Question Period Note: TEMPORARY FOREIGN WORKER (TFW) PROGRAM TIGHTENING MEASURES

Unemployment rates in Canada have risen over the past year, prompting public concerns that Canadian employers are relying on labour through temporary work entry programs and not prioritizing Canadians and permanent residents for jobs

• The Government of Canada is committed to ensuring that jobs for Canadians are prioritized.
• On August 26, 2024, the Government announced a series of tightening measures in response to rising unemployment rates.
• These changes will help limit the number of temporary foreign workers coming to Canada, while ensuring employers in high-demand sectors crucial to our economic growth remain supported.
• The recent changes are also intended to help increase program integrity, to better address TFW Program misuse, and to reduce employer reliance on foreign labour.
• The Government is closely monitoring labour market conditions and will consider further TFW Program adjustments should they be required.

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.
To access the TFW Program, prospective employers must submit an LMIA to the Government. An LMIA evaluates whether there is valid justification for the employer to hire a temporary foreign worker and imposes specific requirements. Employers, for instance, are 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 demonstration 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 is an important tool that not only serves to protect the Canadian labour market, but also acts as the first safeguard for worker protections. It reinforces program requirements related to wages and working conditions, employment standards, and employer obligations.
COVID-19 Economic Recovery and Labour Shortages
Canada’s economy experienced a strong recovery from the COVID-19 pandemic. As businesses rebounded, the economic recovery outpaced employers’ ability to find sufficient workers. Low unemployment rates, paired with increasing job vacancies, led to an extremely tight labour market with historic labour shortages.
To help employers address the widespread vacancies across major sectors and to keep businesses operating, the Government of Canada first announced the Workforce Solutions Roadmap in April 2022. This suite of temporary and permanent measures included increasing workforce caps on the percentage of workers that could be hired by employers through the TFW Program and extending the duration of the validity period of the LMIA. The Workforce Solutions Roadmap was updated and extended over a two-year period, with time-limited measures ending in May 2024 as job vacancy rates declined and unemployment rates increased. Since early 2024, the Government began rolling back TFW Program measures to better reflect labour market realities.
Recent Program Tightening Measures
On August 6, 2024, new measures were announced to address TFW Program misuse, and to prevent the TFW Program from being used to circumvent the hiring of available workers in Canada. This announcement included commitment to enforcing the consistent application of the 20% cap policy for temporary foreign workers between the Low-Wage stream and the Low-Wage dual intent sub-stream, and the application of increasingly strict and rigorous oversight when processing LMIAs in high-risk areas. The announcement also noted that consideration was being given to LMIA fee increases to fund additional integrity and processing activities, and the intention to implement future regulatory amendments focused on employer eligibility. Current exemptions under the dual-intent stream are also being removed, which will contribute to improved program integrity and require employers to comply with requirements that currently apply to other streams (e.g., Low-Wage stream) when requesting dual-intent positions.
On August 26, 2024, further tightening measures were announced. Effective September 26, 2024, the Government will refuse to process LMIAs in the Low-Wage positions, applicable in census metropolitan areas with an unemployment rate of 6% or higher (with certain exceptions for the food security, construction, and healthcare sectors). Further, employers will be allowed to hire no more than 10% of their total workforce through the TFW Program (with certain exceptions for the food security, construction, and healthcare sectors), and the maximum duration of employment for workers hired through the Low-Wage stream will be reduced to one year (from two years). Within the next 90 days, further review will be undertaken of the Program, which could result in changes to the High-Wage stream, to existing LMIA applications for which positions have not been filled, to sectoral exceptions, or refusing to process other LMIA applications, including for rural areas.

If Pressed (Tightening Measures Implementation)

• The Government is rolling back TFW Program measures that were implemented when employers faced severe labour shortages following the COVID-19 pandemic.
• Effective September 26, 2024, employers will be subject to a cap of 10% of their total workforce, for workers hired under the low-wage stream.
• Further, the Government will refuse to process LMIA’s for low-wage positions in census metropolitan areas with an unemployment rate of 6% or more.
• Certain exceptions will be granted for critical sectors that are still facing chronic labour shortages, such as food security, construction, and healthcare.