Canada has announced an increase in the wage level for the high-wage stream of the Temporary Foreign Worker Program.

From November 8, the level will be 20 per cent higher than the current level, which is the median wage in the applicable province or territory.

It represents an increase of $5 to $8 per hour.

The effect of the change is that 34,000 positions for which work permits are issued through the TFWP will move from the high-wage to the low-wage stream of the program. Canada recently announced stricter rules for the low-wage stream, including a tighter employer cap, reduced duration of Labour Market Impact Assessments and restrictions related to unemployment rates.

The following low-wage stream limits were put in place as of September 26:

1. A Canada-wide 10 per cent employer cap on temporary foreign workers under the Low Wage Stream, including occupations that fall under the Traitement Simplifié in Quebec. The healthcare, construction, and food processing sectors will be permitted to keep a 20 per cent cap.
2. All LMIAs approved for Low Wage Stream job will allow candidates to work for one year, except for occupations under the Primary Agriculture Stream.
3. Canada will not process Low Wage LMIAs in all Census Metropolitan Areas (CMAs) with an unemployment rate of over 6 per cent, with exceptions for the healthcare, construction, and food processing sectors. This will be review quarterly, based on Labour Force Survey results.

The high-wage stream change was announced by Employment Minister Randy Boissonnault, following a review of the stream announced in August.

“This change to the Temporary Foreign Worker Program reinforces our commitment to protecting temporary foreign workers, while prioritizing the Canadian workers available to join the labour force,” he said. “By raising the threshold for high-wage stream positions, we are supporting wage growth for Canadians.”

In a further change employers will no longer be able to use attestations from professional accountants or lawyers to prove their business legitimacy as of October 28. This change is design to ensure all employers and job offers are genuine and precent misuse of the program.

The TFWP changes follow the tightening of Canada’s international student program, including placing caps on the numbers of study permits that can be issued.

Immigration Minister Marc Miller is due to announce his latest Immigration Levels Plan on November 1, which is set to include targets for temporary resident numbers for the first time.

1.  What is the Labour Market Impact Assessment (LMIA) and why is it important?

The LMIA is a crucial tool in protecting the Canadian labor market. It ensures that hiring temporary foreign workers does not negatively impact Canadian workers, such as by suppressing wages or displacing local workers. Employers must apply for an LMIA and receive a positive assessment before they can hire temporary foreign workers, demonstrating that there is a genuine need for foreign labor and no suitable Canadians are available for the role.

2. What are the differences between the low-wage and high-wage streams in the Temporary Foreign Worker (TFW) Program?

The TFW Program has two streams based on wage levels:

• Low-wage stream: Jobs offer wages below the provincial/territorial median hourly wage plus 20%. Employers must provide return transportation, suitable accommodation, and conduct additional recruitment. There’s also a 10% cap on foreign workers at each worksite (up to 20% for high-demand sectors).
• High-wage stream: Jobs offer wages above the provincial/territorial median hourly wage plus 20%. There’s no cap on foreign workers, and unemployment rates in Census Metropolitan Areas (CMAs) are not considered in LMIA assessments.

3. What impact will the recent changes to the TFW Program have on employers?

The changes announced in 2024 will result in 34,000 positions moving from the high-wage to the low-wage stream, subjecting employers to more stringent requirements. This shift could lead to as many as 20,000 fewer TFW positions being approved. Employers must ensure compliance with new rules, such as stricter limits on foreign worker complements and restrictions based on local unemployment rates.

4. What documentation is required to prove the legitimacy of businesses and job offers under the TFW Program?

To ensure that businesses and job offers are genuine, employers must submit supporting documents as part of their LMIA application. As of October 28, 2024, attestations from accountants or lawyers are no longer accepted. Instead, enhanced verification processes and information-sharing agreements with provincial and territorial partners are used to assess the legitimacy of the business and job offer.

5. How is the Canadian government addressing under-representation of certain groups in the labor market?

The Government of Canada is focused on improving representation of under-represented groups, such as youth, Indigenous persons, and people with disabilities, in the labor market. In September 2024, youth unemployment was 13.5%, more than double the national average of 6.5%. Indigenous people and those with disabilities also face higher unemployment rates. These efforts aim to encourage employers to hire from these groups before turning to temporary foreign workers.