage occupations in Montreal. Workers who meet specific criteria or who had their LMIA applications submitted before the cutoff date will be exempt from this suspension, which is expected to last for six months.

These changes reflect the Canadian government’s broader effort to address issues within the TFWP and manage the impact of temporary residents on social services and infrastructure. Both Employment Minister Boissonnault and Immigration Minister Marc Miller have criticized abusive practices by some employers who exploit temporary foreign workers and bypass Canadian candidates for cheaper labor.

In March, the ministers announced the inclusion of temporary resident levels in the annual Immigration Levels Plan, aiming to better manage the pressures on Canadian services. Additionally, a cap on international student study permits will be in place until 2026 to further regulate the number of temporary residents.