Breaking News: Overhaul of Temporary Foreign Worker Program

The Government of Canada announced on Friday, June 20, 2014 a significant overhaul of the Temporary Foreign Worker Program (TFWP). The overhaul includes a general restructuring of the program as well as several important changes to various work permit application procedures.

The changes were outlined in a joint press conference held by Minister of Employment and Social Development, Jason Kenney, and Minister of Citizenship and Immigration, Chris Alexander.

Background to Changes

The Ministers’ announcements come after months of controversy surrounding the TFWP. In particular, detractors have characterized the program as a pathway for large numbers of low-skilled, low-paid workers to enter Canada and take jobs from otherwise qualified Canadians.

Recent scandals have also highlighted employer abuse of the program, particularly in the food services sector. Criticism became so intense that, just weeks ago, the government announced a temporary moratorium on applications for certain occupations in that sector.

In reality, the TFWP helps thousands of workers come to Canada to fill jobs in a variety of sectors. With the implementation of these new changes, the government is working to ensure that the TFWP is flexible enough to respond to the country’s labour needs while ensuring that the rights of both Canadians and foreign workers are sufficiently protected

Moving Forward: Temporary Worker Program Split in Two

There are a number of different paths (also referred to as ‘streams’) for temporary foreign workers to come to Canada. Moving forward, the TFWP will only encompass streams that require government approval of jobs offered by Canadian employers. This approval comes in the form of a Labour Market Impact Assessment (LMIA), which was formally known as a Labour Market Opinion (LMO). The TFWP will continue to be overseen by Employment and Skills Development Canada.

Certain foreign worker streams are exempt from the requirement to obtain an LMIA. These include streams that are based on Canada’s reciprocal employment agreements with other countries or streams that facilitate the entry of workers who will significantly benefit the Canadian economy. These streams will now be classified as International Mobility Programs, and will be overseen by Citizenship and Immigration Canada.

New Assessment Criteria: Based on Wages, Not Occupations

Many Canadian employers will be required to seek a positive LMIA in order to bring a foreign worker to Canada. The new LMIA application process is more comprehensive and rigorous than the previous LMO process.

The old LMO process classified workers on the basis of their type of job in Canada. The LMIA will place less emphasis on a worker’s occupation, and instead classify them according to the wages they will earn in Canada. Workers offered a salary that meets or exceeds the median wage in the province where they will work are considered ‘high-wage’. Depending on the province, the median wage ranges from as low as $17/hour in Prince Edward Island to as high as $30/hour in Nunavut.

The median wages in each of Canada's provinces/territories are as follows:

Workers who will make less than the provincial median wage are considered ‘low-wage’. Effective immediately, low-wage workers can make up no more than 10 per cent of an employer’s workforce. An exception is made for employers with less than 10 workers. Businesses that are currently over this limit will be given until July 2016 to comply.

Other Changes to the LMIA Application Process

 The LMIA application fee has been raised to $1,000 per employee requested. The fee was previously $275. In addition, employers requesting an LMIA will be required to provide detailed recruitment information, as well as plans for transitioning their temporary job to a Canadian citizen or permanent resident.

Applications for an LMIA will not be processed if ALL of the following criteria exist:

• The LMIA is requested for a geographic area where unemployment exceeds 6%; and
• The LMIA is requested for an occupation in the Accommodation & Food Services or Retail Sectors; and
• The LMIA is requested for certain low-skilled occupations.

In addition, employers hiring a ‘high-wage’ employee will be required to fill out a transition plan. This transition plan must include information on how a permanent solution will be found for the temporary position being filled by the foreign worker.

Expedited Processing for Select Occupations

 Employers hiring workers in certain occupations will be eligible to have their LMIA applications processed in just 10 days. These occupations are as follows:

• Highest-Demand Occupations – Occupations classified as skilled trades;
• Highest-Paid Occupations – Occupations receiving wages in the top 10 per cent of wages earned by Canadians in a given province; and
• Shortest-Duration Occupations – Employers Seeking a foreign worker for 120 calendar days or less

 New Fees and Requirements for LMIA-Exempt Work Permits

 Work permit streams that are exempt from the LMIA requirement are now classified as International Mobility Programs. In the future, employers wishing to bring in an employee through one of these streams will be required to first have their job offer, as well as other relevant information, approved by Citizenship and Immigration Canada. Only after approval has been granted will the employee be able to apply for a temporary work permit.

In addition, new fees will be instituted for some programs. They include:

• $230 ‘compliance fee’ to be charged to certain employers, and
• $100 ‘privilege fee’ to be charged to individuals who receive open work permits.

 The Need for Change

 The above changes have been implemented in order to ensure that Canada’s temporary foreign worker system is able to respond quickly to labour needs while ensuring that the rights of both Canadians and foreign workers are protected.

To ensure that this protection extends after a work permit is issued, the government is backing up its new rules with enhanced provisions for monitoring and enforcement. Employers that are discovered cheating the system will run the risk of being ‘blacklisted’ from hiring foreign workers and fined up to $100,000.

“What we are seeing here is that the Canadian people have voiced their concerns, and their government is making every effort to reform the program accordingly,” said Attorney David Cohen.

The changes to the TFWP serve to increase the level of commitment required by most employers wishing to hire foreign workers. According to Attorney Cohen, the complexity of the new rules is likely to intimidate employers, especially those who have never brought in workers before.

“We are certainly seeing a strong push to discourage the average Canadian employer from hiring abroad,” said Attorney Cohen. “At the same time, an employer who genuinely needs a foreign worker will find that the system is still set up to facilitate that worker’s entry. This is especially true for employers who are now eligible for expedited 10-day processing, who would otherwise be waiting weeks or even months to hear word on their application.”

In the next edition of CIC News, we will explain in further detail how these changes will affect effect Canadian employers and temporary foreign workers.

To find out if you are eligible to work temporarily in Canada, or to learn more about bringing a foreign worker to Canada, please contact Campbell Cohen today.