Canada’s recent decision to scale back its Temporary Foreign Worker (TFW) Program, announced by Prime Minister Justin Trudeau on Monday, is set to have significant repercussions for the Indian diaspora. The move, aimed at reducing the influx of low-wage foreign workers in light of rising unemployment in Canada, is expected to impact thousands of Indians who rely on these permits to work in sectors such as hospitality, retail, and agriculture.

With Canada’s unemployment rate climbing to a 30-month high of 6.4%, Trudeau’s government is prioritizing jobs for local citizens. “The labour market has changed. Now is the time for our businesses to invest in Canadian workers and youth,” Trudeau tweeted, indicating that the new measures are meant to ease job pressures on Canadians

Impact on Indian workers
Indian nationals are among the largest groups affected by the curbs. In 2023 alone, over 26,000 Indian workers were employed in Canada under the TFW Program, primarily filling low-wage positions. Many Indians have turned to Canada as a favourable destination for employment, with Indian students and workers contributing significantly to the country’s growing foreign workforce

As part of the reforms, the Canadian government will limit the number of low-wage temporary workers businesses can hire to 10% of their workforce, down from the previous cap of 20%. This cap will exclude key sectors like agriculture, healthcare, and food processing but will hit industries where Indian workers are heavily represented.

Additionally, the maximum employment period for foreign workers in the low-wage stream has been reduced to one year, from two, further limiting opportunities for Indian nationals seeking longer-term employment in Canada.

For Indians who had viewed Canada as a stable alternative to the U.S., especially due to its immigration-friendly policies, these changes are a major setback. Over the past decade, Canada has emerged as a top destination for Indian immigrants, with many opting for temporary work permits as a pathway to permanent residency. However, these curbs are expected to slow down such ambitions.