Earlier this week, the federal government rolled back its 2022 decision to deregulate the Temporary Foreign Worker (TFW) program. This means that most businesses can now only have 10% of their staff as temporary foreign workers, and businesses in urban areas can no longer hire temporary foreign workers if the local unemployed.
ment rate is above 6%. While these changes are a positive start, they don’t go far enough in addressing the issues with the program.
The most crucial reform still needed is ending the closed-permitting system, which ties a worker to a specific employer. The United Nations has labeled this system as a “breeding ground for contemporary forms of slavery” because it creates a dependency where workers can’t protect their rights without fear of deportation. Many workers also go into debt by paying recruitment brokers, making it even harder for them to leave bad working conditions. Allowing workers to switch employers freely would help protect their rights.
The low-wage, non-agricultural stream, which lets businesses like fast food restaurants and convenience stores bring in temporary foreign workers for less than the provincial median wage, is deeply flawed and should be abolished. It’s contributing to the low levels of youth employment, as companies prefer to hire foreign workers rather than train local youth. Despite the need for more jobs for young people, only 46% of 15-to-19-year-olds had summer jobs this July, a significant drop from recent averages. The federal government’s recent freeze of this stream in Montreal is a hopeful first step toward eliminating it nationwide.
The TFW program also keeps wages low because employers can hire cheaper foreign workers instead of raising salaries. This happens in both low-wage and high-wage jobs. For example, the number of administrative assistants in the high-wage stream has increased dramatically since 2016, suggesting that local training might be a better solution. Canada should restrict the TFW program to specific occupations and ensure that any workers brought in are paid above-market wages to avoid wage suppression.
There are legitimate cases where the TFW program is necessary, such as for specialized workers in nuclear power or healthcare shortages. However, these temporary solutions should not replace the need for permanent staffing and better local training. The federal government has promised a 90-day review of the program and hinted at more changes.
While this week’s changes are a step in the right direction, they are not enough. I remain cautiously optimistic that the government will make the substantial reforms the program needs.