Canada's new limits on temporary foreign workers are now in effect. Here's what changed

Minister of Tourism and Associate Minister of Finance Randy Boissonnault stands during question period in the House of Commons on Parliament Hill in Ottawa on Monday, March 28, 2022. THE CANADIAN PRESS/Sean Kilpatrick

New changes to Canada's temporary foreign worker (TFW) program are now in effect. Here's what to know:

What's changed?

As announced by Employment and Social Development Canada in August, several changes activated Thursday.

Going forward. the federal government will stop processing Labour Market Impact Assessments (LMIAs), specifically those in the TFW program's low-wage stream, in areas of the country with an unemployment rate of six per cent or higher. By refusing to process these forms, the government will prevent employers, in most cases, from hiring TFWs as long as unemployment remains high in their area.

As well, employers are now prohibited from hiring more than 10 per cent of their workforce through Canada's TFW program, a percentage applied, as above, to the low-wage stream. Previously, that cap was set at 20 per cent.

Finally, a participant in the TFW program may only be employed in a low-wage job for one year, reduced from the prior limit of two years.

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Who is affected?

Thursday's changes impact workers and employers in the low-wage stream of the TFW program, which governs jobs paying less than the median hourly rate in the province or territory where they are located.

Exceptions may apply to those in some key industries, both seasonal and non-seasonal, including agriculture, food processing, construction and health care.

In addition, a temporary freeze on LMIA applications began earlier this month in Montreal, scheduled to resume March 3. The freeze applies to jobs with an hourly rate less than the Quebec median of $27.47 per hour.

Why is this happening?

In recent months, the federal government has announced tightening restrictions on non-permanent immigration, following years of steep increases to the number of work- and/or study-permit holders in Canada.

Thursday's changes are only the latest efforts to narrow eligibility, the release notes, with TFW workforce caps falling to 20 from 30 per cent, and now to 10 from 20 per cent, since October 2023.

"As the labour market has loosened, the Government of Canada began rolling back the pandemic measures aimed at addressing an extraordinary labour shortage," it reads.

"Employers in Canada have a responsibility to invest in the full range of workers available in this country."

Employment and Social Development Canada's August announcement cites two consecutive months of increasing unemployment this May and June, with the latest data at the time showing 6.4 per cent unemployment nationwide.

"The Temporary Foreign Worker program was designed to address labour market shortages when qualified Canadians were not able to fill those roles," said Employment Minister Randy Boissonnault in the release.

"The changes we are making today will prioritize Canadians workers and ensures Canadians can trust the program is meeting the needs of our economy.”

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What happens next?

Employment and Social Development says the federal government "will continue to monitor labour market conditions and introduce further adjustments to the Program as needed," with a substantive review expected before the end of this year.

Further adjustments, the August release warns, may impact the high-wage stream of the TFW program, as well as existing but unfilled LMIA positions, current exceptions for some economic sectors and a potential expansion of restrictions to rural areas not included in a CMA.

As of the most recent estimates, roughly 10 million Canadians, or just over one-quarter of the population, lived outside a CMA in 2023.