Changes to temporary foreign worker program

The federal government introduced major, sweeping reforms to the temporary foreign worker program Friday that will slash the number of low-skilled workers in Canada and pose a challenge to companies looking to hire temporary help.

Starting today, employers in the food, accommodation, and retail trade sectors will be barred from applying for temporary workers in provinces and territories with an unemployment level above six per cent.

Application fees will jump from $275 to $1000 per worker, effective immediately, the government said Friday. Amongs other streams, the fee hikes also apply to live-in caregivers and on-farm primary agricultural workers — streams that were otherwise excluded from changes announced Friday.

While the government has lifted the moratorium on food services applied in April, employers in all industries will now be subject to a cap on the number of low-wage workers they can hire. Low-wage temporary foreign workers will now be capped at 10 per cent of the workforce per employer, per worksite.

Rather than breaking up the program by employment categories, the government has decided to define employees based on their wage categories.

“Wage is a more objective and accurate reflection of value of skill level and local labour supply,” the document prepared by the federal government states.

Low-wage workers, formerly classified low-skilled workers, are those below a province’s or territory’s median wage. Anyone worker who is paid above median wage will not be subject to the cap.

The full cap will be implemented incrementally, starting at 30 per cent immediately, 20 per cent in July 2015 and 10 per cent in July 2016.

Employers with workforces already below 30 per cent will see their rates frozen. For example, if 25 per cent of a company’s workforce is made up of low-wage temporary foreign workers it will not be allowed to raise its cap to the full 30 per cent.

The delayed implementation gives employers time to find Canadian workers to fill labour shortages, a department official told reporters on background.

Data provided by the government shows that the cap is expected to reduce the number of low-skilled workers – now called low-wage workers – by 16,278 workers or 52 per cent in three years time.

Ontario and Alberta are the two provinces hardest hit by the change. Alberta will drop from 14,307 low-wage workers to 8,407 by the time the cap is fully implemented. Ontario will go from 4,419 low-wage workers to 1,369.

Current agreements between the federal government and some provinces will also change. Right now, five provinces and one territory (Nova Scotia, Ontario, Alberta, British Columbia and the Yukon) have side agreements that allow employers to bring in temporary foreign workers to their provinces.

In addition to the cap, low-wage workers will only be allowed to stay in Canada for two years, down from four under the current program. Employers will also have to apply for a Labour Market Impact Assessment (LMIA) – the approval required before hiring most categories of foreign workers – every year. The LMIA will now be valid for a one year period rather two years under the old program.

Employers who want LMIA’s will have to prove they tried to hired Canadians, including providing data about how many people applied for a job, and how many people were interviewed. The government will then match that information with local EI and unemployment data.

Employers will also have to provide transition plans to show how they intend to wean their companies off high-skilled workers. That plan will require employers to show how they intend to train local workers to fill those positions.

Canadians will also be allowed to apply directly to job openings on Jobs Bank.

News of the long-awaited reforms comes after a spate of allegations of abuse that forced the government to repeatedly defend the merits of the program in question period and in the media. Last year, the Royal Bank of Canada was accused of replacing Canadian workers with cheaper temporary foreign workers. Then, in April, three McDonalds restaurants in Victoria were banned from the program by Employment and Social Development Canada after reports surfaced that they were giving temporary foreign workers priority status or more hours than their Canadian colleagues.

The reformed program includes significant penalties of up to $100,000 and imprisonment of up to five years for employers who are found to have broken the Immigration and Refugee Protection Act, or abused the program.

Employers who intentionally misrepresent or give inaccurate information on their Labour Market Impact Assessment – formerly known as a Labour Market Opinion or LMO – can be fined up to $100,000.

“Canadian Interests” includes TFW in Canada under reciprocal employment and employment benefit arrangements, as spouses and common law partners and in relation to research and studies.

In addition to increasing penalties, the government has committed to increasingly the number of inspections and criminal investigations. One in four employers using the program will be inspected each year, according to the document prepared by the government.

When asked, a government official speaking on background said roughly 20 additional inspectors will be hired to deal with the heightened demand.

Employers under investigation will be stripped of their ability to hire temporary foreign workers and will be unable to fill labour shortages with temporary help until they have been cleared of any prospective wrongdoing.

The government has also created a second program, the International Mobility Program that will be operate within the Department of Citizenship and Immigration. The program is aimed at advancing Canada’s broad economic and cultural interests. Unlike the temporary foreign worker program, the International Mobility Program will not be based on employer demand, will not require a labour market impact assessment and will be largely based on international agreements, like NAFTA.

More to come.

With files from Kelsey Johnston