Canada Raises Wage Threshold for High-Wage Temporary Foreign Worker Program
Canada has recently announced a significant increase in the wage requirement for the high-wage stream of the Temporary Foreign Worker Program (TFWP). Starting November 8, the wage threshold will be set 20% higher than the current rate, which corresponds to the median wage in each respective province or territory. This change equates to an increase of approximately $5 to $8 per hour.
As a result, about 34,000 job positions, previously eligible under the high-wage stream, will transition to the low-wage stream of the TFWP. Notably, Canada has implemented stricter regulations for the low-wage stream. These include a reduced duration for Labour Market Impact Assessments (LMIAs), a tighter cap on employer usage, and conditions tied to unemployment rates.
Key changes to the low-wage stream that took effect on September 26 include:
- A nationwide 10% employer cap on temporary foreign workers under the Low-Wage Stream, encompassing occupations under Quebec’s “Traitement Simplifié” system. However, the healthcare, construction, and food processing sectors are allowed a 20% cap.
- All approved LMIAs for Low-Wage Stream jobs permit candidates to work for one year, with exceptions for roles within the Primary Agriculture Stream.
- Suspension of Low-Wage LMIAs processing in Census Metropolitan Areas (CMAs) with unemployment rates over 6%, apart from sectors like healthcare, construction, and food processing. This policy will be reviewed quarterly, based on Labour Force Survey findings.
This adjustment in the high-wage stream was announced by Employment Minister Randy Boissonnault after a review initiated in August. “This change to the Temporary Foreign Worker Program is part of our commitment to safeguarding temporary foreign workers, while emphasizing employment opportunities for Canadians,” he stated. “By increasing the wage threshold for high-wage positions, we aim to support wage growth for Canadian workers.”
Additionally, employers will no longer be allowed to use attestations from professional accountants or lawyers to validate their business authenticity starting October 28. This measure aims to ensure the legitimacy of all employers and job offers, and to prevent misuse of the program.
These updates to the TFWP align with recent adjustments in Canada’s international student program, including limiting the issuance of study permits. Marc Miller, the Immigration Minister, is expected to reveal his latest Immigration Levels Plan on November 1, which will include targets for temporary resident numbers for the first time.
- Understanding Labour Market Impact Assessment (LMIA) and Its Significance
LMIA plays an essential role in maintaining the health of the Canadian labor market. It helps ensure that employing temporary foreign workers will not adversely affect Canadian employees, such as through wage reductions or job displacement. Companies need to apply for an LMIA and obtain a positive outcome before hiring foreign talent, proving that there is a real need for these workers and no qualified Canadians are available to fill the openings. - Distinguishing Between Low-Wage and High-Wage Streams in the Temporary Foreign Worker (TFW) Program
The TFW Program is divided into two categories based on wage levels:
- Low-wage stream: These positions offer wages lower than the provincial or territorial median hourly wage plus 20%. Employers must provide return travel, suitable accommodation, and conduct further recruitment efforts. Additionally, there is a 10% cap on foreign workers per location, which can extend to 20% for sectors in high demand.
- High-wage stream: These roles offer wages higher than the provincial or territorial median hourly wage plus 20%. There is no restriction on the number of foreign workers, and unemployment rates within Census Metropolitan Areas (CMAs) do not influence LMIA evaluations.
- Effect of Recent Changes to the TFW Program on Employers
The 2024 adjustments to the program will result in 34,000 positions transitioning from the high-wage to the low-wage stream, increasing requirements for employers. This change may lead to the approval of up to 20,000 fewer TFW positions. Employers need to adhere to new regulations, which include tighter foreign worker quotas and restrictions based on local unemployment data. - Necessary Documents for Validating Businesses and Job Offers in the TFW Program
To confirm the authenticity of businesses and job proposals, employers are required to provide relevant documentation with their LMIA application. Starting October 28, 2024, testimonies from accountants or lawyers will no longer be accepted. Instead, improved verification processes and information-sharing agreements with provincial and territorial entities will be utilized to validate both the business and the job offer. - Canadian Government’s Approach to Enhancing Representation of Under-Represented Groups in the Labor Market
Canada is actively working to improve the representation of marginalized groups, such as youth, Indigenous peoples, and those with disabilities, within the labor force. As of September 2024, the unemployment rate for young people was 13.5%, significantly higher than the national average of 6.5%. Indigenous communities and individuals with disabilities also encounter elevated unemployment challenges. These initiatives are designed to motivate employers to consider candidates from these groups before hiring temporary foreign workers.
