Question Period Note: Temporary Foreign Worker (TFW) Program wage requirements.

A recent article erroneously states that Canada has ended the wage assessment as part of the Labour Market Impact Assessment (LMIA) application and that they will just use the wage on the application.

The Temporary Foreign Worker Program is designed as an extraordinary and temporary measure to be used to fill critical employment gaps. The Program is to be used only when qualified Canadians and permanent residents are not able to fill job vacancies.

Prior to being permitted to hire foreign workers under the Program, prospective employers must first submit a Labour Market Impact Assessment (LMIA) application. The Labour Market Impact Assessment acts as a safeguard for worker protections by reinforcing program requirements related to wages and working conditions.  It also evaluates whether there is a valid justification and a genuine need for the employer to hire a foreign worker. To prevent wage suppression, employers are required to offer temporary foreign workers the prevailing wage for the occupation being requested.

Employers are also required to review and adjust wages annually to ensure that they continue to reflect updated regional prevailing rates, as published on the Government of Canada’s Job Bank.

Non-compliance with wage requirements can lead to significant consequences, including Administrative Monetary Penalties (AMPs) of up to $1 million annually, and/or bans from the Program.

IF PRESSED (Tightening Measures)

Tightening measures, implemented since 2023,have restricted access to the Program, particularly for positions that require entry-level skills and provide on-the-job training. This has translated to a 70% reduction in eligible applications for the Low-wage Stream and a 50% reduction overall.  

These tightening measureshave not included any changes related to how the determination of fair wages are assessed.

The hourly wage threshold used to categorize positions into Low-Wage and High-Wage Streams was raised by 20% (between $5 and $8 per hour, depending on the province or territory). By raising the wage threshold, more positions will be subject to the stricter TFW Program requirements of the Low-Wage Stream. 

This helps to ensure that employers are hiring temporary foreign workers under the proper Program stream and that the TFW Program is only used when necessary, thereby supporting Program integrity and the prioritization of domestic workers for available jobs.  

The increase has resulted in more employers being subjected to higher requirements of the low-wage stream; including transportation and accommodation requirements.

The TFW Program is one of many federal government programs that enable foreign nationals to work in Canada on a temporary basis. Others include Immigration, Refugee and Citizenship Canada’s (IRCC) International Mobility Program, and those that support international students and asylum claimants. 

Foreign nationals who participate in any of Canada’s temporary work programs, however, are often referred to as “temporary foreign workers” as an inclusive term regardless of whether they are participating in the TFW Program specifically. As a result, there is often  

conflation and misinformation surrounding the TFW Program and the overall volume of workers it contributes to in Canada's broader labour market.   

Labour Market Impact Assessment  

The TFW Program is distinct from Canada’s other temporary foreign work programs because it is an economic, demand-driven program, which requires prospective employers to submit a Labour Market Impact Assessment (LMIA) application prior to being permitted to hire a foreign national. 

The LMIA evaluates whether there is valid justification for the employer to hire a temporary foreign worker and imposes specific requirements. This includes evaluating whether the hiring of these workers would have a positive or neutral impact on the labour market. Employers, for instance, are generally required to demonstrate that they have made efforts to recruit Canadians and permanent residents before applying. This includes a requirement to advertise on Job Bank or its provincial counterpart, and, for low-wage positions, to demonstrate that efforts have been made to recruit from at least two underrepresented employment groups (e.g., Indigenous persons, vulnerable youth, newcomers, persons with disabilities, and asylum seekers with a valid work permit). 

The LMIA also acts as a first safeguard for worker protections by reinforcing program requirements related to wages and working conditions.  

Impacts on the Canadian Labour Market  

There is a public perception that the TFW Program contributes to downward pressure on wages and the displacement of domestic workers in Canada’s labour market. 

As of April 1, 2025, there were nearly 3 million non-permanent residents in Canada, with fewer than 255,000 holding a valid work permit through the TFW Program. In addressing labour market needs, the TFW Program plays an essential role in matching temporary residents to specific skills and labour gaps, particularly in rural areas where domestic workforce availability is low; making it a critical component in sustaining local economies that may otherwise face decline. This is evident in the fact that nearly 40% of positions employers were authorized to hire through the TFW Program in fiscal year 2024-25 were in rural areas. The TFW Program is also central to Canada’s food security. In 2024, 36% of positions approved were under the Primary Agriculture stream. Food processing, fish and seafood processing, and meat processing are also significant users of the TFW Program, with approximately 12,000 approved positions within these sectors in 2024. 

Other key sectors include construction and healthcare. In 2024, the construction sector accounted for 8% of all approved positions in the TFW Program, with a majority being high-wage positions. In that year, construction employers were authorized to hire approximately 19,000 temporary foreign workers. This represents about 1% of the Canada’s total construction workforce (1.63 million in 2024, according to Statistics Canada) 

Canada’s healthcare sector also continues to face chronic labour shortages in occupations such as nurses and family doctors, with nearly 80,000 job vacancies identified by the end of 2024 for health occupations (Statistics Canada). TFW Program demand for temporary foreign workers in the healthcare sector increased by nearly 6,500 positions between 2019 and 2024 (from approximately 1,400 to nearly 8,000 positions) for occupations including registered nurses and general practitioners.  

Program Tightening Measures 

The TFW Program is designed to address labour and skills shortages on a temporary basis. Program policies are reviewed regularly and adjusted to respond to changing economic and labour conditions. 

Unemployment rates in Canada began to rise in late 2023. As a result, since October 2023, the TFW Program has implemented a series of tightening measures specifically targeting low-wage positions, with a view to enhancing program integrity, restricting access to the Program, and reducing employer reliance on temporary foreign labour. Changes introduced were as follows: 

Effective October 26, 2023, the LMIA validity period (i.e. the period following an LMIA approval that an employer must submit a work permit application) was reduced from a maximum of 18 months to a maximum of 12 months. This was further reduced to 6 months in May 2024. 

In May 2024, the cap (maximum percentage of employer’s workforce that can consist of temporary foreign workers) on low-wage workers was reduced from 30% to 20% for several sectors. This was further reduced to 10% in September 2024.   

A 20% cap is maintained for occupations in food manufacturing (NAICS 311), construction (NAICS 23), and healthcare (NAICS 622 and 623) sectors; and    

Low-wage positions in the Primary Agriculture Stream, seasonal positions of less than 270 days (which provides additional flexibility for sectors like fish and seafood with surge demands during peak season), and highly mobile or truly temporary positions (120 calendar days or less) remain exempt from this measure as well.  

Effective September 26, 2024, A "Refusal to Process" (RTP) policy was implemented in census metropolitan areas (CMAs) with an unemployment rate of 6% or higher for low-wage positions. This measure applies to both seasonal (270 days or less) and non-seasonal positions.  

Positions in the Primary Agriculture Stream, and occupations in food manufacturing (NAICS 311), construction (NAICS 23), and healthcare (NAICS 622 and 623) sectors are not subject to this refusal to process.   

The maximum duration for the period of employment for workers hired in low-wage positions was also reduced from two years to one year.      

Low-wage positions in the Primary Agriculture Stream are exempted from this measure. 

Effective November 8, 2024, the wage threshold (used to determine whether an application should be processed under the Program Low- or High-wage Stream) increased by 20% for all new LMIA applications. This increase is not intended as a wage increase, but rather an increase in the delineating factor used to categorize the Low-Wage and High-Wage streams, therefore subjecting more employers to the higher requirements of the Low-wage Stream (e.g., transportation costs, ensuring access to affordable housing, etc.) 

Early indicators show that tightening measures are having the intended impact, with fewer employers having access to the Program and fewer eligible LMIA applications, with notable reductions in applications for both low- and high-wage positions, including those also seeking permanent residency. 

KEY FACTS

The article in question references a series of tightening measures implemented by the TFW Program since 2023. These measures are enhancing program integrity, restricting access to the Program, and are reducing employer reliance on temporary foreign labour.

These measures have not resulted in any changes to wage requirements.

All prospective employers are required to submit a Labour Market Impact Assessment (LMIA), prior to being permitted to hire a temporary foreign worker through the TFW Program. As part of the LMIA assessment, verification is undertaken to confirm that fair wages will be offered.

Employment and Social Development Canada (ESDC) is responsible for issuing LMIA decisions and Immigration, Refugees and Citizenship Canada (IRCC) is responsible for issuing work permits.

TFW Program employers are required to pay, as a minimum, the prevailing wage for the occupation. “Prevailing wage” is defined as the highest of:

The regional medial hourly wage for that occupation, as posted on the Government of Canada’s Job Bank;

A wage that is within the wage range paid to the employer’s current employees working in the same occupation and same work location, with the same skills and years of experience; or

The wages as defined by other publicly available labour market information that is considered to be a reliable source.

Employers are also required to annually review and adjust these wages to ensure that they continue to reflect updated regional prevailing rates, as published on Job Bank.