Ottawa cuts back on temporary foreign workers; reduces permitted percentage of ‘low wage’ workers

Law360 Canada (March 21, 2024, 4:45 PM EDT) -- The federal government has announced it is “adjusting” its temporary foreign worker program which has experienced “a surge in demand” due to the post-pandemic economy, low unemployment rates, and record-high job vacancy rates in 2022.

On March 21, 2024, federal Employment Minister Randy Boissonnault and Immigration Minister Marc Miller announced in Ottawa that certain time-limited measures in the temporary foreign worker program’s “Workforce Solutions Road Map” will not be renewed and will end this spring — earlier than planned.

“Our labour market needs are tightening, so should our policies,” Miller said in a statement. “Today's announcement prioritizes our country’s needs to have enough construction workers to build houses, early childhood educators to teach our kids, and health-care workers to treat patients. As we gradually reduce our reliance on temporary foreign workers, we will continue to help employers fill job vacancies while supporting Canadian workers.”

Added Boissonnault, “today we announced our intention to reduce Canada’s reliance on temporary foreign workers and encourage employers to find the talent they need right here at home. The time-limited measures we introduced in 2022 were necessary as our labour market was facing unprecedented conditions — but now, as times change, we must ensure our temporary foreign worker program reflects our current needs.”

Boissonnault said that, effective May 1, 2024:

• The validity of New Labour Market Impact Assessments will be reduced from 12 months to six months “to ensure accurate labour market needs.”
• All employers identified in the 2022 Workforce Solutions Road Map will have a reduction from 30 per cent to 20 per cent of their total workforce that can come in through the temporary foreign worker program, under the low wage stream, with an exception for the construction and health care sectors.
• Employers “will need to explore every option” before applying for Labour Market Impact Assessments — including recruiting asylum seekers with valid work permits in Canada.

The federal government noted additionally, that as of Jan. 1, 2024, employers are required to annually review the wages of temporary foreign workers to ensure they reflect increases to prevailing wage rates for their given occupation and region of work. “For the vast majority of cases, when wages are reviewed, they are increased for the workers,” the government said. “If not, they remain the same and cannot go down upon review.”

Ottawa pledged to continue to monitor labour market conditions to ensure that the temporary foreign workers program “reflects current economic needs, and that Canadians are considered first for job opportunities, while also ensuring that the rights of temporary foreign workers in Canada are protected.” The program aims to help Canadian employers fill labour and skills shortages on a temporary basis when Canadians and permanent residents are not available.

The Workforce Solutions Road Map that was announced in 2022 applied to the seven sectors: Food Manufacturing (NAICS311); Wood Product Manufacturing (NAICS321); Furniture and Related Product Manufacturing (NAICS337); Accommodation and Food Services (NAICS72); Construction (NAICS23); Hospitals (NAICS622); and Nursing and Residential Care Facilities (NAICS623).

The federal government said Canada’s unemployment rate increased 0.1 percentage points to 5.8 per cent in February 2024—where it has been for three of the past four months. Job vacancies fell by 25,400 (-3.6 per cent) to 678,500 in the fourth quarter of 2023, marking the sixth straight quarterly decline from the record high vacancy rate reached in the second quarter of 2022 (983,600).

The federal budget in 2022 committed the government to develop a new foreign labour program for agriculture and fish processing to ensure that Canada's food producers have access to a stable and reliable labour supply and to strengthen worker protections. “Canada is ready to work with source countries through the modernization of new Seasonal Agricultural Worker Program bilateral agreements to offer temporary foreign workers and employers new opportunities, through the incorporation of year-round primary agriculture and seasonal fish, seafood, and primary food processing into the program,” states a March 21, 2024 media release from Employment and Social Development Canada.

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