Canada Implements Stricter Foreign Worker Rules to Prioritize Domestic Labor

Canada has introduced stricter hiring regulations for temporary foreign workers (TFWs), making it increasingly challenging for them to secure employment and establish residency in the country. These changes to the Temporary Foreign Worker Programme (TFWP) aim to create more equitable labour market conditions and decrease the reliance on foreign workers, allowing Canadian employers to recruit TFWs for temporary roles only when suitable Canadian candidates are unavailable.

Starting on November 8, 2024, the wage criteria for the high-wage stream will be revised to require that wages be set at 20% above the median hourly wage. Depending on the province or territory, this adjustment could increase wages by $5 to $8 per hour. This shift is expected to encourage Canadian employers to prioritize hiring domestic workers over TFWs, thereby enhancing local employment opportunities.

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The Canadian government has noted that the TFWP has often been exploited to bypass the hiring of qualified Canadian workers, with some employers paying TFWs lower wages than their Canadian counterparts. Such practices have stunted wage growth and reduced job availability, leaving foreign workers in precarious situations. The newly implemented regulations are designed to ensure that companies are incentivized to hire Canadians first before considering foreign talent.

In addition to wage adjustments, the government is set to increase scrutiny of employer applications to counter the submission of misleading information. Effective October 28, 2024, more rigorous data verification processes will be put in place to ensure that only legitimate employment offers receive approval.

Furthermore, beginning September 26, 2024, employers will be limited to hiring no more than 10% of their workforce through the TFWP. This cap aims to further reduce the number of foreign workers in the Canadian job market.

These adjustments are anticipated to shift approximately 34,000 roles from the high-wage stream to the more restrictive low-wage stream, potentially resulting in up to 20,000 fewer approved positions, alongside other recent policy changes.

The TFWP categorizes positions into low-wage and high-wage streams based on the wage levels offered. For jobs where wages are below the provincial or territorial median hourly wage plus 20%, employers must adhere to specific requirements. Additionally, Labour Market Impact Assessment (LMIA) applications for positions in Census Metropolitan Areas (CMAs) with an unemployment rate of 6% or higher will not be processed under the low-wage stream.

Conversely, the high-wage stream applies to positions where wages exceed the provincial or territorial median hourly wage plus 20%, with its own set of criteria.

These reforms underscore Canada’s commitment to prioritizing local employment and ensuring fair conditions within the labour market, reflecting a shift towards a more sustainable and equitable workforce strategy.

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