Businesses face new limits on temporary foreign worker program

Starting today, employers in Canada will encounter new restrictions on hiring low-wage temporary foreign workers as part of a federal policy shift designed to encourage businesses to hire workers already within the country.

The key changes include:

- Employers can now hire only 10 per cent of their workforce through the low-wage stream of the program.

- Employers located in census metropolitan areas with unemployment rates above six per cent are prohibited from using this hiring stream.

- Contracts for low-wage positions will generally be capped at one year.

Certain sectors, like healthcare and construction, are exempt from these rules.

These restrictions come as the government tightens the temporary foreign worker program, which was loosened during the COVID-19 pandemic. The low-wage stream has seen significant growth, with the number of approved positions nearly quadrupling from 21,394 in 2018 to 83,654 in 2023.

This stream applies to jobs with wages below the median hourly rate in a given province or territory. Employers are required to offer wages comparable to those paid to Canadian and permanent resident workers in similar roles.

Christopher Worswick, an economics professor at Carleton University, supports the changes, noting that the temporary foreign worker program may suppress wage growth. He believes it gives businesses the option to hire from abroad rather than raise wages to attract local talent. While agreeing with the new restrictions, Worswick suggests the government should go further by phasing out the program entirely and instead focus on high-skilled, permanent immigration.

Some business owners argue they've exhausted local hiring options before resorting to the temporary foreign worker program and worry that these new rules could jeopardize their operations. Michael Aitken, owner of El Mariachi Tacos and Churros in Mississauga, Ontario, says he relies on the program to hire specialized cooks from Mexico, as skilled workers are hard to find locally. "Without the cooks that we have, I think our doors will be closed," Aitken said.

Restaurants, a significant employer of temporary foreign workers outside agriculture, are particularly affected. According to federal data, cooks, food service supervisors, and food counter attendants were among the most commonly approved positions under the program last year.

Restaurants Canada, an industry advocacy group, supports reducing reliance on the program but seeks government assistance in transitioning away from it. The group has proposed a job-matching system to connect newcomers and asylum seekers with open restaurant roles, offering training to help them adapt. "We still are facing labour shortages across the country," said Maximilien Roy, federal and Quebec vice-president of Restaurants Canada, citing 73,000 vacancies in the sector.

Employment Minister Randy Boissonnault's office noted that the federal government spends more than $3 billion annually on skills training and is in ongoing discussions with Restaurants Canada.

The Migrant Workers Alliance for Change, however, criticized the new restrictions, arguing they do not grant additional rights to migrant workers. The organization contends that reducing migrant numbers won't address exploitation, advocating for permanent resident status for all migrants to ensure equal rights.

According to Statistics Canada, the national unemployment rate reached 6.6 per cent in August, a 1.1 percentage point increase from the previous year, with youth unemployment seeing the largest rise to 14.5 per cent.

In its release, the federal government emphasized that employers should invest in the "full range" of Canadian workers, including young people, newcomers, and people with disabilities, while also focusing on training and upskilling current employees. The government will continue to monitor the labor market and may implement further changes to the program if necessary.