Key Changes to Canada’s Temporary Foreign Worker Program

Author: Al Parsai, LL.M, RCIC-IRB

Last Updated On: October 25, 2024

The Government of Canada recently announced several key changes to the Temporary Foreign Worker (TFW) Program, aimed at better protecting Canadian workers while ensuring the labour needs of employers are met. These changes significantly impact low- and high-wage streams, altering wage requirements and employer obligations. Below is a comprehensive summary of the updates and their implications for employers, workers, and the broader Canadian economy.

One of the most important updates relates to changes in median hourly wages across different provinces and territories, effective November 8, 2024. The Government of Canada has raised the threshold for the high-wage stream by 20% over the previous provincial or territorial median wage, as shown in the updated wage table below:

These new wages reflect the government’s efforts to align foreign worker wages with growing labour demands and economic changes, ensuring better support for Canadian workers. Please note that the wage calculations after November 8th are our estimation based on the Government’s announcement.

Overview of Changes to the Temporary Foreign Worker Program

The updated median hourly wage table is part of a broader set of reforms to the TFW Program. Below are the other key changes announced:

Increased Wage Requirement for High-Wage Stream

Effective November 8, 2024, the starting hourly wage for workers in the high-wage stream must now be 20% higher than the current level, corresponding to the median wage in the applicable province or territory. This means an hourly increase of between $5 and $8, depending on the specific region.

More Jobs Subject to Low-Wage Stream Rules

The increase in the wage threshold for the high-wage stream means that more jobs will now be classified under the low-wage stream, making them subject to stricter requirements. These include additional employer obligations related to providing adequate housing and transportation and efforts to recruit workers already present in Canada.

Prioritizing Domestic Workforce

The reforms aim to enhance the prioritization of domestic workers. Minister Randy Boissonnault emphasized that employers have access to untapped pools of talent in Canada, particularly youth, Indigenous persons, women, and persons with disabilities. For example, the youth unemployment rate is currently more than double the annual average, highlighting a need for better inclusion in the workforce.

Removal of Attestations for Business Legitimacy

Starting October 28, 2024, employers can no longer use attestations from professional accountants or lawyers to prove their business legitimacy. Instead, the TFW Program will rely more heavily on information-sharing agreements with provincial and territorial partners and existing employer registries to ensure only genuine and legitimate job offers are approved.

Enhanced Data Sharing

The government will also enhance data-sharing through partnerships with provincial and territorial bodies. This will ensure more efficient detection of misuse within the program and increase protection for workers from fraud and exploitation.

Stricter Monitoring of Employers

While most employers use the TFW Program appropriately, the government will continue to monitor it for misuse and fraud. Only employers with a demonstrable need for temporary foreign workers will be permitted to participate, thus maintaining the program’s integrity.

Impact on Number of Approved Positions

The changes are estimated to shift 34,000 positions from the high-wage stream to the more restrictive low-wage stream. When combined with other policies, such as not processing Labour Market Impact Assessments (LMIAs) in regions with 6% or higher unemployment rates, this could result in 20,000 fewer TFW positions being approved.

Limitation on Temporary Foreign Worker Workforce

Employers are limited to hiring at least 10% of their workforce through the TFW Program’s low-wage stream, with certain exceptions for high-demand sectors. This measure seeks to reduce overreliance on temporary foreign workers in sectors that should ideally source labour domestically.

A Focus on Canadian Workers and Vulnerable Groups

These changes align with the TFW Program’s overall goals—protecting Canadian workers and ensuring that temporary foreign labour is only used as a last resort when Canadian workers are unavailable. The emphasis on hiring domestic workers aligns with efforts to reduce unemployment among under-represented groups:

• In September 2024, the youth unemployment rate was 13.5%, more than double the national average of 6.5%.
• Indigenous people faced an unemployment rate of 7.7% in 2023, compared to 4.5% for the non-Indigenous population aged 25 to 54.
• The employment rate for persons with disabilities was 15 percentage points lower than for those without disabilities.

Final Words

The changes to Canada’s Temporary Foreign Worker Program reflect the government’s commitment to prioritizing Canadian workers while ensuring businesses can access the talent they need. By increasing wages and subjecting more positions to the stricter low-wage stream requirements, the government aims to balance the economic demands of employers with the need to protect Canadian workers and provide greater opportunities for under-represented groups.

Employers participating in the TFW Program need to review these changes and understand how they affect both high-wage and low-wage streams. The overarching goal is to ensure that all parties—workers, employers, and the broader Canadian economy—benefit from a fair and well-regulated labour market.

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