A. The Temporary Foreign Worker Program

Following reforms introduced in June 2014, the TFW Program encompasses only those work permit streams under which temporary foreign workers can enter Canada at the request of an employer who has successfully undertaken a labour market screen, known as a Labour Market Impact Assessment (LMIA). In this respect, the TFW Program is different from the International Mobility Program work permits. Unlike the TFW Program, it does not require an LMIA and its primary objective is to advance the economic and cultural interests of Canada, rather than filling specific gaps in the labour market. Employment and Social Development Canada (ESDC) is the lead department for the TFW Program, while Immigration, Refugees and Citizenship Canada (IRCC) is responsible for the International Mobility Program.[3]

There are currently four streams under which employers can apply to the TFW Program: the high-wage stream, the low-wage stream, the primary agriculture stream, and the stream dedicated to supporting permanent residency. Each stream has specific requirements to which employers must adhere.

The high-wage stream is comprised of positions where the wage rate offered to the temporary foreign worker is at or above the provincial/territorial median wage[4], while the low-wage stream encompasses those positions with wages that are below the provincial/territorial median wage.

The primary agriculture stream allows employers to hire migrant workers from any country to work for on-farm primary agricultural positions for a maximum period of 24 months. This stream includes the Seasonal Agricultural Worker Program (SAWP), through which employers can secure temporary foreign labour from Mexico and various Caribbean countries covered under bilateral international agreements. Migrant workers under the SAWP can only work in Canada for a maximum of eight months from January to mid-December.

Finally, under the support for permanent residency stream, employers may apply to the TFW Program for an LMIA to either support an application for permanent residency, or as a mechanism to allow a foreign national to be able to work in Canada while they apply for permanent residency.

As of December 2014, the Live-in Caregiver Program is no longer a stand-alone stream. Currently, LMIA applications for caregivers are assessed in the high-wage or low-wage streams, while the live-in component is no longer mandatory. Under the TFW Program, families can hire a foreign caregiver to provide care on a full-time basis, in a private household, to children, seniors or persons with certified medical needs when Canadian or permanent resident workers are not available.[5]

B. Recent program reforms

The current parameters of the TFW Program were established as a result of a series of recent reforms, the most significant of which were announced on 20 June 2014. These reforms were aimed at limiting the reliance of employers on temporary foreign workers and on strengthening compliance mechanisms to ensure employers respect program requirements.[6]

In their appearance before the Committee, officials from ESDC indicated that the program must be used by employers as “a last and limited resort to fill their acute labour shortages on a temporary basis;”[7] thus serving the following three functions:

To fill jobs on a temporary basis until employers are able to recruit from or train the domestic workforce, or bring an individual through the immigration process.

To fill short-term, one-time, or seasonal jobs where the job does not exist after a foreign worker leaves the country.

Or, to facilitate the mobility of international talent by allowing employers to hire highly-skilled and specialized individuals who have unique skills and knowledge that can be transferred to Canadians or help create jobs for Canadians.[8]

In order to ensure these goals are met, employers must demonstrate to ESDC, through an LMIA application, that there are no Canadians or permanent residents available to do the job. The LMIA is a new labour market verification process that was introduced as part of the June 2014 reforms. It is used to determine the likely effect that the employment of a foreign worker will have on the Canadian labour market, and is issued by ESDC/Service Canada. The requirement for an LMIA is particularly important given that, in order for a temporary foreign worker to be able to apply for a work permit through IRCC, an employer must first obtain a positive LMIA.[9]

According to ESDC officials, the LMIA is “a more comprehensive and rigorous” screening mechanism than the previous Labour Market Opinion requirement. The LMIA process requires employers to indicate in their application the number of Canadians that applied and were interviewed for their available job, as well as the reasons those Canadians were not hired. Further, employers are required to attest to their awareness of the rule that Canadians cannot be laid off, nor have their hours of work reduced, at a workplace that also employs temporary foreign workers.[10]

In addition to these conditions, employers must adhere to specific advertising requirements introduced in July 2013. These include advertising in Canada for a minimum of four weeks, using recruitment methods that go beyond posting available positions on jobsites, and, in the case of low-wage positions, demonstrating that efforts have been made to hire Canadians from under-represented groups. ESDC/Service Canada will refuse to process the LMIA application where there are concerns that temporary foreign workers may have a negative impact on the Canadian labour market.[11]

In order to cover the increased cost of delivering the TFW Program in this manner, the LMIA fee was raised from $275 to $1,000 in 2014 for each temporary foreign worker position requested by an employer. From 1973, the year the program was created, to 2013, there was no application fee.[12]

The June 2014 reforms also introduced specific changes with respect to the program streams under which employers can request an LMIA, including the high-wage stream and the low-wage stream, with the purpose of ensuring employers do not become too reliant on temporary foreign labour. Employers looking to fill labour gaps in the high-wage stream, for example, are required to submit a Transition Plan with their LMIA application. In this Transition Plan, employers must outline specific recruitment and training activities in place to reduce their reliance on temporary foreign labour for high-wage positions, thus transitioning to a Canadian workforce. A Transition Plan must be provided for each position for which an employer is seeking an LMIA. Employers must report on the success of the Transition Plan should they ever reapply to hire a temporary foreign worker or be selected for an inspection.[13]

With respect to the low-wage stream, employers with 10 or more employees applying for a new LMIA are now subject to a 10% cap on the proportion of their workforce that consists of low-wage temporary foreign workers. The cap has been phased in over a period of three years for employers above the threshold and is scheduled to apply to all employers by 1 July 2016. Exemptions to the cap include on-farm agricultural primary positions, caregiver positions and, for applications received in 2016, industries hiring temporary foreign workers in low-wage seasonal positions that are no more than 180 calendar days in length.[14]

In addition to establishing a cap on the proportion of the workforce that consists of low-wage temporary foreign workers, the June 2014 reforms reduced the duration of work permits set out in the LMIA with respect to low-wage stream positions from two years to one year. This change obliges employers to reapply for an LMIA annually so that changes in labour market conditions that may have occurred over the previous year can be taken into account. Finally, effective June 2014, LMIA applications for certain low-wage positions in the Accommodation, Food Services and Retail Trade sectors are no longer being processed in economic regions with an unemployment rate that is at 6% or higher. This means that employers in those regions can no longer seek to hire foreign nationals in certain low wage positions.[15]

Irrespective of the stream, since April 2013, employers seeking temporary foreign workers have been required to pay wages at or above the prevailing wage for that occupation in the region. This wage requirement was introduced to limit the possibility of wage suppression.[16] In addition, since 2011, migrant workers can only work in Canada for a maximum cumulative duration of four years. This is in accordance with the “cumulative duration” rule, which also requires temporary foreign workers to spend the following four years either outside of Canada, or in Canada but not working, before being eligible to work again.[17]

Finally, the TFW Program is also now subject to what ESDC officials have described as “stronger” enforcement measures and “tougher” penalties meant to ensure greater employer compliance with program requirements. These changes have included increasing the number and scope of inspections, expanding the authority of inspectors, as well as launching a confidential tip line to report abuse of the program. According to ESDC representatives, since April 2014, approximately 3,800 tips have been received. These tips resulted in 640 inspections by ESDC officials, of which 220 were referred to other law enforcement agencies. A greater range of sanctions and monetary fines are also now in place for employers who break the rules of the TFW Program, including banning employers from the program, adding the names of employers whose LMIAs have been suspended or revoked to a public website, as well as fining employers up to $100,000 per violation.[18]

C. Statistical data

In their analysis of the TFW Program, officials from ESDC have noted a significant downward trend in requests for temporary foreign workers following the introduction of major reforms to the program in 2014. According to their estimates, the number of temporary foreign worker positions approved on LMIAs has decreased by 45%, from 163,035 in 2013 to 90,211 in 2015. In addition, the number of temporary foreign worker positions approved in 2015 amounts to less than 0.5% of the 19.4 million Canadians in the labour force.[19] The chart below illustrates this downward trend in relation to the various program streams.