Recent Changes to Canada’s Temporary Foreign Worker Program (TFWP) Effective May 1, 2024

The Canadian government has implemented adjustments to the Temporary Foreign Worker Program (TFWP) aimed at prioritizing the recruitment of Canadian citizens and permanent residents while still allowing employers access to temporary foreign labour when needed. These changes came into effect on May 1, 2024, and primarily focus on two key areas:

1. Shortened Validity Period for Labour Market Impact Assessments (LMIAs):

Previously, LMIAs held validity for twelve months. This meant employers had a year to advertise a job opening and attempt to recruit qualified Canadian citizens or permanent residents before seeking a work permit for a temporary foreign worker.

Effective May 1, 2024, the validity period for LMIAs has been reduced to six months. This compressed timeframe compels employers to conduct more focused and swifter recruitment efforts within Canada before turning to the temporary foreign worker option.

2. Lower Cap on Low-Wage Temporary Foreign Workers:

Certain sectors within the Temporary Foreign Workers (TFWP) previously allowed employers to fill up to 30% of their workforce with low-wage temporary foreign workers.

As of May 1, 2024, this cap has been lowered to 20% for most employers. This signifies a stricter limitation on the proportion of low-wage temporary foreign workers that businesses can employ.

Important Exceptions to lower Cap on recruitment of Temporary Foreign Workers in Canada:

It’s crucial to note that these changes don’t apply uniformly across all sectors.

The construction and healthcare industries, for instance, will retain the higher 30% cap on low-wage temporary foreign workers.

Additionally, the cap exemption for the agriculture sector and seasonal employers remains in place. This is good news for Work Permit applicants from some countries especially from Punjab in India or Pakistan.

Overall Impact of Temporary Foreign workers Visa rules in Canada:

These adjustments are intended to encourage employers to prioritize recruiting and hiring domestic talent before resorting to the TFWP. The shortened LMIA validity period necessitates more concentrated efforts to find qualified Canadians, while the lowered cap on low-wage temporary foreign workers restricts the reliance on this specific segment of the workforce.

While the cap reduction on low-wage temporary foreign workers applies across Canada, there are some important exceptions:

Sectors:

The cap reduction to 20% applies to most sectors, but there are exemptions for healthcare and construction. Employers in these sectors can still hire up to 30% low-wage TFWs.

Locations:

• There are no specific locations exempt from the cap reduction. However, the impact will likely be felt more acutely in regions that:
• Have a shortage of domestic workers for low-wage jobs.
• Have a higher historical reliance on low-wage TFWs.

These regions are likely to be in rural areas or places with specific industries that rely heavily on TFWs, such as agriculture (which has a separate exemption) or tourism.

What would be impact of the change in Temporary Foreign Workers rules on Immigration in Canada

The impact of the cap reduction on Canadian immigration depends on the type of immigrant:

For skilled immigrants seeking permanent residence:

This could be good news. By reducing reliance on temporary foreign workers, it may open up more job opportunities for skilled immigrants seeking permanent residency. Employers who previously filled positions with TFWs may now be more inclined to consider permanent residents with similar skills.

For low-wage temporary workers:

This is likely bad news. There will be fewer opportunities for low-wage temporary workers to come to Canada under this program.

Generally, for all immigrants:

It depends on how effectively the Canadian government addresses the labour shortage. If the cap reduction leads to a significant number of unfilled positions, it could put pressure on the government to increase immigration quotas or create pathways for temporary workers to transition to permanent residency.

What would be impact on Salaries of Immigrants and Temporary Foreign Workers in Canada?

Overall, it’s a mixed bag. It could benefit skilled immigrants seeking permanent residency but make it harder for low-wage temporary workers. The long-term impact depends on how Canada adapts its immigration strategy to address the labour market needs.

The impact of the cap reduction on low-wage temporary foreign workers (TFWs) on salary earnings in Canada is a complex issue with potential for both positive and negative effects:

Potential Increase in Wages:

Reduced Labor Supply:

With fewer low-wage TFWs, the competition for these jobs might decrease. This could lead employers to raise wages to attract and retain Canadian workers.

Focus on Domestic Workers:

By prioritizing hiring Canadians, employers may invest more in training and upskilling the domestic workforce, potentially leading to higher wages in the long run.

Potential Wage Stagnation or Decrease:

Limited Impact on Supply:

The cap reduction might not significantly decrease the overall TFW numbers, especially in sectors highly reliant on them (e.g., agriculture with its separate exemption). This could limit the wage increase for Canadians.

Employer Resistance:

Employers who relied heavily on TFWs might resist raising wages, leading to wage stagnation or employers seeking loopholes to continue employing TFWs near the cap.

Uncertainties and Additional Considerations:

Automation:

Increased automation in some sectors could offset the need for more workers, regardless of nationality, potentially dampening any wage increase.

Overall, the impact on salary earnings is uncertain. It will depend on how effectively the labour market and exact response of the labour market is to be seen as to how it responds to the reduced Temporary Foreign Workers cap. If the cap reduction leads to a genuine shortage of workers, it could put upward pressure on wages. However, if employers find alternative solutions (automation, lower standards) or the domestic workforce is not readily available, wages might stagnate or even decrease.

About Post Author

Terry

See author's posts