Canada Plans to Reduce Foreign Worker Dependency, Invest in Local Talent

Canada plans to halt the processing of Labour Market Impact Assessments (LMIAs) for low-wage jobs in cities with an unemployment rate of 6% or higher, starting September 26, 2024.

An LMIA is a document Canadian employers may need before hiring a foreign worker.

EKO HOT BLOG gathered that this decision, reported by Immigration News Canada, is part of broader reforms to the Temporary Foreign Worker (TFW) Program, aimed at reducing reliance on foreign labor and prioritizing Canadian talent.

The TFW Program allows non-Canadian citizens or permanent residents to work in Canada in roles experiencing labor shortages that Canadians have not filled.

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Exceptions to this freeze will apply to critical sectors such as primary agriculture, food processing, fish processing, construction, and healthcare, where LMIA processing will continue.

Additionally, employers will face a new cap of 10% on the proportion of their workforce that can be hired through the TFW Program, down from the previous 20% limit introduced in March 2024. The maximum employment duration for low-wage stream workers will also be reduced from two years to one year.

Minister of Employment, Workforce Development, and Official Languages, Randy Boissonnault, emphasized the government’s goal of investing in the Canadian workforce. He stated:

“The Temporary Foreign Worker Program was intended to address labor market shortages when qualified Canadians were unavailable. Given that more Canadians are now qualified for open positions, these changes will prioritize Canadian workers and ensure the program aligns with our economic needs.”

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Employers are encouraged to tap into domestic talent pools, including young people, newcomers, and persons with disabilities, and to invest in retraining and upskilling current employees.

The government will closely monitor labor market conditions and make further adjustments to the TFW Program as necessary. A review of the program is planned within the next 90 days, which may lead to modifications in the high-wage stream, sectoral exceptions, and processing of existing LMIA applications.

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These changes are part of Canada’s efforts to reverse pandemic-era policies designed to address severe labor shortages. With the unemployment rate rising to 6.4% in June 2024, the government has shortened the validity of LMIAs from 18 months to 6 months and reduced the cap on temporary foreign workers from 30% to 20%.

On August 20, 2024, a temporary freeze on new TFW approvals for low-wage jobs in Montreal, with wages below $27.47 per hour, was approved, effective September 3, 2024. This means that starting next month, Montreal will temporarily stop approving new TFW applications for low-wage positions paying less than $27.47 per hour.

These measures are intended to prioritize Canadian workers in the job market, with further adjustments to the program anticipated as the labor market evolves.

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