New Updates To The TFW Program Bring Higher Wages But Fewer Approvals

These changes aim to protect Canadian workers while also addressing the needs of the job market. The updates include raising wages related to the Labour Market Impact Assessment (LMIA) process and enforcing stricter rules for hiring foreign workers. The goal is to encourage employers to hire more Canadians, while also helping to protect temporary foreign workers from fraud and abuse. 

Key Takeaways: 

• Starting November 8, 2024, employers must pay workers in the high-wage LMIA stream at least 20% more than the median wage in the province or territory of work.
• The shift in wage requirements is expected to result in 34,000 more low-wage LMIA requests, imposing stricter obligations on these employers.
• Starting October 28, 2024, employers can no longer use attestations from accountants or lawyers to prove their business is legitimate. 
• Combined with other policies introduced to restrict the TFW Program, as many as 20,000 fewer positions may be approved.

What Are The Proposed Changes? 

Today’s announcement introduces two major changes to the TFW Program. These are: 

• To apply under the high-wage LMIA stream, employers must pay a wage at least 20% more than the median wage in the province or territory of work. 
• A change in accepted documents to prove business legitimacy.

Here is what these changes look like in more detail:

Change to Wage Requirements

Effective November 8, 2024, the median wage used to determine whether an LMIA application follows the high-wage stream or low-wage stream will increase by 20% above the current median wage in each province or territory. 

Here is what the new wage requirement will look like: 

This increase is expected to push more applications into the low-wage stream, where stricter rules apply, such as additional requirements for housing and transportation, as well as a cap on the number of foreign workers an employer can hire. 

According to Boissonnault, this change is aimed at boosting wage growth for Canadians while protecting vulnerable foreign workers from exploitation. It is expected to result in 34,000 applications moving from the high-wage stream to the low-wage stream.

Proving Business Legitimacy

Another notable change is the removal of attestations from accountants or lawyers as proof of business legitimacy, effective October 28, 2024.

Proving business legitimacy is an essential part of most LMIA applications. This process checks if the job offer under assessment is genuine and legitimate.

To be approved, employers must show that:

• Their business is operating in Canada and providing a good or service.
• The job they are offering meets the actual needs of their business.
• They can follow all the terms of the job offer.
• They will have no issues following the rules of the program.

All four conditions must be met for a job offer to be considered genuine. If one is not met, the LMIA application will be denied.

From October 28, 2024 attestations will no longer be accepted. Employers will need to provide other approved documentation such as:

• A valid municipal/provincial/territorial business license,  
• Their most recent T4 Summary of remuneration paid, and
• Their most recent T2 Schedule 100 Balance sheet information and T2 Schedule 125 Income statement information. 

The government will also rely on sharing information with provinces and territories and existing employer registries to ensure business legitimacy.

Summary Of The TFW Changes To Date

In case you missed it, here’s a recap of the changes to the TFW Program made since September 2024:

• The Government of Canada will no longer process LMIAs for low-wage positions in Census Metropolitan Areas (CMAs) with an unemployment rate of 6% or higher, except in certain high-demand sectors.
• Employers are limited to hiring a maximum of 10% of their total workforce through the TFW Program, with some exceptions for high-demand industries.
• Employers can no longer use attestations from accountants or lawyers to prove their business legitimacy.
• The median wage threshold used to classify positions under the low-wage or high-wage streams will increase by 20%.

These changes combined are expected to result in 20,000 fewer TFW Program approvals and reflect the government’s commitment to ensuring that the TFW Program operates in a way that both protects Canada’s labour market and safeguards the rights and interests of temporary foreign workers. 

Further changes are expected as the government continues to monitor labour market conditions and the program’s impact on the economy.

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