Canada has recently announced increasing the minimum hourly wage requirements for the high-wage stream of the Temporary Foreign Worker Program (TFWP). From November 8 onwards, applicants applying via the high-wage stream of TFWP will be eligible only if they draw hourly salaries at least 20% higher than the median wage for the position corresponding to their work. This causes an increase in the threshold of wages by $5 to $8 per hour, varying by province or territory.
This reform will affect up to 34,000 workers across the country who will shift from the high-wage stream to the stricter rules of the low-wage stream, as predicted by the Canadian government. Only 20,000 positions could be approved through the TFWP as a result of the stringent new policies in place.
Major Policy Updates
New High-Wage Stream Requirements
Canada has recently announced increasing the minimum hourly wage requirements for the high-wage stream of the Temporary Foreign Worker Program (TFWP). From November 8 onwards, applicants applying via the high-wage stream of TFWP will be eligible only if they draw hourly salaries at least 20% higher than the median wage for the position corresponding to their work. This causes an increase in the threshold of wages by $5 to $8 per hour, varying by province or territory.
Impact Assessment
This reform will affect upto 34,000 workers across the country who will shift from the high-wage stream to the stricter rules of the low-wage stream, as predicted by the Canadian government. Only 20,000 positions could be approved through the TFWP as a result of the stringent new policies in place.
Administrative Changes
Minister of Employment, Workforce, Development and Official Languages, Randy Boissonnault said that the government is supporting wage growth for Canadians by raising the threshold for high-wage stream positions.
Along with the modification shared above, the Minister also declared that employers in the TFWP will no longer be permitted to use attestations from qualified accountants and/or attorneys to demonstrate the validity of their operations as of October 28, 2024.
In order to improve data sharing, he said that the TFW Program will expand on current information sharing agreements with employers’ registries and provincial and territorial partners. By taking these steps, the program will be less likely to be abused and worker protection will be strengthened as only genuine and valid employment offers will be accepted.
Understanding the TFWP
Temporary Foreign Worker Programme (TFWP) is a programme that allows Canadian employers to hire foreign workers if the position is not being filled by a Canadian worker for a long time. Labour Market Impact Assessment (LMIA) is a document given by Employment and Social Development Canada to an employer which gives them the permission to hire a temporary foreign worker. Once an employer gets an LMIA, the worker can apply for a work permit. Low wage stream and high-wage stream are two pathways that fall under TFWP.
Previous Rules and New Changes
Previous High-Wage Stream Requirements
To qualify for the high-wage stream of the Temporary Foreign Worker Program (TFWP), candidates were previously required to meet one of the following wage criteria:
- The median wage for their specific occupation in their region, as mentioned on Canada’s National Job Bank; or
- A wage that falls within the range of what current employees at the same organization earn for the same role, possessing equivalent skills and years of experience, and working at the same location.
It is important to note that employers must offer the higher wage from these two options to ensure eligibility under the high-wage stream.
Updated High-Wage Requirements
Effective November 8, candidates seeking to enter the high-wage stream must now earn at least 20% above the median wage for their area or receive a wage that aligns with the eligibility range of their employer’s business, as previously described, with the higher of the two wages being applicable.
The Minister of Employment, Workforce Development and Official Languages said that these changes to the Temporary Foreign Worker Program reinforces their commitment to protecting temporary foreign workers, while prioritizing the Canadian workers available to join the labour force.
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Changes in Low-Wage Stream
Canada had previously announced changes in low wage stream too. These include the following:
- Canada won’t process LMIA applications for low-wage positions in census metropolitan areas with an unemployment rate of 6% or higher.
- Implementing a limit that restricts employers from hiring more than 10% of their staff through the TFWP.
- Decreasing the maximum period of employment for employees hired via the low-wage pathway to twelve months (down from the previously set twenty-four months).
- The cap on low-wage positions in the construction and healthcare sector has been reduced to 20%
Impact on Population Management
At the same time, Canada is also aiming to reduce the number of temporary residents (such as those with work or study permits) to 5% of the nation’s total population due to increasing worries about housing availability and overall affordability.
Rationale Behind the Changes
Government’s Perspective
IRCC and Employment and Social Development (ESDC) have implemented several adjustments to the TFWP this year to encourage Canadian companies to increase the hiring and utilization of Canadian workers. The government believes that employers need to invest in full range of workers available in this country, such as young people, newcomers, and persons with disabilities, who are usually an untapped economic resource in Canada. The unemployment rate in Canada rose to 6.6% in August which has been the highest rate in the last three years. In September 2024, the youth unemployment rate was 13.5%, compared to the national average of 6.5%.
Expected Outcomes
ESDC anticipates that the announcement made recently will lead to more number of jobs being subject to the tougher regulations of the low-wage category of the TFWP, where employers are required to offer more assistance to workers regarding housing and transportation. The goal is to encourage the hiring of Canadian workers for the same roles. This will help in stabilizing population growth, easing pressure on housing and lower the unemployment rate in Canada. It will also help in increasing opportunities for under-represented groups like indigenous persons, women and person with disabilities.
Take Professional Help from Licensed Consultants
For employers and workers navigating the recent changes to the Temporary Foreign Worker Program, particularly the Low-Wage Stream, understanding the new requirements and restrictions is crucial. Whether you’re concerned about the new 12-month employment period limit, the 10% staff cap, or the stricter LMIA requirements in areas with 6%+ unemployment, having expert guidance can make the difference.
At ELAAR Immigration, our Regulated Canadian Immigration Consultants (RCICs) specialize in TFWP applications and compliance. We’ll help you understand the recent changes, ensure your application meets all requirements, and guide you through the updated LMIA process.
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