Canada to Set Temporary Resident Targets, Starting Fall 2024

Based on our early calculations, this equates to a decrease of approximately 456,000-475,000 (or around 19%) temporary resident permits from current levels. Given the recent reduction in the number of study permits for 2024 and 2025 and the fact that international students make up around 42% of temporary residents in Canada, the international student cap may account for around 30% of this reduction. During the government brief, Minister Marc Miller noted that the federal government may consider further decreases to the international student cap in the future, but that the government is waiting on feedback from the provinces before making any decisions. As a result, these figures are speculative at this point in time and we are waiting on further announcements from the government regarding precise levels. 

Key Takeaways: Changes to Canada’s Temporary Foreign Resident Policy

• Canada will expand its Immigration Levels Plan to include targets for temporary residents.
• Canada’s unemployment rate is rising and there is less of a gap today between labour availability and job inventory. So, the volume of temporary workers required today is smaller than it has been in recent years. 
• Canadian employers in most sectors will be limited to 20% of their workforce being temporary foreign workers. 
• The government will require employers to consider hiring asylum seekers and underrepresented groups with valid permits for open jobs before applying for an LMIA. 
• Canada will review the wages of temporary foreign workers every year to ensure these workers are receiving competitive wages. 

“Recently, Canada’s temporary residents volume has increased significantly, now reaching up to 2.5 million (6.2% of our population, in 2023). Therefore, in our levels planning, we will include a target in order to reach an adequate volume of temporary residents Canada can welcome.

As a starting point, we are targeting a decrease in our temporary residents population to 5% over the next three years. This target will be finalized in the fall, after consulting our provincial and territorial counterparts and as part of our annual levels planning.” — Immigration Minister Marc Miller

What You Should Know About The Changes To Canada’s Temporary Foreign Worker Policy

Why is Canada capping the number of temporary residents?

Canada added 804,901 temporary residents to its population in 2023, bringing the total number of temporary residents in Canada to around 2.6 million in January 2024.

The proposed changes are designed to address some of the current challenges in Canada’s immigration system, including inefficiencies in the immigration process and sustainability issues, such as the high cost of living and Canada’s housing crisis. This will likely impact temporary residents across a range of programs, including international students and International Experience Canada workers (working holiday makers in particular).

Will workers in Canada be affected? 

We are waiting on more information from the government on how they will reduce numbers. Within the announcement, IRCC stated that they will work to expand its immigration levels to target residents. 

It is unlikely that the government will cancel existing temporary foreign worker permits. However, it may restrict eligibility and levels in the future. So, while workers are not impacted today, it may make it more challenging when it comes time to re-apply for a different program in the future. 

How will this impact Canadian employers?

While we are waiting on updated program information to be published by the Canadian government, Employment Minister Randy Boissonnault outlined in the recent media release that most employers will have a reduced limit for temporary workers. 

Outside of key sectors, employers were previously permitted to draw up to 30% of their workforce in the low-wage stream. This will be reduced to 20% to reduce reliance on temporary resident workers. 

Certain key sectors will be permitted to maintain higher levels of temporary foreign workers, at least in the short term. 

The health care and construction sectors are exempted from this change until at least August 31 of this year. Employers in these key sectors will be able to maintain temporary foreign worker levels of up to 30%. 

Agriculture sector employers and other seasonal employers who meet all the other requirements are also exempt from the reduced temporary worker limits. The existing limits will apply. 

This means that if a company is currently operating at 30% of foreign workers through the TFWP in low wage positions, they will not be able to use the TFWP until their reliance on foreign workers decreases. 

In their announcement, IRCC also implied that there will be more onus on the Canadian employers seek candidates already in Canada before they resort to hiring a foreign worker. At present, to secure a positive LMIA, employers must show that they have tried to hire a Canadian citizen or permanent resident with a focus on candidates from an underrepresented group. The announcement yesterday indicates that there will be additional advertising requirements in the form of targeting underrepresented groups with valid temporary status in Canada including those with Asylum claims, Post Graduation Work Permit holders and youth workers under Canada’s International Experience Class.

We do want to reiterate that this commentary is based on what we heard in the media release. This announcement may be subject to change when IRCC publishes its policy. Please subscribe to receive updates in the future as they are published. 

How will this announcement affect applicants outside of Canada?

It is unclear how this will affect applicants outside of Canada other than the fact that Canada may welcome fewer temporary residents over the next 3 years. 

In addition to this, as of May 1, 2024, workers who have received an LMIA through the temporary foreign worker program must activate the LMIA within 6 months of issuance except for construction and healthcare professionals.

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Which Programs Will Be Affected By These Changes?

The government plans to meet to discuss exactly how these changes will affect each program, so we don’t have details at the moment.

However, we do know that the temporary resident population is currently made up as follows:

42% international students (a program that has already been capped)

9% temporary foreign workers under the Temporary Foreign Workers Program

5% asylum seekers

44% temporary workers under the International Mobility Program, as follows:

• 26% post-graduate work permit holders
• 9% spouses of students (another program that is likely to decrease in coming years due to recent changes to Canada’s international student policies)
• 10% reciprocal youth exchange programs, including IEC.
• 12% spouses of skilled workers
• 26% arrivals, which includes CUAET and other humanitarian pathways.
• 17% inter-company transfers, trade agreements, and others.

We are yet to see how the government will allocate the reduction amongst these categories. However, as outlined above, the government has not ruled out additional decreases to the number of international student permits being granted annually.

How will this affect the overall immigration targets?

Minister Miller in his statement stated multiple times that he will focus PR efforts and draws on targeting individuals in Canada.

As part of our efforts for temporary residents to transition to permanent residency, we will have more domestic draws for us and ask provinces and territories taking part in the Provincial Nominee Program to do the same with their allocations.

What does this mean at a federal level?

We can take from this statement that the Express Entry system will increase efforts to target in – Canada applicants, namely those with Canadian work experience. With this, we can expect the return of Canadian Experience Class draws.

What does this mean at a provincial level? Whilst there are over 80 PNP’s, the reality is the majority of these already require the applicant to have previous work experience in the province therefore the impact could be minimal.

We will likely see the biggest difference in programs that use the Express Entry system to source applicants, like Ontario’s Human Capital Stream and Saskatchewan’s International Skilled Worker: Express Entry stream. These programs do not require the applicant to have experience in Canada, but are responsible for bringing a substantial number of applicants to Canada, with 4,985 nominations being issued under the Ontario’s Human Capital Stream last year.

What does this mean for Express Entry applicants?

If Minister Miller does proceed with Canadian Experience Class draws, we may expect a substantial drop in the CRS score cut off for in- Canada applicants, especially considering the last CEC draw which took place in September 2021 had a CRS cut off of 462.

However if you look at the trend of general draws we have seen in the last few months, considering how high the CRS cut off has been, It is likely that a number of those selected who already had Canadian Work Experience. Therefore, the impact this will have on the CRS is uncertain.

For those outside of Canada, it will make those general draws more competitive. Therefore applicants should work at improving their CRS where possible and seek out alternative routes like working in Canada or Provincial Nominee Programs.