Employment and Social Development Canada (ESDC) has introduced significant reforms to the Temporary Foreign Worker Program (TFWP), further tightening regulations and raising wage requirements for foreign workers coming to Canada under the high-wage stream.
These changes are aimed at ensuring the program remains fair and effective while promoting better working conditions for temporary foreign workers. Two key modifications have been announced, one relating to minimum wage requirements and another concerning business legitimacy verification processes for employers.
1. Increased Wage Requirements for High-Wage Stream Workers
Effective November 8, 2024, temporary foreign workers applying through the high-wage stream of the TFWP will face new minimum wage requirements. Under the revised guidelines, employers hiring foreign workers in this category will need to offer wages that are at least 20% higher than the median wage for a given position, as determined by the region in which the worker is employed.
This wage increase is expected to impact approximately 34,000 workers across Canada, leading to an hourly wage rise of between $5 to $8 CAD, depending on the job and location. For instance, if the median wage for a specific position in Ontario is $25 per hour, employers will now need to offer at least $30 per hour for workers to qualify under the high-wage stream.
The federal government aims to use this wage increase as a tool to improve conditions for temporary foreign workers while also encouraging employers to focus on hiring Canadians where possible. By requiring higher wages, the government hopes to balance the need for temporary foreign workers with the need to protect the domestic labor market from undue pressure or wage suppression.
Rationale Behind the Wage Increase
The wage hike is part of a broader strategy to ensure that temporary foreign workers are not being used as a low-cost alternative to hiring Canadians or permanent residents. With labor shortages becoming increasingly common in certain sectors, the federal government wants to ensure that the TFWP is being used appropriately, meaning it should fill genuine gaps in the labor market rather than creating downward pressure on wages or working conditions.
Moreover, the new wage requirement is also intended to provide better income security for foreign workers, especially those working in industries or regions where wages tend to be lower. The wage bump will help foreign workers earn more competitive wages, enabling them to cover living expenses in Canada and contributing to the overall health of the Canadian economy.
2. Changes to Business Legitimacy Verification
Another important change coming to the TFWP is the elimination of the use of attestations from professional licensed accountants or lawyers as proof of business legitimacy for employers. Starting on October 28, 2024, employers will no longer be able to rely on these attestations when applying for the TFWP.
In the past, many employers used these professional attestations to confirm their business operations when seeking to hire temporary foreign workers. However, the federal government has decided to phase out this option in an effort to tighten verification processes and reduce potential misuse of the program.
Instead, the government will now require more direct forms of verification. Minister Randy Boissonnault, who announced the change, emphasized the importance of ensuring that employers participating in the TFWP are conducting legitimate and compliant business operations. This change is expected to reduce the likelihood of fraudulent applications or the use of foreign workers in illegitimate business practices.
3. Strengthened Collaboration with Provinces and Territories
Minister Boissonnault also outlined the government's intention to strengthen collaboration with provincial and territorial governments, as well as employment registries, to address misuse and abuse within the TFWP. By expanding on existing information-sharing agreements, the federal government seeks to create a more transparent and accountable system for employers and workers alike.
This increased collaboration will allow for more comprehensive monitoring of the TFWP, ensuring that foreign workers are employed under fair conditions, while preventing exploitation and abuse by employers. Employment registries will play a key role in tracking employment patterns and identifying potential violations of the program's rules, further contributing to the program's overall integrity.
The recent changes to the Temporary Foreign Worker Program demonstrate the federal government's commitment to improving labor standards for temporary foreign workers while ensuring the program is used appropriately by employers. The wage increase in the high-wage stream, along with stricter verification processes for business legitimacy, are steps toward fostering a fairer labor market for all workers in Canada. By increasing wages and tightening enforcement mechanisms, the government aims to strike a balance between meeting labor demands and protecting both foreign workers and Canadian employees from exploitation. As the TFWP evolves, ongoing collaboration with provinces and territories will be essential to maintain its integrity and effectiveness in addressing labor shortages across the country.
