Canada: More Changes To The Temporary Foreign Worker Program

Last Updated: September 29 2014
Article by Jessica Young

This spring, the Government of Canada announced significant changes to the Temporary Foreign Worker Program. Employers will recall that just last year the Federal Government made changes to the program, including increasing the advertising requirements, new wage rate requirements and imposing new application fees. Click here to read our past Stringer Update on those changes.

The Temporary Foreign Worker program continues to be under fire in the media, and the Government has released some new and significant changes. Employers should pay careful attention as some of these changes are effective immediately.

Two Programs

The Government is dividing the Temporary Foreign Worker Program into two distinct programs, the Temporary Foreign Worker Program ("TFWP") and the new International Mobility Program. The TFWP will refer only to foreign workers that require a positive Labour Market Opinion, or what is now called a Labour Market Impact Assessment ("LMIA"). The International Mobility Program will encompass those foreign nationals entering Canada who are LMIA exempt.

Temporary Foreign Worker Program

Labour Market Impact Assessment

The Labour Market Opinion process is being replaced by the new Labour Market Impact Assessment process, which is more rigorous than its predecessor. For instance, the Labour Market Impact Assessment form contains new and more detailed questions regarding the employer's advertising and recruitment efforts.

New advertising requirements were imposed last year. Most notably, employers must advertise the position for 4 weeks, instead of 2 weeks prior to submitting the application. However, the Labour Market Opinion application did not require any in-depth explanation by the employer of their advertising efforts. Employers were required to show proof that the advertisement had been posted for at least 4 weeks, but did not have to provide any details regarding the recruitment efforts.

The new LMIA application form requires employers to provide detailed information regarding recruitment efforts, including the number of applications received, the number of applicants interviewed, the number of applicants offered the position, the number of individuals hired, the number of job offers declined, and the number of individuals who were not qualified to do the job. Where the employer deems an applicant to be unsuitable, it must provide an explanation as to why the applicant did not meet the requirements of the position.  Employers should ensure that detailed notes are kept as to why an applicant did not meet the requirements, as they may have to prove to Service Canada that the applicant did not have the necessary skills to perform the job.

In addition, a new Job Matching Service is being implemented so that Canadian applicants can apply directly through the Canada Job Bank for positions that match their skills and experience level. This will also allow Service Canada Officers to be more aware of the number of potential Canadian applicants as well as how closely their skills and expertise align with the position.

 High-Wage vs. Low-Wage Categories replaces NOC Code Classification

Under the former program, the primary categories in the TWFP were High-Skilled Workers and Low-Skilled Workers. This was based on the National Occupation Classification (NOC) Code for the position. Under the new program, positions will be categorized based on the prevailing wage rate, not the NOC Code. The prevailing wage rate is the median average wage, it varies by geographic region. The prevailing wage rates can be found here.

A position will be considered High-Wage if the prevailing wage rate for the position is at or above the median hourly wage for the province, and a position will be considered Low-Wage if the prevailing wage rate for the position is below the provincial median hourly wage. The median hourly wage rate varies from $17.79 to $32.53 depending on the Province/Territory. The median hourly wage rate is $21.00 in Ontario.

 New Cap on Low-Wage Temporary Foreign Workers

The Government is putting a cap on the number of foreign workers that an employer may employ in the Low-Wage category. Employers with at least 10 employees will now only be allowed to have Low-Wage foreign workers comprise 10% of their workforce. For current employers who are above the 10% limit, the Government will allow a transition period over the next couple of years, commencing at 30%, or their current level, whichever is lower, and then reducing to 20% beginning July 1, 2015 and 10% beginning July 1, 2016.

 Additional Restrictions for LMIA's for Low-Wage Positions

In regions of Canada where unemployment is over 6%, Service Canada will refuse applications in specific occupations in the Accommodation, Food Services and Retail Sectors. These are positions that require little or no education or training.  The government estimates that this will reduce the number of temporary foreign workers by around 1,000 per year.

The Government has also reduced the duration for work permits in all Low-Wage LMIAs from two years to one year. This applies to all Low-Wage LMIA applications effective immediately.

Transition Plan Requirements for High-Wage Positions

Employers that are applying for an LMIA in the High-Wage classification will now have to submit a Transition Plan which will outline the steps the employer will take to reduce their reliance on temporary workers. The purpose of the Transition Plan is to illustrate that the employer has a firm plan in place to transition to a Canadian workforce. Through the Transition Plan, the employer must select three distinct activities geared toward recruiting and/or training Canadians or permanent residents for the position.  Employers must also select one activity targeted at underrepresented groups. Employers also have the option in the Transition Plan of facilitating the permanent residency of the foreign worker. 

The Transition Plan requirements are in addition to the pre-existing advertising and recruitment requirements. Examples of strategies an employer may use to recruit and retain Canadians and permanent residents include: employee referral incentive programs, offering flexible or part-time hours, attending job fairs, offering apprenticeships, hiring head-hunters and offering financial support for relocation.

Employers should take care in creating their Transition Plans and ensure that they can fulfill its terms. If the employer wishes to make a change to the Transition Plan after it has been approved, it will need to make a request to Service Canada, the plan cannot be amended unilaterally by the employer.

Employers will need to keep records of proof that the activities outlined in their Transition Plans were carried out. All documents pertaining to the activities in the Transition Plan should be retained, for instance, invoices from job fairs, job advertisements etc. Proof of compliance with the Transition Plan may be requested by Service Canada during an inspection.

Exceptions for Certain Positions

Employers may recall that the Accelerated LMO process was canceled last year. Under that process, employers requesting an LMO in high-skilled occupations could receive an LMO within 10 days if they had received a positive LMO in the past two years.

The Government has not reinstituted this process. However, it has created an accelerated process that can be used in specific circumstances focusing on the highest-demand, highest-paid and shortest duration occupations. When specific criteria is met, an LMIA will be issued within 10 business days.

With respect to high-demand occupations, the program will initially be limited to skilled-trade jobs where the wages offered are at or above the provincial or territorial median wage rate as determined by Service Canada.

This program will also be available to employers requesting LMIAs in the highest-paid occupations, which it has indicated are those with a prevailing wage rate that is at or above the top 10 % of wages earned in a given province or territory.

In addition, this fast tracked program will be available for LMIAs where the employer is seeking the foreign worker for a short duration of 120 days or less. Service Canada will not allow for the renewal of LMIAs that have been approved on the basis of short duration unless there are exceptional circumstances.

Application Fee

Commencing last year, a $275 application fee was imposed on employers applying for an LMO. With these new changes, the application fee has been increased to $1,000.


The Government will be increasing the number of inspections that are conducted. It is anticipated that one in four employers employing workers through the TFWP will be subjected to an inspection each year. An employer may be subject to an inspection through a random audit, through a tip regarding non-compliance or if the employer is deemed to be high-risk.

Employers may recall that the scope of authority to inspect was increased significantly last year. The inspectors' powers are now similar to those of a Ministry of Labour inspector. The inspectors will be able to enter the employer's premises without notice or warrant and examine any and all things on the premises.  Inspectors may also question foreign workers and other employees with their consent. The Government has also implemented a new Confidential Tip Line that allows individuals to report abuse of the TFWP, as well as a new Complaints webpage.

Beginning in the fall of 2014, employers could face a fine of up to $100,000 for failure to follow the rules of the TFWP.  The other potential sanctions for breaking the rules include: suspension of an LMIA, revocation of  an LMIA, publication on the Government's blacklist, and a ban from the use of the TFWP. In addition, the Government will publically disclose the names of employers that have been fined and the amount of the fine on the Government's blacklist.

The Government is also intending to increase the use of criminal investigations in relation to violations of the TFWP. Under the Immigration and Refugee Protection Act, an employer could face charges for employing a foreign national that is not authorized to work in Canada, for counselling any person directly or indirectly to make a misrepresentation and for making misrepresentations.  Employers who employ person not legally authorized to work in Canada could be fined up to $50,000 and face imprisonment for up to 2 years. Employers who intentionally misrepresent or withhold information or provide false information could face a fine of $100,000 and a prison term of up to five years.

We will be providing more information on these changes to the TFWP at our 28th Annual Employers' Conference (attendees receive 6 CPD Credit Hours toward HRPA Recertification and this may apply toward 6 substantive CPD hours with LSUC). To review our complete agenda or to register click here.

 Implications for Employers

It is now more difficult than ever before to bring foreign workers to Canada. Employers intending to use the new LMIA process must plan ahead. The preparation of the application will be time consuming, as the new application form is more detailed, for instance, with respect to recruitment efforts and the creation of a Transition Plan (for employers applying in the High-Paid stream).

In addition, even if the employer meets the minimum advertising and recruitment requirements and provides a detailed Transition Plan, the application could still be rejected. Service Canada has the discretion to deny the application on the basis that the employer should have recruited differently, or if Service Canada's data suggests there is no labour shortage for the specific position, despite the fact that the employer was unable to recruit a Canadian citizen or permanent resident.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Jessica Young
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