Canada Tightens Temporary Foreign Worker Program with New Restrictions

The Canadian government has announced substantial changes to its Temporary Foreign Worker Program that will take effect on September 26, 2024, representing a significant policy shift toward reducing foreign worker numbers. Minister of Employment, Workforce Development and Official Languages Randy Boissonnault has introduced three key restrictions targeting low-wage temporary foreign workers as the country grapples with immigration levels during a housing and cost-of-living crisis.

The first major change reduces the cap on low-wage temporary foreign workers from 20% to 10% of an employer's workforce, rolling back COVID-era policies that had allowed greater flexibility. This reduction aims to encourage businesses to prioritize hiring from the domestic labor market rather than relying on foreign workers. The government's decision reflects growing public concern about immigration's impact on housing availability and living costs across Canadian communities.

Secondly, work permits for low-wage temporary foreign workers will be shortened to one year, down from previous longer-term options. This change will require employers to apply for new Labour Market Impact Assessments more frequently, potentially every eight months when accounting for processing time. The increased administrative burden is intended to ensure ongoing justification for foreign worker needs and regular reassessment of domestic labor availability.

The third significant restriction involves the government refusing to process low-wage Labour Market Impact Assessments in metropolitan areas with unemployment rates of 6% or higher. This policy resurrects similar rules that were revoked in 2022 during the post-pandemic recovery period, though exceptions will be made for high-priority sectors including agriculture, food processing, construction, and healthcare. These sectors have demonstrated persistent labor shortages that cannot be filled domestically despite higher unemployment in surrounding areas.

These changes represent a notable departure from Canada's previous immigration stance, which had emphasized growth following the global pandemic and the influx of refugees from Ukraine. The policy shift aligns with broader trends of tightening immigration controls in response to public sentiment and economic pressures. Employers who have relied heavily on temporary foreign workers, particularly in hospitality, retail, and manufacturing sectors, will need to reassess their workforce strategies and capacity to navigate more frequent application processes.

For temporary foreign workers in low-wage positions, the changes create uncertainty as current permits approach expiration. The shortened permit duration and increased restrictions may force many workers to reconsider their long-term prospects in Canada. The government maintains these measures are necessary to address domestic employment concerns, while critics warn of potential labor shortages in key industries and possible economic slowdown. The balance between public concerns about immigration levels and meeting business labor needs remains contentious as implementation approaches.