Ensuring Canadian Workers Come First: Restricting Access to the Temporary Foreign Worker Program
Using Wage Instead of National Occupation Codes
The TFWP is administered based on wage instead of the National Occupational Classification (NOC). Wage is a more objective and accurate reflection of skill level and labour need in a given area. Temporary Foreign Workers being paid under the provincial/territorial median wage are considered low-wage, while those being paid at or above the provincial/territorial median wage are considered high-wage.
The primary categories under the former TFWP were:
High-skilled workers: includes occupations that typically require post-secondary education and/or formal certification, specifically managerial, scientific, professional and technical positions as well as the skilled trades. These occupations are coded at NOC skill type 0 or NOC skill level A or B.
Low-skilled workers: includes occupations that usually require lower levels of formal training, such as a high school diploma or a maximum of two years of job-specific training, such as general labourers, food counter attendants, and sales and service personnel. These occupations are coded at the NOC C or D skill level. It is important to note that not all low-skilled occupations classified according to NOC codes are low-paying (e.g. oil and gas drilling workers).
Seasonal Agricultural Worker Program: allows for the entry of foreign workers from Mexico and a number of Caribbean countries to meet the temporary, seasonal needs of agricultural producers when there are shortages of available Canadians.
Agricultural Stream: allows employers to hire temporary foreign workers from any country for on-farm primary agricultural positions for a maximum of 24 months when Canadian citizens are not available. Many of the requirements of the Agricultural Stream mirror the Seasonal Agricultural Workers Program since working conditions for the temporary foreign workers are similar.
Live-in Caregiver Program: enables qualified temporary foreign workers to come to Canada when Canadians are not available to provide unsupervised and full-time care for children, seniors or people with disabilities in the private residence of those persons for whom they are hired to care.
The primary categories under the new TFWP are:
High-wage: positions where the wage offered is at or above the provincial/territorial median wage; examples of high-wage occupations include managerial, scientific, professional and technical positions as well as the skilled trades.
Low-wage: positions where wage offered is below the provincial/territorial median wage; examples of low-wage occupations include general labourers, food counter attendants, and sales and service personnel.
Primary Agricultural Stream: includes positions related to on-farm primary agriculture such as general farm workers, nursery and greenhouse workers, feed lot workers and harvesting labourers, including under the Seasonal Agricultural Workers Program, which enables the entry of foreign workers from Mexico and a number of Caribbean countries to meet the temporary, seasonal needs of agricultural producers.
Highest-demand, highest-paid or shortest-duration: Labour Market Impact Assessments for in-demand occupations (skilled trades), highly paid occupations (top 10%) or short-duration (120 days or less) entries will be provided within a 10 business day service standard. As for all requests to hire temporary foreign workers, LMIAs would only be granted after a rigorous review of all of the elements of the employer’s application in each of these cases.
Live-in Caregiver Program: no change.
New Labour Market Impact Assessment
The labour market test that allows employers to bring temporary foreign workers to Canada is being transformed from a Labour Market Opinion (LMO) to a new Labour Market Impact Assessment (LMIA) process that is more comprehensive and rigorous. Employers must provide additional information, including the number of Canadians that applied for their available job, the number of Canadians the employer interviewed, and explain why those Canadians were not hired. Employers must now also attest they are aware of the rule that Canadians cannot be laid-off or have their hours reduced at a worksite that employs temporary foreign workers.
New and better sources of labour market information are used to determine if there are Canadians who could fill these positions.
LMIAs are conducted and processed by Employment and Social Development Canada (ESDC). ESDC will refuse to process applications when there are concerns that temporary foreign workers may or will have a significant negative effect on the Canadian labour market.
Cap on Low-wage Positions
The Temporary Foreign Worker Program (TFWP) was created as a last and limited resort to allow employers to bring foreign workers to Canada on a temporary basis to fill jobs for which qualified Canadians are not available. However, since there was no specific limit on the number of temporary foreign workers that a company could hire, over time many employers built their business model on the program.
For example, of the 12,162 employers who used the TFWP in 2013, 2,578 employers have a workforce of over 30 percent temporary foreign workers. Perhaps most striking, 1,123 employers have a workforce composed of 50 percent or more temporary foreign workers.
Percentage of Employer Workforce that is Temporary Foreign Workers
|TFW %||Number of employers||Estimated TFW entries|
1 This data table shows the percentage of employers’ total workforce that is made up of temporary foreign workers. It is not broken down by work site. The cap is applied by work site.
2 Excluding primary agriculture, live-in caregivers and employers with a total workforce of fewer than 10 workers
These numbers clearly show that the TFWP is no longer being used as it was intended to be used — as a last and limited resort to allow employers to bring foreign workers to Canada on a temporary basis to fill jobs for which qualified Canadians are not available. Reforms are needed to end the growing practice of employers building their business model on access to the TFWP.
Accordingly, the Government of Canada is introducing a cap to limit the proportion of low-wage temporary foreign workers that a business can employ. The cap will significantly restrict access to the TFWP, while ensuring that Canadians are always considered first for available jobs, reducing employer reliance on the program and increasing wages offered to Canadians. It is expected that this measure alone will cut in half the number of low-wage temporary foreign workers once fully implemented.
Employers with 10 or more employees applying for a new LMIA are subject to a cap of 10 percent on the proportion of their workforce that can consist of low-wage temporary foreign workers. This cap will be applied per worksite of an employer and is based on total hours worked at that worksite.
To provide employers who are above the 10 percent cap time to transition and adjust to this new cap, it will be phased in over the next couple of years. For those employers that currently have a low-wage temporary foreign worker workforce that is above the cap, effective immediately, when those employers apply for a new LMIA they will be limited at 30 percent or frozen at their current level, whichever is lower . The Government may consider lowering the cap further in the future.
This transition measure was further reduced to 20 percent beginning July 1, 2015 and will be reduced again to 10 percent on July 1, 2016. Temporary foreign workers currently working at work sites over the cap will be allowed to continue working at those sites until their existing work permits expire.
This ensures that large employers with multiple locations cannot be over their limit for low-wage temporary foreign workers at any one of their locations. For example, a large employer with an overall national workforce comprised of 5 percent temporary foreign workers cannot justify bringing in larger volumes of foreign workers at specific locations and having the temporary foreign worker staff at those locations exceed the cap.
The cap sends an important message — temporary foreign workers cannot be used as a business model and employers must do more to recruit, hire and train Canadians. This measure will help drive down the overall number of low-wage temporary foreign workers in Canada and end the distortion in the labour market caused by their prevalence in some sectors and regions.
|Province/ Territory||2013 Total Low Wage Entries||30% cap Year 1||20% cap Year 2||10% cap Year 3|
|Newfoundland and Labrador||673||174||232||254|
|Prince Edward Island||396||358||372||377|
|Canada Total||31,099||9,678 (31% reduction from 2013)||13,284 (43% reduction from 2013)||16,278 (52% reduction from 2013)|
*Does not include primary agriculture, live-in caregiving and employers with a total workforce of fewer than 10 workers
Refusing Applications in Areas of High Unemployment
Employment and Social Development Canada refuses to process certain Labour Market Impact Assessment applications in the Accommodation, Food Services and Retail Trade sectors. Specifically, any applications for positions that require little or no education or training will not be processed in economic regions with an unemployment rate at or above six percent.
For many youth, these jobs are their first opportunity to participate in the labour market and each time an employer hires a temporary foreign worker in one of these jobs it potentially deprives a Canadian from that all-important first job. This measure will reduce the number of temporary foreign workers by approximately 1,000 each year.
Employer applications will not be processed if they meet all of the following criteria:
- applying for an LMIA in a Statistics Canada economic region with an annual unemployment rate over 6% or higher;
- seeking an LMIA in a specific occupation identified under North American Industry Classification System as Accommodations & Food Service or Retail Sales (NAIC 72, 44, 45); and
- seeking an LMIA in an occupation in one of the selected National Occupational Classification Codes (see below table) skill level “D” occupations.
|NOC Code||NOC4 Title|
|6641||Food Counter Attendants, Kitchen Helpers and Related Occupations|
|6661||Light Duty Cleaners|
|6622||Grocery Clerks and Store Shelf Stockers|
|7611||Construction Trades Helpers and Labourers|
|8612||Landscaping and Grounds Maintenance Labourers|
|6672||Other Attendants in Accommodation and Travel|
|6663||Janitors, Caretakers and Building Superintendents|
|6651||Security Guards and Related Occupations|
The labour market information used to identify unemployment rates in economic regions is based on annual data from the Labour Force Survey (LFS) from Statistics Canada and will be posted on the Temporary Foreign Worker Program website.
Pending Applications for Low-wage Positions
The TFWP is also refusing to process any pending applications for low-wage positions as of . Any application that was submitted prior to , for a position where the prevailing wage is below the provincial/territorial median hourly wage, and where an opinion has not been issued, will no longer be processed. In these cases, employers will be refunded the $275 per position processing fee. All other applications will be processed as normal.
This refusal to process applications is not applicable in Quebec.
Reducing the Duration of Work Permits set out in Labour Market Impact Assessments
The duration of work permits set out in Labour Market Impact Assessments (LMIAs) are limited to a maximum of one year for all low-wage positions, rather than the 2 year duration that existed previously. Employers of temporary foreign workers must reapply every year for an LMIA, better-accommodating for changes in labour market conditions that might have occurred.
Reducing the Length of Time a Temporary Foreign Worker can Work in Canada
To ensure foreign workers are coming in on a truly temporary basis and that the program is used as a last and limited resort, and to encourage employers to make even greater efforts to hire and train Canadian workers before seeking temporary foreign workers, the Government has reduced how long a temporary foreign worker in the low-wage stream can work in Canada. This measure does not apply to temporary foreign workers currently in Canada on valid work permits.
Changing the Provincial/Territorial Temporary Foreign Worker Annexes
Five provincial/territorial governments (Alberta, British Columbia, Ontario, Nova Scotia and Yukon) currently have annexes to their immigration agreements with the Government that establish Labour Market Impact Assessment (LMIA) exemptions in their jurisdiction. In these cases, the provinces and territories may propose LMIA exemptions for certain occupations and pilot projects involving exemptions to the LMIA process can be initiated.
The purpose of these annexes was never to create a scenario where employers could hire temporary foreign workers without seeking to hire Canadians first. However, over time there has been a significant increase in the number of temporary foreign workers coming to Canada through these agreements and a number of cases have come to light where companies have used these provisions to bring in temporary foreign workers without giving Canadians the first chance at available jobs.
Accordingly, the Government has given notice that it is changing the existing agreements. As a result, more employers are subject to the new, more rigorous LMIA before being able to hire TFWs. Any new agreements with provinces and territories is much more limited in scope and better ensure that Canadians are always given first chance at available jobs.
Transition Plans for High-Wage Positions
Employers who want to hire temporary foreign workers in high-wage occupations are required (with limited exceptions) to submit transition plans with their Labour Market Impact Assessment (LMIA) application to ensure that they are taking steps to reduce their reliance on temporary foreign workers over time. This underscores the purpose of the program — which is to operate as a last and limited resort to address immediate labour needs on a temporary basis when qualified Canadians are not available.
The transition plans are in addition to the existing recruitment and advertising requirements that employers must meet to ensure that Canadians are given the first chance at available jobs. Transition plans oblige employers of high-wage temporary foreign workers to help Canadians obtain in-demand skills through activities like investing in skills training or taking on more apprentices, or an employer can provide proof that they are helping a high-skilled temporary foreign worker transition to becoming a permanent resident of Canada.
Employers are also required to undertake additional recruitment activities, including reaching out to organizations serving groups traditionally under-represented in the workforce (e.g. new immigrants, Aboriginal people, youth, Canadians with disabilities) to fill available jobs. Employment and Social Development Canada will assist employers by providing them with contacts at these organizations.
Employers need to report on the success of their transition plan should they ever reapply to hire high-wage temporary foreign workers. Employers must also report on the results of their transition plan if they are selected for an inspection.
By requiring employers to undertake measures that go above and beyond previous requirements to hire Canadians, the number of high-wage temporary foreign workers is expected to decrease.
Highest-Demand, Highest-Paid and Shortest-Duration Occupations
LMIAs for highest-demand occupations (skilled trades), highest-paid (top 10 percent) occupations or short-duration work periods (120 days or less) will now be provided within a 10-business-day service standard. As is the case for all requests to hire temporary foreign workers, LMIAs would only be granted after a rigorous review of all of the elements of the employer’s application in each of these cases. This service standard will be met by processing these applications first, not by reducing the thoroughness of these LMIAs.
Initially, the 10-day service standard for highest-demand occupations is limited to the skilled trades where the wage offered is at or above the provincial/territorial median wage. Positions in the skilled trades are essential to the development of major infrastructure and natural resource extraction projects, which are vital to Canada’s economic growth. Over time, other occupations may be added based on evidence from more and better labour market information.
The 10-day service standard is also be available to employers requesting temporary foreign workers in the highest-paid occupations — for positions where the employer is offering a wage that is at or above the top 10 percent of wages in the province/territory where the job is located, such as Physicians. This wage level indicates that a temporary foreign worker is the highest-skilled in their occupation and that those skills are not easily found in the Canadian labour market.
Finally, the 10-day service standard is also available for employers seeking temporary foreign workers for a short duration, defined as 120 calendar days or less in any occupation where the wage offered is at or above the provincial or territorial median wage. Positions falling under this category include those related to repairs to manufacturing equipment and warranty work. Renewal of short-duration LMIAs is not permitted, except in exceptional circumstances.
Foreign Pilots in Canada
In recent years, concerns have been raised that some airlines are excluding Canadian pilots from seasonal jobs by requiring job applicants to already be trained on specific types of planes (type-rating) before they are hired, which is counter to general industry standards of airlines paying for and ensuring pilots obtain their training on the specific airline’s planes after they have been hired.
The Government of Canada consulted widely on this issue, and most stakeholders agreed that seasonal variations in fleet capacity should not stop airlines from training pilots for specific aircraft. It was noted that many airlines successfully contract flight time, pilot training and other training elements, such as flight simulator time, with other airlines or with aircraft manufacturers in order to meet their training requirements. There was a consensus that there is no shortage of Canadian commercial pilots who could be trained to fly specific types of aircraft.
Based on stakeholder consultations, the following changes are being made for airlines requesting foreign pilots through the Labour Market Impact Assessment (LMIA) process.
Effective July 1, 2014, airlines must:
- meet the minimum advertising requirements for high-wage occupations;
- specify the following criteria in their job postings:
- no more than a maximum of 4,000 flight hours for a First Officer and 5,000 hours for a Captain as required experience;
- possess a valid commercial pilots' licence;
- require English and/or French language proficiency;
- include industry standard medical testing requirements for commercial flight;
- state both the legal and common names of the airline operating in Canada;
- not include as an essential or asset requirement the necessity of holding a type rating for a specific type of aircraft. However, requiring applicants to have experience flying equipment that is similar in configuration and complexity to the airline’s fleet is considered acceptable;
- indicate when training bonds will be applied and they must cover a minimum of two years employment;
- negotiate a transition plan with ESDC documenting the airline’s future efforts and commitment to decrease the reliance on foreign pilots while increasing its complement of Canadian/permanent resident pilots. The transition plan will be reviewed by ESDC for progress and can affect the outcome of future LMIA applications; and
- submit LMIA applications a minimum of three months before the first day of work to ensure Service Canada officers can thoroughly review the application. Any exception to this timeline must be requested prior to the LMIA being submitted.
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