Navigating TFW Program Changes: Higher Wages, Fewer Approvals

On October 21, 2024, Randy Boissonnault, who serves as Canada’s Minister of Employment, Workforce Development, and Official Languages, introduced important updates to the Temporary Foreign Worker (TFW) Program.

The primary objective of these changes is to safeguard Canadian employees while also responding to the demands of the evolving job market. The revisions include increasing the wages linked to the Labour Market Impact Assessment (LMIA) procedure and implementing more stringent guidelines for employing foreign workers. This initiative aims to motivate employers to prioritize hiring Canadian workers and also seeks to safeguard temporary foreign workers from potential fraud and exploitation.

Important Updates on Canadian Immigration Policies for Employers

Key Takeaways:

• Beginning November 8, 2024, employers utilizing the high-wage Labor Market Impact Assessment (LMIA) stream will need to offer salaries at least 20% above the median wage in their respective province or territory.
• This change is expected to drive a rise in low-wage LMIA applications, estimated at an increase of 34,000 requests. Employers in this category will face heightened compliance requirements.
• Starting October 28, 2024, employers will no longer be allowed to use attestations from accountants or lawyers to verify the legitimacy of their business operations.
• These adjustments, alongside other new policies aimed at tightening the Temporary Foreign Worker (TFW) Program, may lead to as many as 20,000 fewer job positions being approved.

Proposed Changes to the Temporary Foreign Worker Program

PL Immigration has outlined two significant updates to the Temporary Foreign Worker (TFW) Program aimed at improving its efficiency and fairness. Here are the key changes:

• Employers applying through the high-wage Labor Market Impact Assessment (LMIA) stream are now required to offer wages that are at least 20% higher than the median wage in the specific province or territory where the employment will take place.
• There is an update in the types of documents that can be submitted to demonstrate the legitimacy of a business.

Let’s dive into these changes in more detail:

Updated Wage Guidelines for LMIA Applications

Starting November 8, 2024, the wage benchmark for Labor Market Impact Assessment (LMIA) applications in Canada will undergo significant changes. Specifically, the median wage that determines eligibility for the high-wage or low-wage stream will rise by 20% compared to the current median wage in each province or territory.

What the New Wage Requirements Mean

These changes are crucial for those looking to apply through the LMIA process, as they directly impact the categorization of job offers. High-wage positions are typically more favorable and have different requirements compared to low-wage positions. Understanding and adapting to these new wage criteria will be essential for successful applications.

Recent changes are poised to shift more immigration applications to the low-wage category, which comes with stricter stipulations such as additional housing and transportation requirements, and limits on the number of foreign workers an employer can hire.

According to Boissonnault, the objective of these modifications is to stimulate wage growth for Canadians and ensure the protection of vulnerable foreign workers from potential exploitation. This policy adjustment is anticipated to redirect approximately 34,000 applications from the high-wage category to the low-wage stream.

Establishing Business Legitimacy

Starting October 28, 2024, the process for verifying business legitimacy in most LMIA applications will change significantly. Notably, confirmations from accountants or lawyers will no longer be acceptable proof of a business’s legitimacy.

Validating business authenticity is a critical step for Labor Market Impact Assessment (LMIA) applications, ensuring that the job offer is both genuine and legitimate. Employers must demonstrate that:

• Their business is actively operating in Canada, providing goods or services.
• The job offer is crucial to fulfilling their business needs.
• They are capable of adhering to all terms and conditions outlined in the job offer.
• They comply with all program regulations and requirements.

Failure to meet any of these criteria will result in the rejection of the LMIA application.

After the new regulation takes effect, employers must furnish alternative approved documentation, such as:

• A current municipal, provincial, or territorial business license.
• The latest T4 Summary of remuneration paid.
• The most recent T2 Schedule 100 Balance Sheet and T2 Schedule 125 Income Statement.

The government will also collaborate with provincial and territorial authorities and use employer registries to confirm the authenticity of a business.

Overview of Recent TFW Program Updates

At PL Immigration, we want to ensure you’re informed about the latest changes to Canada’s Temporary Foreign Worker (TFW) Program since September 2024:

• The Government of Canada has stopped processing Labour Market Impact Assessments (LMIAs) for low-wage jobs in Census Metropolitan Areas (CMAs) where the unemployment rate is 6% or more, unless the positions are in high-demand sectors.
• Employers can only fill up to 10% of their workforce with TFWs, though there are exceptions for industries in high demand.
• To confirm their business legitimacy, employers can no longer rely on attestations from accountants or lawyers.
• The median wage threshold that categorizes positions as low-wage or high-wage will increase by 20%.

These adjustments aim to reduce TFW Program approvals by about 20,000 and emphasize the government’s dedication to protecting the Canadian labor market, as well as the rights of temporary foreign workers.

Stay tuned for further updates as the government continues to evaluate labor market trends and the TFW Program’s economic effects.