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Overview of Temporary Foreign Worker (TFW) Program Changes
The Canadian government has introduced significant updates to the Temporary Foreign Worker Program, affecting how jobs are classified in the high-wage and low-wage streams. These changes aim to better protect the Canadian labor market and ensure fair wages.
Key Update: New High-Wage Thresholds
Starting November 8, 2024, the new high-wage threshold is set at 20% above the median hourly wage as of April 2, 2024. This adjustment reclassifies many positions between high-wage and low-wage categories.
Example: Ontario
- Previous Classification: Median wage was $28.39 per hour. Positions at this rate or higher were classified as high-wage.
- New Threshold: The new high-wage requirement is $34.07 per hour.
- Effect: A position paying $29.50 per hour is now classified as low-wage, requiring compliance with additional regulations such as a 10% cap on temporary foreign workers and other recruitment obligations.
High-Wage vs. Low-Wage Stream Requirements
- High-Wage Stream:
- Positions must offer wages at least 20% above the median hourly wage.
- No cap on the number of TFWs.
- No restrictions based on unemployment rates in Census Metropolitan Areas (CMAs).
- Employers must submit a Transition Plan to recruit or train Canadians.
- Low-Wage Stream:
- Positions offering wages below the new threshold are classified as low-wage.
- Employers must comply with:
- A 10% cap on TFWs in the workforce.
- CMA unemployment restrictions (no LMIA applications in CMAs with 6% or higher unemployment).
- One-year LMIA validity, transportation costs, and housing assistance.
- Additional recruitment activities targeting underrepresented groups.
Expected Impact of Changes
The increase in the high-wage threshold will likely lead to more jobs being classified as low-wage, resulting in stricter conditions. An estimated 34,000 positions may shift from the high-wage to low-wage stream, potentially reducing the number of approved positions by up to 20,000 due to these new restrictions.
Summary for Employers and RCICs
Employers looking to hire TFWs should carefully assess the wage offered to determine the appropriate stream:
- High-Wage Positions must meet the new threshold and require a Transition Plan.
- Low-Wage Positions will involve additional recruitment efforts, compliance with TFW caps, and adherence to CMA unemployment rates.
Employers previously offering wages near the old median should reassess their wage offers, as these jobs may now fall into the low-wage category, bringing additional restrictions. Consulting with relevant professionals for compliance with the new regulations is strongly advised.
These changes are designed to protect Canadian workers, ensure competitive wages, and limit the misuse of the TFW Program. By prioritizing domestic talent, the government aims to reduce reliance on temporary foreign workers while addressing the country’s labor needs.