The new Canada Temporary Foreign Worker (TFW) program

By , on July 19, 2014


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The Temporary worker Program (TFWP) was launched as a limited and last resort measure to bring in foreign workers in recognition of the fact that foreign workers of varying skills and job categories are vital to Canada’s economy and that not all jobs can be filled or are wanted, by Canadians. Recently, the program has come under intense scrutiny following a growing criticism from various sectors that hiring TFW especially in regions or provinces with high unemployment rate has been seriously undermining Canadians’ opportunities in the labour market. As well, abuses suffered by TFWs in the hands of employers have been a serious concern over the years.

In response to the public backlash on the TFWP, the government overhauled the program. On June 20, 2014, the new Temporary Foreign Worker Program (TFWP) was introduced, featuring the following main reforms:

• Labour Market Opinion (LMO) is replaced by Labour Market Impact Assessment (LMIA)
which involves a more rigorous scrutiny of the employers application to bring in a TFW

• Application fee for an LMO of $275 per position has increased to $1,000 per position for
an LMIA

• The main criteria for administering the program will be wage levels. Jobs are categorized
as low-wage and high-wage.

• Caps on Low Wage TFW limiting the number of TFW that an employer can hire

• Duration of work permit for TFW reduced from maximum of 4 years to 2 years

• Stronger enforcement, more frequent inspections and stiffer penalties

Labour Market Impact Assessment
The process to hire a TWF begins with the filing of an application for an LMO (now LMIA) by the employer with the Employment Services Development Canada (ESDC) and submitting all the required documentations including proofs of advertising to give Canadians the first chance at applying for the job.

The new LMIA process is more comprehensive and rigorous in terms of providing proofs and documentations of the recruitment effort for local workers. 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.

LMIA Fee
Until July 2013, there was no fee for an LMO application. A fee of $275 was being collected starting June 2013 until June 20, 2014 when the fee was increased to $1,000 per position. The fee will be evaluated and adjusted to ensure that it adequately covers the government’s expense of processing an application.

New Criteria based on Wages
The criteria for administering the TFWP based on skill level and type in accordance with Canada’s National Classification Occupation (NOC) has been replaced by wage criteria. The primary categories under the new TFWP are:
High-wage. Positions at or above the provincial/territorial median wage. Examples are managerial, scientific, professional and technical positions as well as the skilled trades.
Low-wage. Positions 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.
Highest-demand, highest-paid or shortest-duration. In-demand occupations (skilled trades), highly paid occupations (top 10%) or short-duration (120 days or less) will have a short processing time.

Cap on Low-Wage Temporary Foreign Workers
Before the reforms, there was no limit on the number of TFWs that an employer can hire and thus, many companies created their business models based on the TFWP notwithstanding that the program was meant to bring TFWs into Canada on a temporary basis and for a limited period. Now, employers with 10 or more employers may hire low-wage TFW corresponding to only 10% of the proportion of their workforce per worksite. A couple of years are allowed employers over the 10% cap to adjust to the new cap.

Refusal to process LMIA applications
The government will refuse to process LMIA applications for low-wage, low-skilled occupations that require little education or training from employers in the accommodation and food service sector and retail trade sector in economic regions across Canada that have an unemployment rate of 6% or higher. These jobs are food counter attendants, kitchen helpers and related occupations; light duty cleaners; cashiers; grocery clerks and store shelf stockers; construction trades helpers and labourers; landscaping and grounds maintenance labourers; other attendants in accommodation and travel; janitors, caretakers and building superintendents; specialized cleaners; security guards and related occupations

Reducing the Duration of Work Permits
The duration of work permits for low-wage positions will be limited to a maximum of 1 year, reduced from 2 years before. Thus, employers of low-wage TFW must reapply every year for an LMIA. The new work permit duration does not apply to temporary foreign workers currently in Canada holding valid work permits.

Enforcement and Penalties
ESDC and CIC were granted broader inspection powers and more inspections will be conducted over time to ensure compliance. Ban and stiffer penalties, up to $100,000 may be imposed for employers who break the rules.
(Source: Government news releases on the new TFWP)
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Grace and Leo are licensed immigration consultants and members of the Immigration Consultants of Canada Regulatory Council (ICCRC) . For questions or consultations, they could be reached at onthemovecolumn@gmail.com or by phone at (778) 840-4295 – Grace and (778) 227-7679 – Leo.