Question Period Note: TEMPORARY FOREIGN WORKER PROGRAM: LABOUR MARKET RESPONSIVENESS AND PROGRAM USAGE

Potential stakeholder concerns that Canadian employers are relying on labour through temporary work entry programs (such as the Temporary Foreign Worker (TFW) Program) and are not prioritizing Canadians and permanent residents for jobs.

• The Government of Canada is committed to ensuring that jobs for Canadians and Permanent Residents are prioritized.
• The Temporary Foreign Worker (TFW) Program allows employers to fill short-term labour market gaps when Canadians and permanent residents are not available, and is designed to be responsive to changing labour market conditions.
• Over the last year, a series of tightening measures have been implemented under the TFW Program to restrict access to the Program.
• In total, temporary foreign workers employed under the TFW Program account for approximately 1% of Canada’s overall workforce.

• These workers play a crucial role in key sectors that face serious labour shortages, including agriculture, food processing, construction, and tourism.
• We are closely monitoring labour market conditions and will consider further TFW Program adjustments as appropriate.

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.
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, Refugees 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 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.
There is a public perception that the TFW Program is putting increased burden on Canada’s housing market, downward pressure on wages, and stressing Canada’s social support systems including healthcare. In reality, however, of the over 3 million temporary residents that came to Canada in 2024, only approximately 250,000 entered Canada through the TFW Program.
Labour Market Impact Assessment
The TFW Program is distinct from Canada’s other temporary work programs because it is an economic, demand-driven program, which requires prospective employers to submit a Labour Market Impact Assessment (LMIA) 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 assessing the labour market factor impacts associated with the hiring of temporary foreign workers. 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, 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 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.
LMIA applications are prioritized based on the sector, stream, and the received date of the application. Service Canada officers assess applications based on a variety of factors, including genuineness of the employer and the job offer, its potential impacts on Canada’s labour market, and the employers past track record for worker protections and history of compliance with program requirements.
Between 30-50% of all LMIAs are selected to undergo an Enhanced Assessment (EA) process; which is a more rigorous assessment on specific elements of the LMIA process. If officers identify any issues or concerns with an application, they can complete an EA, thereby increasing the rigour of the assessment. The EA process can include having targeted conversations with the employer, and, where required, soliciting additional written explanations, justifications, and/or documentation.

Program Tightening Measures
In March 2024, the Government of Canada committed to decreasing the percentage of temporary residents from 6.5% to 5% of Canada’s overall population by the end of 2026, including temporary foreign workers and international students. This commitment was reaffirmed in the 2025-2026 Immigration Levels Plan, released by Immigration, Refugees and Citizenship Canada, in October 2024. This Plan included, for the first time, temporary residents. The Immigration Levels Plan outlined the targets for Canada’s temporary population, with an expected decline of approximately 900,000 temporary residents over the course of 2025 and 2026.
In August 2024, new tightening measures were announced to enhance TFW Program Integrity, address Program misuse, and to prevent the TFW Program from being used to circumvent the hiring of available workers in Canada. These measures include:
• Enforcement of the consistent application of the 20% cap policy for temporary foreign workers between the Low-Wage and Low-Wage Dual Intent streams of the TFW Program.
• Application of a stricter and more rigorous oversight in high-risk areas when processing LMIAs and when conducting inspections.
• Consideration of LMIA fee increases to pay for additional integrity and processing activities and to implement future regulatory changes regarding employer eligibility (factors such as a minimum number of years of business operations or history of lay-offs by the employer).
Additional tightening measures were in effect as of September 26, 2024:
• The Government has been refusing 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 manufacturing, construction, and healthcare sectors).
• Employers are limited to hire no more than 10% of their workforce at a given location through the Low-Wage stream of the TFW Program (with certain exceptions for the food manufacturing, construction, and healthcare sectors, and seasonal positions under 270 days).
• The maximum duration of employment for workers hired through the Low-Wage stream was reduced to one year (from two years). In October 2024, the Government of Canada announced further key adjustments to the TFW Program aimed at better protecting both workers and the Canadian economy:
• In effect as of October 28, 2024, employers are required to provide verifiable documentation for business legitimacy, instead of relying on attestations from lawyers or charted accountants. Restrictions placed on the type of acceptable documentation used by employers to support their LMIAs will help reduce program misuse and ensure that only genuine job offers are approved.
• In effect as of November 8, 2024, 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.
Early indicators show that tightening measures are having the intended impact on LMIA volumes, with notable reductions in applications for both low- and high-wage positions, including those also seeking permanent residency.
Given there were a number of temporary foreign workers already in Canada at the time of the implementation of these measures, and that LMIA applications submitted prior to the effective date of certain measures will still be processed and current LMIA processing times are up to 6 months for certain positions, the expected reduction in approved LMIA volumes will not fully materialize until later in 2025; with reductions in the number of overall volumes of temporary foreign workers in the country beginning to decline in late 2025.

If Pressed (Tightening Measures Implementation)
• Over the last year, the TFW Program has implemented a series of tightening measures to restrict access to the Program.
• These include:
o a "refusal to process" (RTP) policy in census metropolitan areas with an unemployment rate of 6% or higher;
o a 10% cap for Labour Market Impact Assessments (LMIAs) in low-wage streams (with exceptions for seasonal and non-seasonal jobs in food security sectors, as well as health care and construction); and,
o a 20% increase to the wage threshold used to determine the applicable stream under the TFW Program, thereby likely capturing more workers under the more stringent requirements of the Low-wage Stream.