Canada Clarifies How Stricter Rules For Temporary Workers Will Operate

In August 2024, Immigration, Refugees and Citizenship Canada (IRCC) announced extensive changes to the Low-Wage Stream of the Temporary Foreign Worker Program (TFWP), along with hints of a reduction in the number of permanent residents admitted to Canada each year. These changes included that LMIAs for Low-Wage Stream positions would be limited to one year and that they would be restricted in certain areas with high unemployment. This is in addition to earlier changes which restricted employers to hiring no more than 10% of the total workforce through the temporary work permit programs. 

The most recent announcement clarified that the 10% employer cap on low-wage workers will extend to occupations that fall under the Traitement Simplifié. Employers operating in the healthcare, construction, and food processing sectors are exempted from this restriction and, instead, have a 20% cap on temporary workers. 

The updated announcement also clarified how the 6% unemployment rate would be calculated for Census Metropolitan Areas (CMAs). For context, employers operating in a CMA with an unemployment rate of 6% or higher will not be eligible to receive an LMIA. The unemployment rates are going to be based on the rates provided in the first Labour Force Survey of each quarter. In other words, it will be updated 4 x each year. 

A Summary of Changes to Come

• With limited exceptions (namely in the food security, healthcare, and construction sectors), Labour Market Impact Assessments (LMIAs) under the Low-Wage Stream of the TFWP, will not be processed in metropolitan areas with an unemployment rate of 6% or higher.
• No more than 10% of an employer’s workforce can be hired through the TFWP Low-Wage Stream, with exceptions for the food security, healthcare, and construction sectors.
• Work permits issued under the Low-Wage Stream will be for one year, down from two years.
• The government has not ruled out additional measures affecting the High-Wage Stream of the TFWP. 
• In the press conference prior to the news release, Prime Minister Trudeau confirmed that the government is set to review proposed immigration levels in the fall of 2024.

Get the news at a glance by watching this short reel:

Recap — What Is the Low-Wage Stream?

So far, the restrictions targeting eligibility requirements under the TFWP have been aimed at the Low-Wage Stream. Although changes to the High-Wage Stream are not off the table, let’s take a second to go over how to determine whether a position should follow the High-Wage or Low-Wage LMIA requirements.

The wage being offered to a foreign worker under the TFWP is used to determine the LMIA requirements for the job being offered. If the wage being offered is at or above the provincial or territorial median hourly wage, an employer must apply under the High-Wage Stream. If the wage being offered is below the provincial or territorial median hourly wage, an employer must apply under the Low-Wage Stream.

The provincial or territorial median hourly wage is updated annually and can be viewed here

It should also be noted that earlier this month, it was announced that certain Low-Wage Stream applications submitted between September 3, 2024, and March 3, 2025, will not be processed where the work location is in Montreal. 

The changes announced today all target the Low-Wage Stream. Now, let’s take a deeper dive into each change.  

Low-Wage Stream LMIAs will not be processed in metropolitan areas with an unemployment rate of 6%

Starting September 26, 2024, the government of Canada will refuse to process any LMIA under the Low-Wage Stream in metropolitan areas with an unemployment rate of 6% or higher. 

There are limited exceptions to this, including seasonal and non-seasonal jobs in food security sectors (primary agriculture, food processing, and fish processing), as well as construction and healthcare. 

We have gathered some data based on the most recent release from Statistics Canada, based on August 2024 unemployment rates. Note that these may change for September, so this list is illustrative only and does not reflect IRCC’s policy, which it will release once the Labour Force Survey for September is released by Statistics Canada. 

Based on recent data from Statistics Canada, we guess the following regions may be excluded under this new rule: 

St. John’s, Newfoundland and Labrador (7.1%)

Saint John, New Brunswick (6.9%)

Trois-Rivières, Quebec (6.7%)

Montréal, Quebec (6.8%)

Ottawa–Gatineau, Ontario/Quebec (6.6%)

Ottawa–Gatineau, Quebec part, Ontario/Quebec (6.8%)

Ottawa–Gatineau, Ontario part, Ontario/Quebec (6.5%)

Kingston, Ontario (6.4%)

Oshawa, Ontario (7.8%)

Toronto, Ontario (8.0%)

Hamilton, Ontario (6.7%)

St. Catharines–Niagara, Ontario (7.5%)

Kitchener–Cambridge–Waterloo, Ontario (7.1%)

Brantford, Ontario (7.0%)

London, Ontario (6.5%)

Windsor, Ontario (9.2%)

Barrie, Ontario (6.5%)

Greater Sudbury, Ontario (6.0%)

Regina, Saskatchewan (6.4%)

Calgary, Alberta (7.5%)

Edmonton, Alberta (8.6%)

Abbotsford–Mission, British Columbia (6.6%)

Employers in the following regions may still be eligible for an LMIA, assuming similar data in September 2024 compared to August 2024: 

Halifax, Nova Scotia (5.7%)

Moncton, New Brunswick (5.9%)

Saguenay, Quebec (3.9%)

Québec, Quebec (4.0%)

Sherbrooke, Quebec (5.2%)

Belleville, Ontario (5.9%)

Peterborough, Ontario (4.5%)

Guelph, Ontario (4.7%)

Thunder Bay, Ontario (3.7%)

Winnipeg, Manitoba (5.5%)

Saskatoon, Saskatchewan (5.3%)

Lethbridge, Alberta (4.9%)

Kelowna, British Columbia (4.7%)

Vancouver, British Columbia (5.9%)

Victoria, British Columbia (3.3%).

How Is the Unemployment Rate Calculated?

The unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labour force (the total number of people who are 15 years of age and over who are either employed or unemployed).

It is important to note that foreign nationals in Canada form part of the calculation when looking at the unemployment rate.

In their latest announcement, Minister Boissonnault clarified how the unemployment rate will be set per area and confirmed that it will be updated 4 times a year, in alignment with the first Labour Force Survey of each quarter. 

LMIA Low-Wage Stream cap will be reduced to 10% 

Unique to the Low-Wage Stream is a cap on the number of foreign workers an employer can hire through the Low-Wage Stream of the Temporary Foreign Worker Program.

This cap currently sits at 20% for most sectors but as of September 26, 2024, this cap will be reduced to 10%. This means that a workforce cannot comprise more than 10% of workers that came through a Low-Wage LMIA. 

The new release on September 18 provided new information about changes that would impact employers in Quebec and employers operating in in-demand sectors. These include:

• The 30% cap on in demand sectors, namely healthcare, construction, and food processing, will decrease to 20%; and
• These changes will apply to occupations that fall under the Traitement Simplifié.

Work Permits Issued For One Year, Down From Two

A final change that could have a big impact on foreign nationals working on work permits under the Low-Wage Stream is the approved duration of the work. 

Positions approved under the Low-Wage Stream will only be approved for one year. This means that a foreign national working in Canada under a Low-Wage Work Permit will only get their work permit for one year from the date of activation. If the company wishes to continue a foreign national’s employment after that one year, they need to apply for a new LMIA for the position (assuming, of course, that the employee does not have alternative means to continue working in Canada). 

From the foreign worker’s perspective, this does not offer the same level of job security and may make it harder for them to qualify for permanent residence. In light of these changes, these foreign workers should plan ahead in their immigration journey to make sure their employer renews their LMIA if needed or explore other work permit options available to them if they are not yet eligible for permanent residence.

What Has Brought About These Restrictions?

Further changes to the Low-Wage Stream were first teased in March 2024 by Immigration Minister Marc Miller and the Minister of Employment, Workforce, Development and Official Languages, Randy Boissonnault during their announcement to cap temporary residents in Canada over the next few years. 

Although some measures were first introduced back in March 2024, these new changes place further restrictions on the Low-Wage Stream, effective as of September 26, 2024. 

The Temporary Foreign Worker (TFW) Program is designed as an extraordinary measure to be used only when qualified Canadians and permanent residents are not able to fill job vacancies.

Unfortunately, the TFW Program has been used to circumvent hiring talented workers in Canada. That is why, earlier this month, Minister Boissonnault brought together business organizations to inform them that the Government of Canada was considering reductions in access to the Program, as well as strengthened compliance measures.

Minister Boissonnault in an IRCC News Release,  August 26, 2024.

It is important to note that conditions attached to the Low-Wage Stream were overhauled in response to the COVID 19 pandemic which required IRCC to loosen the conditions in response to an extraordinary labour shortage across Canada. With the pandemic now behind us, IRCC is taking steps to return the Low-Wage Stream to the status quo before the pandemic, with some additional measures. 

This is also in line with a growing unemployment rate (currently 6.4%) according to the latest data from the Labour Force Survey. 

Additional Changes 

These are not the only changes we can expect to see to the Temporary Foreign Worker Program. In the next 90 days,  we can expect to see changes to the High-Wage Stream and refusal to process LMIAs based on location, in addition to clarifications on how the above changes will be implemented.

Prime Minister Trudeau also confirmed that IRCC will be reviewing immigration targets this fall for the following years. Immigration targets are reviewed on an annual basis, so this isn’t surprising., we are eager to see if immigration targets will be reduced and what this might mean for hopeful immigrants. 

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