The Canadian Government has announced further changes to the Temporary Foreign Worker Program (TFWP) which is responsible for adjudicating Labour Market Impact Assessments (LMIA). The Honourable Randy Boissonault announced on October 21, 2024, two critical changes to its High-Wage LMIA Stream:
- Currently, the High-Wage LMIA Stream is only available for those positions that are paid above the median wage in the province or territory where the individual will be employed. Effective November 8, 2024, the eligible starting hourly wage will be increased to the median wage in the applicable province or territory + 20%; and
- Effective October 28, 2024, employers will no longer be able to submit attestations from professional accountants or lawyers to demonstrate business legitimacy.
Example of change in wage requirements
Company X wishes to hire a digital animator in Vancouver, BC and would typically utilize the High-Wage LMIA Stream as the prevailing wage for digital animators in Vancouver is $32.50/hour (above the current provincial median wage for BC which is $28.85/hour). As a result of the upcoming changes, in addition to meeting all other existing stream requirements, the digital animator must be remunerated in the amount of at least $34.62/hour (provincial median wage for BC + 20%) in order for Company X to submit an LMIA application under the High-Wage Stream. The current provincial/territorial median wages for the purposes of a High-Wage LMIA application can be found here: https://www.canada.ca/en/employment-social-development/services/foreign-workers/median-wage.html.
Potential impact
If an employer is unable to provide a wage for a particular position consistent with the new high-wage threshold and an LMIA-exempt work permit category is unavailable, the employer would need to submit a LMIA application under the Low-Wage Stream. However, a Low-Wage LMIA “refusal to process” measure has also recently been put in place. In municipalities across Canada where the unemployment rate is 6% or higher, the Low-Wage Stream would not be an option. There may be some exceptions for certain high-demand sectors, including positions in primary agriculture, construction, food manufacturing, hospitals, nursing/residential care facilities and certain in-home caregiver positions. For further details please see: https://www.canada.ca/en/employment-social-development/services/foreign-workers/refusal.html. Below are some examples of the application of the “refusal to process” measure:
Example 1
Company Y wishes to hire a food service worker at its location in Vancouver, BC where the unemployment rate is above 6%. Company Y is offering a wage of $25.00/hour for this position. Because the offered wage is below the provincial median wage for BC ($28.85/hour) and the unemployment rate is above 6% in Vancouver, Company Y would not be eligible to apply for a Low-Wage LMIA.
Example 2
Company Y wishes to hire a food service worker at its location in Victoria, BC where the unemployment rate is under 6%. Company Y is offering a wage of $25.00/hour for this position. Although the offered wage is below the provincial median for BC ($28.85/hour), the unemployment rate in Victoria is less than 6% and as such, Company Y would be eligible to apply for a Low-Wage LMIA (subject to the 10% cap – see below).
Restrictions on Low-Wage LMIA Stream
The challenge with the Low-Wage LMIA Stream is that it is subject to stricter requirements and employer obligations, including:
- A 10% cap on the proportion of temporary foreign workers (TFW) that can be hired in low-wage positions at a given work location (20% cap for certain sectors).
- Stricter recruitment requirements – in addition to advertising on the Canada Job Bank, employers must utilize at least two additional methods of recruitment that are consistent with the occupation and which target a different underrepresented group.
- Requirement to pay for the round-trip transportation costs for TFWs to the work location in Canada and to return to their country of residence at the end of their employment.
- Requirement to provide or ensure suitable and affordable housing for the TFW.
For complete Low-Wage LMIA Stream requirements, please see: https://www.canada.ca/en/employment-social-development/services/foreign-workers/median-wage/low/requirements.html.
The Canadian Government is expected to continue its review of the Temporary Foreign Worker Program and additional updates may be announced in the coming months.
These changes may have significant impacts on temporary foreign workers and employers who rely on these programs.
For more information or any questions related to the implications of these changes on your business, please contact the authors, Helen Park or Denise Alba.
