Federal Government Weighs Limits on Low-Wage Temporary Foreign Workers
In a significant move impacting Canada’s labor market, Employment and Workforce Development Minister Randy Boissonnault has announced plans for substantial reforms to the Temporary Foreign Worker (TFW) program. These potential changes, which are currently being evaluated by the federal government, could greatly affect how businesses in low-wage industries make use of foreign labor on a temporary basis.
Rationale Behind the Changes to the TFW Program
Minister Boissonnault has emphasized the critical need to address instances of misuse and exploitation within the program. He stated, “I am fully committed to eliminating the misuse and abuse of the TFW program. Protecting the health and safety of temporary foreign workers is a responsibility I take very seriously.” This reform is intended to combat fraudulent activities and ensure the program operates as originally designed.
Implications for Businesses and Employees
The proposed changes are expected to focus on positions offering wages below the median hourly rates for each province and territory. Currently, these rates range from $24 per hour in Prince Edward Island and Nova Scotia to $39.24 per hour in the Northwest Territories.
Worries from the Food and Beverage Industry
The proposed changes have raised concerns within the food and beverage sector. Kristina Farrell, CEO of Food and Beverage Canada, expressed fears regarding potential rejections of TFW applications. She stated, “If these changes are implemented, they could result in a crisis within the food and beverage manufacturing industry, potentially leading to increased food prices and negative impacts on both consumers and businesses.”
Increase in Fraudulent Activities and Strengthened Enforcement
Recent figures show a troubling rise in fraudulent practices within the TFW program. During the 2023-24 fiscal year, fines exceeding $2 million were issued, reflecting a 36% increase from the previous year. Reports indicate that some employers are paying between $30,000 and $60,000 for fraudulent labor market impact assessments (LMIAs), compared to the typical $1,000 processing fee.
Sahil from Its Immigration noted that these fraudulent LMIAs are being used to boost scores in Canada’s express entry immigration system. “Many cases of abuse in sectors like food and hospitality stem from severe labor shortages. The key is robust enforcement rather than sweeping policy changes,” he stated.
Proposed Measures to Prevent Misuse
Minister Boissonnault recently introduced several new measures to curb the misuse of the TFW program, including:
- Enhanced Oversight: Increased monitoring in high-risk areas during LMIA processing.
- Higher Fees: Potential increases in LMIA application fees.
- Enforcement of Workforce Limits: Ensuring that TFWs do not exceed 20% of a company’s workforce.
Potential Impacts on the Restaurant Sector
Restaurants Canada, represented by CEO Kelly Higginson, has voiced concerns about the proposed reforms. The proportion of TFWs in the restaurant industry rose from 1% to 3% following the pandemic. Higginson stressed the crucial role of TFWs in areas heavily reliant on tourism, stating, “Temporary foreign workers are essential in regions where tourism is a key economic driver.” Without TFWs, essential services like local coffee shops could face significant challenges.
Striking a Balance Between Oversight and Industry Requirements
While Restaurants Canada supports increased oversight, there are concerns about the potential repercussions. Higginson remarked, “We support the call for stronger oversight to remove those who violate the rules, but the proposed changes could have serious consequences for our industry and the broader tourism economy.”
Growing Approval Rates for TFW Applications
The approval rate for TFW applications has significantly increased, with 239,646 approvals recorded last year—more than double the figure in 2018. This surge has led to concerns about systemic misuse. A Statistics Canada report from May 2019 revealed that one in ten TFWs earned less than $7,500 annually, underscoring the need for reform.
Get Help from IJS Immigration
As the federal government considers these major changes, it’s crucial for businesses and workers to stay informed and prepared. For more information on how the new TFW policies could affect you or your business, contact IJS IMMIGRATION. Our team is ready to provide expert guidance and support during this period of transition.
