Canada Revamps Temporary Foreign Worker Program with New Wage Rules
Canada Revamps Temporary Foreign Worker Program: Key Changes and Implications
On October 21, 2024, Randy Boissonnault, Canada’s Minister of Employment, Workforce Development, and Official Languages, announced significant reforms to the Temporary Foreign Worker Program (TFWP). These changes aim to enhance the protection of Canadian workers while addressing pressing labor market needs. The new regulations emphasize higher wages for temporary foreign workers (TFWs) and impose stricter hiring standards.
Key Changes to the TFWP
Increased Wages for High-Wage Stream Workers
Effective November 8, 2024, employers must pay TFWs in the high-wage stream at least 20% above the provincial median wage. This marks a shift from the previous standard where high-wage positions were defined as those meeting the provincial median wage. The adjustment is particularly impactful for lower-skill positions, which may struggle to meet the new wage threshold, while managerial and professional roles may remain largely unaffected. The government anticipates that about 34,000 workers will see hourly wage increases between CAD $5 to $8, depending on their region.
If employers cannot meet the new high-wage criteria, they must decide whether to recruit TFWs under the low-wage stream, which has also undergone recent changes.
New Business Legitimacy Requirements
Starting October 28, 2024, the TFWP will no longer accept attestations from accountants or lawyers as proof of business legitimacy. Employers must now provide concrete documentation, including:
- A valid business license
- The latest T4 Summary of remuneration
- Recent T2 Schedule 100 and Schedule 125
The government will enhance verification processes through data-sharing agreements with provincial and territorial registries.
Implications for Employers
With these changes, employers need to recalibrate their hiring strategies and wage offerings. Here are the key steps to consider:
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Revise Recruitment Timelines: If you plan to advertise positions with salaries below the new 20% threshold, aim to submit your Labor Market Impact Assessment (LMIA) applications before November 8 to avoid the new requirements.
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Adjust Wage Offers: For positions still open for recruitment, consider raising the offered wages to meet the new high-wage criteria.
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Increase Salaries for Existing TFWs: Review and adjust the wages of current TFWs under high-wage LMIAs to comply with the new thresholds prior to LMIA renewals.
- Facilitate TFW Transition to Permanent Residency: Explore options to support TFWs in transitioning to permanent residency, which could reduce the need for additional LMIA applications in the future.
Conclusion
These reforms to the TFWP reflect Canada’s commitment to balancing labor market demands with the rights of both Canadian and temporary foreign workers. As these regulations come into effect, employers must stay informed and proactive to ensure compliance and maintain competitiveness in their industries.
For employers and TFWs navigating these changes, professional guidance can be invaluable. Our team is ready to assist you in understanding these new regulations, streamlining the application process, and ensuring compliance with the TFWP’s latest updates. Contact us today for a discovery call to align your business or employment strategies with the evolving landscape of Canada’s labor market.
Stay informed and prepared as Canada continues to evolve its labor policies to better serve both its workforce and economy.
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