CANADA – Major Changes to Temporary Foreign Worker Program
On 20 June 2014, the Canadian Minister of Employment and Social Development, and the Minister of Citizenship and Immigration, announced a significant overhaul of the Temporary Foreign Worker Program (TFWP). The reforms include reorganising the TFWP into two distinct programs, restricting access to the TFWP to help ensure Canadians are first in line for available jobs and introducing stronger enforcement and tougher penalties for non-compliance.
Restructuring of the TFWP
Effective immediately, the Temporary Foreign Worker Program (TFWP) will now refer to only those streams under which foreign workers enter Canada at the request of employers following approval through a new Labour Market Impact Assessment (LMIA), formerly Labour Market Opinion (LMO). Employment and Social Development Canada will be the lead department for the TFWP. The International Mobility Programs (IMP) will include those streams in which foreign nationals are not subject to an LMIA. These include work permit application processes under reciprocal free-trade agreements, as well as intra-company transfer applications. This program is mainly for high-wage, highly-skilled jobs. Citizenship and Immigration Canada (CIC) is the lead department for the IMP.
Reforms to the International Mobility Programs
Effective immediately, new guidelines have been put in place to define the “specialised knowledge” that intra-company transferees are required to demonstrate to qualify for exemption from the LMIA. The International Mobility Programs (IMP) will, by Summer 2015, include a new fee of CAD$230 for employer-specific work permits, and CAD$100 for “open” work permits. These fees will fund a new employer compliance system to monitor employers, leading to possible penalties.
Restricting Access to the TFWP
Several changes are aimed at ensuring Canadian workers are considered first for low-wage jobs under the TFWP:
Using Wage instead of National Occupational Codes
The TFWP will now be administered based on wage instead of the National Occupational Classification (NOC). Temporary foreign workers being paid under the provincial/territorial median wage will be considered low-wage, while those being paid at or above will be considered high-wage.
New Labour Market Impact Assessment
The former Labour Market Opinion (LMO) is being replaced by the Labour Market Impact Assessment (LMIA). Employers must provide additional information, including the number of Canadians that applied for their available job, the number of Canadians the employer interviewed, and why those Canadians were not hired. Employers must now also attest they are aware of the rule that Canadians cannot be laid-off or have their hours reduced at a worksite that employs temporary foreign workers.
New Labour Market Impact Assessment (LMIA) Fee
Effective immediately, the LMIA costs CAD$1000 for every temporary foreign worker position requested by an employer (up from CAD$275 for the LMO previously).
Cap on Low-Wage Temporary Foreign Workers
Effective immediately, the Government of Canada has introduced a cap to limit the proportion of low-wage temporary foreign workers that a business can employ. It is expected that this measure alone will nearly cut in half the number of low-wage temporary foreign workers, once fully implemented. Employers with 10 or more employees will be subject to a cap of 10% on the proportion of their workforce that can consist of low-wage temporary foreign workers. This cap will be applied per worksite of an employer and is based on total hours worked at that worksite. To provide employers time to transition and adjust to this new cap, it will be phased in over the next couple of years. Effective immediately, employers applying for a new LMIA will be limited to 30% or frozen at their current level, whichever is lower. This transition measure will be further reduced to 20% beginning 1 July 2015 and reduced again to 10% on1 July 2016. The Government may consider lowering the cap further in the future. Temporary foreign workers currently working at sites over the cap will be allowed to continue working at those sites until their existing work permits expire.
High-Wage Transition Plans
Effective immediately, employers who want to hire temporary foreign workers in high-wage occupations will be required (with limited exceptions) to submit transition plans with their Labour Market Impact Assessment (LMIA) application to ensure that they are taking steps to reduce their reliance on temporary foreign workers over time.
Refusing Applications in Areas of High Unemployment
Effective immediately, Employment and Social Development Canada will refuse to process certain Labour Market Impact Assessment applications in the Accommodation, Food Services and Retail Trade sectors. Specifically, any applications for positions that require little or no education or training will not be processed in economic regions with an unemployment rate at or above six percent.
Reducing the Duration of Work Permits requiring LMIA
Effective immediately, the duration of work permits set out in Labour Market Impact Assessments (LMIAs) will be limited to a maximum of one year for all low-wage positions, rather than the two year duration that existed previously. Employers of low-wage temporary foreign workers must reapply every year for an LMIA.
Ten-day Processing for Certain Occupations
Effective immediately, LMIAs for highest-demand occupations (skilled trades), highest-paid (top ten percent) occupations or short-duration work periods (120 days or less) will now be provided within a ten-business-day service standard.
Reduced Maximum Work Duration
By summer 2015, the maximum length of time that a low-wage temporary foreign worker can work in Canada will be reduced.
Stronger Enforcement and Tougher Penalties
Effective immediately, the Canadian government is massively increasing the number of inspections so that one in four employers using temporary foreign workers will be inspected each year. The scope of what inspections should cover was increased last year (from 31 December 2013). If an employer breaks the rules of the TFWP, Employment and Social Development Canada has the authority to suspend or revoke the employer’s Labour Market Impact Assessment (LMIA). Beginning in autumn 2014, the Government will impose fines of up to CAD$100,000 (depending on the severity of the offence) on employers who break the rules of the Temporary Foreign Worker Program (TFWP).
The Temporary Foreign Worker Program has been the subject of debate and controversy in Canada over the last few years. Detractors are concerned that the TFWP takes jobs away from Canadians, and there have been recent scandals related to employers abusing the system, especially in the food services sector. In 2013 the Canadian government increased application fees, introduced stricter advertising and language requirements, and expanded enforcement and penalties.
- Note the reforms to the Temporary Foreign Worker Program (TFWP) and the International Mobility Programs (IMP), especially the new fees and guidelines for the IMP; and the new fees, criteria, cap, duration limits, inspection regime, fines and other penalties for the TFWP.
- Note that, although some of the reforms have taken effect already, many will be implemented over the coming year. Further details and clarifications are expected as the reforms are implemented.