Temporary Foreign Workers: Median Hourly Wage Increase

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In efforts to protect the Canadian labour market and its workers, Employment and Social Development Canada (ESDC) announced that as of November 8, 2024, the federal government will be increasing the wage threshold used to determine the high-wage or low-wage stream for temporary foreign workers (TFW) needing an LMIA.

New Wage Threshold for Temporary Foreign Workers (TFW) in High-Wage Stream

On October 22^nd, Randy Boissonnault who is Canada’s Minister of Employment, Workforce Development and Official Languages, announced that there will be an increase in the reference hourly wage used to determine the stream under which a Labour Market Impact Assessment (LMIA) must be submitted. This announcement follows recent measures that have been drastically restricting access to the Temporary Foreign Workers Program (TFWP) for low-wage positions.

Starting November 8,2024, the Canadian government will require employers to offer a salary at least 20 percent above the provincial median hourly wage for the position to qualify for high wage LMIA-supported work permits. Thus, in Ontario where the current median wage is $28.39, employers will soon need to offer TFWs a minimum of $34.07 per hour to use the high wage stream. The government’s intention is to encourage employers to prioritize hiring Canadian workers while ensuring TFWs receive the compensation they deserve. As concerns arise over the impact of temporary residents on housing and living costs, this new policy aims to strike a balance that benefits everyone involved.

Already have a Temporary Work Permit (TWP)?

This announcement represents a major concern for the estimated 34,000 temporary foreign workers currently on an LMIA work permit whose position will be moved from that high-wage stream to the low wage one after November 8^th.

While existing work permits will remain unaffected, the new wage standards will apply to renewals, further reinforcing the importance of fair monetary compensation to all parties in the labor market and limiting numerous employers and workers access to the program.

What is a Labour Market Impact Assessment (LMIA)?

A Labour Market Impact Assessment (LMIA) is a document issued by Employment and Social Development Canada (ESDC) that assesses the impact of hiring a foreign national in Canada. An LMIA is notably used to demonstrate that there are no available qualified Canadian workers to fill the positions that the employer is hiring for. Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a work permit.

The starting hourly wage to use the high wage stream will be 20 per cent above the current provincial median hourly wage. This change will only apply to new LMIAs submitted by employers using the TFWP. It will not impact already submitted or approved LMIAs, nor LMIA-exempt work permits in the International Mobility Program (IMP). Lastly, the 20% increase only applies to the threshold amount; high-wage LMIA applications with an offered salary that is already at least 20% above the provincial median will continue to meet the requirements for that stream without the need to adjust the salary.

Why Has this Change Come into Effect?

This change is a result of a substantial increase in the number of temporary foreign workers. According to Immigration, Refugees and Citizenship Canada (IRCC,) 183,820 TWPs were issued in 2023 alone, showing an 88 percent increase from TWPs issued in 2019. The government’s approach is evolving by tightening eligibility criteria for temporary residents, including bans on hiring low-wage foreign workers in low-employment areas and lower caps on their share of the total workforce in other areas.

These measures reflect a commitment to maintaining a healthy labour market while acknowledging the contributions of foreign workers. For those who want to build a life in Canada, this is an opportunity to explore your options. If you are considering immigrating to Canada, it is important to stay informed about these changes and how they may positively impact your opportunities in the labour market.