June 20, 2014 – Ottawa, Ontario – Employment and Social Development Canada
The Honourable Jason Kenney, Minister of Employment and Social Development, and Chris Alexander, Minister of Citizenship and Immigration, today announced a comprehensive overhaul of the Temporary Foreign Worker Program (TFWP).
This balanced package of reforms will ensure the TFWP is only used as intended, as a last and limited resort to fill acute labour shortages on a temporary basis when qualified Canadians are not available.
By limiting access to the program, tightening the labour market assessment and implementing stronger enforcement with tougher penalties for employers who break the rules, businesses will have to make greater efforts to recruit and train Canadians for available jobs, including increasing wages.
To offer greater clarity and transparency, the current TFWP is being reorganized and new International Mobility Programs (IMPs) are being created. The TFWP will now refer to those streams under which foreign workers enter Canada at the request of employers following approval through a new Labour Market Impact Assessment (LMIA). The new IMPs will incorporate those streams in which foreign nationals are not subject to an LMIA, and whose primary objective is to advance Canada’s broad economic and cultural national interest, rather than filling particular jobs. These reorganized programs will improve accountability, with Employment and Social Development Canada (ESDC) being the lead department for the TFWP, and Citizenship and Immigration Canada (CIC) the lead department for the IMPs. In addition, ESDC will publicly post data on the number of positions for temporary foreign workers approved through the TFWP on a quarterly basis, and will post the names of corporations that receive permission to hire temporary foreign workers through LMIAs.
Reforms to the Temporary Foreign Worker Program
- Limiting access to the TFWP to ensure Canadians are first in line for available jobs:
- Wage levels will now replace National Occupational Classification as the main criteria for administering the TFWP, as wages constitute a more accurate reflection of occupational skill level and local labour market conditions. Jobs for which wages are below the provincial or territorial median wage will be considered “low-wage,” while those being paid at or above the provincial/territorial median will be considered “high-wage.”
- The Labour Market Opinion is being replaced by the more rigorous LMIA as the screening mechanism for employers seeking to hire temporary foreign workers. The new LMIA will require that employers provide information on the number of Canadians that applied for a particular job, the number of Canadians the employer interviewed and an explanation if Canadian applicants 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.
- Employers with 10 or more employees applying for a new LMIA are subject to a cap of 10 percent 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 who are above the 10 percent cap time to transition and adjust to this new cap, it will be phased in over the next couple of years. For those employers that currently have a low-wage temporary foreign worker workforce that is above the cap, effective immediately, when those employers apply for a new LMIA they will be limited at 30 percent or frozen at their current level, whichever is lower. This transition measure will be further reduced to 20 percent beginning July 1, 2015 and reduced again to 10 percent on July 1, 2016. The government may consider lowering the cap further in future. It is estimated that this measure alone could reduce the number of general low-wage temporary foreign workers by 50 percent in the next three years, based on current wage levels.
- Applications for the lowest-wage, lowest-skill, entry-level occupations in the food services, accommodation and retail trade sectors will be barred from the TFWP in areas of high unemployment (6 percent or higher).
- LMIAs for low-wage temporary foreign workers will be reduced from the current two-year standard duration to one-year periods.
- To reinforce the temporary nature of the TFWP, the cumulative period during which general low-wage temporary foreign workers will be allowed to remain in Canada will be reduced.
- Annex agreements with provinces and territories are being changed so that employers that used to bring temporary foreign workers to Canada through these agreements will now be subject to an LMIA.
- Employers seeking to hire high-wage temporary foreign workers (with very limited exceptions) will now be required to submit transition plans to demonstrate how they will increase efforts to hire Canadians, including through higher wages, investments in training and more active recruitment efforts from within Canada.
- More and better labour market information for stronger screening:
- A new enhanced Job Matching Service will allow Canadians to apply directly through the Canada Job Bank for jobs that match their skills and experience, and provide information to program officers reviewing an employer’s LMIA application on how many qualified Canadians have applied for specific jobs.
- Funding two new surveys to be conducted by Statistics Canada:
- New quarterly Job Vacancy Survey – The current Job Vacancy Survey limited to a sample of 15,000, only provides data at the provincial level and does not provide information on specific occupations or skill levels. The new survey will be based on a sample of 100,000 employers, will provide data by local areas and will include data on occupations and skill levels.
- New annual National Wage Survey – Increasing the sample size from 56,000 households to 100,000 employers. Unlike the current Wage Survey, data will be available by region instead of only at the provincial level.
- Better use of existing government data (e.g. taking into account number of qualified Canadians receiving Employment Insurance in an area as part of the new LMIA).
- Stronger enforcement and tougher penalties:
- Massively increasing the number and scope of inspections so that one in four businesses employing temporary foreign workers will be inspected by the TFWP each year.
- Increasing the number of program requirements that inspectors can review from 3 to 21.
- Improving and expanding the TFWP Tip Line and creating a new “Complaints” website.
- Expanding the ability to publicly blacklist employers who have been suspended and are under investigation, as well as those who have had an LMIA revoked and are banned from using the program.
- Additional funding for the Canada Border Services Agency to allow for an increase in the number of criminal investigations.
- Improving information sharing among departments and agencies involved in the oversight of the TFWP, including provincial and territorial governments.
- Introducing significant monetary fines of up to $100,000 following adoption of new legislative authorities included in the Budget Implementation Act (Bill C-31).
- making employers of LMIA-exempt foreign nationals more accountable by requiring them to submit their job offers directly to CIC;
- introducing a robust monitoring system for employers employing workers through the IMPs on par with the enforcement improvements being made by ESDC for the TFWP. This system will be made possible by the collection of a new compliance fee of $230 per work permit, once authorities are in place. The fee will apply in cases where the work permit is employer specific and LMIA-exempt;
- imposing a $100 privilege fee on holders of open work permits as soon as possible;
- making changes to the rules for intra-company transferees;
- improving the balance in the number of young Canadians and young people from partner countries participating in working holidays, professional exchanges and international co-op through International Experience Canada; and
- conducting a thorough review of LMIA-exempt IMP streams to identify whether some streams should require an LMIA.
- In 2013, 83,740 temporary foreign workers entered Canada, equalling 0.44 percent of the total Canadian labour force.
- In 2013, 221,273 foreign workers entered Canada under the LMIA-exempt IMPs, equalling 1.16 percent of the total Canadian labour force.
- The number of LMO-approved temporary foreign workers to enter Canada since 2006 has grown from 65,000 to 84,000, representing an increase of 29 percent.
- The TFWP was created in 1973 to allow employers to hire specific, highly skilled foreign nationals, such as academics, business executives and engineers, to fill gaps in their workforces on a temporary basis.
- In 2002, the low-skill pilot project was launched to allow employers to hire temporary foreign workers in low-skilled occupations such as food counter attendants.
- Previous reforms in 2012 to the TFWP include:
- conducting on-site inspections to make sure employers are meeting the conditions of the program;
- requiring employers to pay temporary foreign workers at the prevailing wage by removing the existing wage flexibility;
- adding questions to employer applications to ensure that the program is not used to facilitate the outsourcing of Canadian jobs; and
- making English and French the only languages that can be used as a job requirement when hiring temporary foreign workers.
The costs for administering the TFWP, including all of the reforms outlined above, will be borne entirely by employers who use the program, not by taxpayers. As a result, the LMIA fee is increasing from $275 to $1,000 for every temporary foreign worker position requested by an employer. ESDC will be seeking the authority to impose an estimated $100 privilege fee on employers applying for LMIAs to offset the costs of Government of Canada investments in skills and job training.
On-farm primary agriculture, including the Seasonal Agricultural Worker Program (SAWP), is exempt from the fee and the cap, along with the one-year LMIA duration and the reduction in the period that a low-wage temporary foreign worker will be allowed to remain in Canada, as there are proven acute labour shortages in this sector and the unfilled jobs are truly temporary. The Live-in Caregiver Program (LCP) is exempt from the cap, the one-year LMIA and the reduced duration in Canada. All other measures including stronger enforcement and tougher penalties apply to on-farm primary agriculture, SAWP and LCP.
With the reforms of the TFWP, the Government of Canada is ending the moratorium that was placed on the food services sector effective immediately. For more information, please visit: www.esdc.gc.ca/TFWP.
Reforms to the International Mobility Programs
Previously part of the TFWP, the IMPs will refer to those foreign workers who are not subject to an LMIA. It is in the national economic and cultural interest of Canada for foreign nationals to be able to work here through the IMPs. Exemptions to the LMIA process are based on the competitive advantages and reciprocal benefits that Canadians enjoy as a result. They exist as part of international agreements, arrangements that facilitate permanent immigration, or due to efforts to give Canada access to highly-skilled workers and international students.
Citizenship and Immigration Canada is reforming the IMPs. Specifically, CIC is:
“Our government has been clear that Canadians must be first in line for available jobs. These comprehensive and balanced reforms restore the Temporary Foreign Worker Program to its original purpose—as a last and limited resource for employers when there are no qualified Canadians to fill available jobs. Employers will be compelled to redouble their efforts to recruit and train Canadians. These reforms will significantly reduce the number of temporary foreign workers in Canada and improve labour market information, while strengthening enforcement and penalties for those who break the rules.”
– The Honourable Jason Kenney, Minister of Employment and Social Development
“The reforms announced today will maximize the competitive advantages and reciprocal benefits of Canada’s International Mobility Program. The strengthened enforcement of the rules of both the Temporary Foreign Worker Program and the newly named International Mobility Program will go a long way to ensure that employers are playing by the rules and that those who aren’t will be held accountable. Our government is proud of our strong permanent immigration record, and we will ensure that those working in Canada on a temporary basis are only hired when it is in the best interest of our country.”
– Chris Alexander, Minister of Citizenship and Immigration
Backgrounder: Reforming the Temporary Foreign Worker Program: Canadians First
Backgrounder: Ending the Moratorium on the Food Services Sector
Backgrounder: Government of Canada Investments in Skills Training