Canada’s Temporary Foreign Worker Program Overhaul
July 9, 2014
On June 20, 2014 the Federal Government announced a major overhaul of Canada’s Temporary Foreign Worker Program. With stringent enforcement and compliance mechanisms, the overhaul increases the restrictions on Canadian employers’ use of temporary foreign workers – and Canadian employers will face additional challenges hiring temporary foreign workers going forward:
- Two Programs. The International Mobility Program (IMP) will be separated from the Temporary Foreign Worker Program (TFWP) and will complement a restructured TFWP.
- Restructured Temporary Foreign Worker Program. The existing TFWP will be restructured: a Labour Market Impact Assessment (LMIA) will replace the Labour Market Opinion (LMO), classifications will be wage rather than occupation based, specified requirements and/or restrictions will apply to wage categories and Provincial LMIA exemptions will be reviewed.
- New International Mobility Program. The carved out IMP will also bring changes, including the requirement to submit information for LMIA-exempt employees, a compliance system and fee, intra-company transferee restrictions and a review – and likely reduction – of LMIA exemptions.
- Key Dates. There is no single effective date for the changes. Some are effective immediately, others at later dates.
Temporary foreign workers are currently administered under a single program: the “Temporary Foreign Worker Program” (TFWP). The overhaul will create a second, complementary program:
- Temporary Foreign Worker Program. The TFWP will be restructured to cover only those foreign workers entering Canada at an employer’s request after approval through a new Labour Market Impact Assessment (LMIA). Employment and Social Development Canada (ESDC) will be the lead department.
- International Mobility Program. The IMP will be carved out of the TFWP as a second, stand-alone program to cover all LMIA-exempt work permit applications. This will include foreign workers entering Canada with the primary objective of advancing Canada’s broad economic and cultural national interests, and will generally consist of high-skill/high-wage workers. Citizenship and Immigration Canada (CIC) will be the lead department.
TEMPORARY FOREIGN WORKER PROGRAM
The streamlined TFWP will undergo a number of key changes:
LMO to LMIA. The “LMO” is now an “LMIA” under which an employer must:
- Additional Information. Provide additional information, such as the number of Canadians who applied for the available job, the number of Canadians the employer interviewed and why it did not hire Canadians.
- Attestation. Declare it is aware of the rule that Canadians can’t be laid-off or have their hours reduced at a worksite that employs temporary foreign workers.
Wage-Based Classification. The TFWP currently classifies foreign workers based on the National Occupational Classification; it will now classify based on wages: “Low-wage” and “High-wage”.
Low-Wage. Temporary foreign workers paid under the provincial median wage will be classified as “low-wage”. Employers seeking to hire low-wage temporary foreign workers will be subject to the following restrictions:
- Cap. Employers with 10 or more employees that apply for a new LMIA will be subject to a cap on the number of low-wage temporary foreign workers they can hire: effective immediately the cap will be the lower of 30% or the current level; by July 1, 2015 it will be 20%; and by July 1, 2016 it will be 10% per work site.
- Sectors. Where the unemployment rate equals or exceeds 6%, ESDC will not process certain temporary foreign worker applications in the accommodation, food services and retail trade sectors for positions requiring little or no education or training.
- Work Permit Duration. The duration of work permits will be reduced from two years to a maximum one year for all low-wage positions.
High-Wage. Temporary foreign workers paid at or above the provincial median wage will be classified as “high-wage”. With some exceptions, employers seeking to hire high-wage temporary foreign workers must provide transition plans with their LMIAs showing how they will reduce their reliance on temporary foreign workers. A new category for the highest-demand, highest-paid or shortest-duration workers with a 10 business day service standard will also be available for certain occupations.
Sectors. There are some sector-specific changes:
- Food Services. With the reforms to the TFWP, the Federal Government has lifted the moratorium on the food services sector.
- On-Farm Primary Agricultural Work and the Live-in Caregiver Program. These will be exempt from some of the changes, including the cap on low-wage temporary foreign workers and the one year LMIA duration.
Provincial Agreements. The Federal Government will re-visit LMIA exemptions that exist by agreement with certain Provinces – meaning fewer jobs may qualify as LMIA-exempt. NS is the only Atlantic Canadian Province with such an agreement.
Additional Changes. There are a number of additional changes, including increased frequency and scope of inspections, expansion of the public employer blacklist, increased criminal investigation powers, significant monetary fines and an increased LMIA fee of $1000 for each temporary foreign worker position an employer requests.
INTERNATIONAL MOBILITY PROGRAM
The newly carved out IMP will cover all LMIA-exempt work permit applications and will also bring changes:
LMIA-Exempt Employees. Employers must now submit the job offer and other information to CIC – even when the employee is LMIA-exempt.
Compliance System. The IMP will be subject to a compliance system similar to the TFWP compliance system, funded by a new compliance fee.
Exemption Categories. CIC will undertake a comprehensive review of LMIA-exempt categories and will move the categories it decides don’t warrant exemption to the TFWP.
Intra-Company Transferee Restrictions. Effective immediately, the IMP will restrict intra-company transferees to ensure employers only use the LMIA exemption for temporary foreign workers who are highly skilled and bring specialized knowledge to Canada.
There is no single effective date for the changes resulting from the latest overhaul of Canada’s TFWP: some are effective immediately, others at later dates. The Federal Government has provided a timeline outlining the effective dates of the changes to the TFWP.
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Immigration Law Team to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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