Businesses face new limits on temporary foreign worker program

Starting today, employers in Canada will face new restrictions on their hiring of low-wage temporary foreign workers — a policy shift the federal government says will push businesses to make a greater effort to hire workers already in Canada.

Under the new restrictions:

• Employers will be limited to hiring 10 per cent of their workforce through the program’s low-wage stream.
• Employers will be unable to hire through this program if they are in census metropolitan areas with unemployment rates of more than six per cent. 
• Contracts for low-wage positions will be generally be limited to one year.

There are some exceptions to the above rules, such as for employers in health care and construction.

The federal government is aiming to rein in the temporary foreign worker program after it loosened hiring rules in the wake of the COVID-19 pandemic. In recent years, the low-wage stream has seen particular growth, with the number of positions approved through this stream nearly quadrupling from 21,394 in 2018 to 83,654 in 2023.

The program’s low-wage stream is for positions whose wages are below the territorial or provincial median hourly wage. Employers are required to offer similar wages to those paid to Canadians and permanent residents working in the same jobs and locations, and with similar experience. 

“I think these changes make sense,” said Christopher Worswick, professor and chair of the economics department at Carleton University. 

There’s concern among academic economists that the temporary foreign worker program suppresses wage growth. Worswick said the program gives businesses the option of looking abroad for temporary staff instead of raising wages to attract local employees. 

While Worswick said he agrees with these new restrictions, he thinks Ottawa could go further.

“I actually think we should probably be phasing this program out as soon as possible.” 

Instead, he said, the government should prioritize high-skilled, permanent immigration, and let businesses find staff from a pool of citizens and immigrants. 

Some business owners say they’ve tried and failed to find local workers before turning to the temporary foreign worker program, and that the new restrictions could put them out of business. 

Michael Aitken, who owns the restaurant El Mariachi Tacos and Churros in Mississauga, Ont,. says he relies on the program to find workers with specialized cooking skills that are in short supply in Canada.

“My reaction is a little bit of fear of what will become of El Mariachi,” said Aitken, who through the program employs 14 cooks, two bartenders and a food service supervisor from Mexico.

“Without the cooks that we have, I think our doors will be closed.”

Restaurants call for job ‘matching’ alternative

Restaurants have recently become a major employer of temporary foreign workers. Outside of agricultural jobs on farms and nurseries, the top three most popular positions approved last year through the temporary foreign worker program were cooks, food service supervisors and food counter attendants, according to federal data. 

The advocacy organization Restaurants Canada says it generally agrees with a shift away from the program, though it wants more government support in making such a transition.

The group has proposed a matching program that would connect newcomers and asylum claimants with open restaurant positions and provide training to help them get up to speed, said Maximilien Roy, its federal and Quebec vice-president.

“We still are facing labour shortages across the country and all the different communities, and we need the government to help us get these people in our workforce,” he said, adding that the industry has about 73,000 vacancies. 

In a statement, a spokesperson for Employment Minister Randy Boissonnault said the federal government spends more than $3 billion every year on skills training, and that it is in regular contact with Restaurants Canada. 

Meanwhile, the Migrant Workers Alliance for Change criticized the restrictions, saying in a statement they didn’t come with any additional rights for migrant workers.

“Reducing the numbers of migrants will not stop their exploitation; giving them equal rights and the power to exercise those rights will — and that is only possible through permanent resident status for all.”

WATCH | Mixed views on the TFW program: 

Canada’s temporary foreign worker surge: Opportunity or exploitation?

Canadian businesses were given the green light to fill roughly 240,000 jobs with temporary foreign workers in 2023, more than twice as many as they were a half-decade earlier. CBC’s Paula Duhatschek looks at the divided opinions and experiences behind the surging numbers.

According to Statistics Canada, the country’s unemployment rate hit 6.6 per cent in August, up 1.1 percentage points year over year. The largest increase among various age groups came from youth, up 3.2 percentage points to 14.5 per cent in the same time period.

In a release, the federal government has said employers are responsible for investing in the “full range” of workers in Canada, including young people, newcomers and people with disabilities, and for training and upskilling their current workers. 

The government said it will continue to monitor labour market conditions and may bring in further changes to the program if needed.