Ottawa unveils sweeping changes to foreign-workers program

The Conservative government is launching a detailed and sweeping reform of the Temporary Foreign Worker Program, splitting it in two and imposing a long list of measures aimed at reducing its use for low-wage positions.

Employment Minister Jason Kenney and Immigration Minister Chris Alexander announced the changes Friday, following a briefing for news media.

(What is the Temporary Foreign Worker Program? Read The Globe's easy explanation)

The announcement is a clear attempt to tackle criticisms head-on, by moving to shrink the program in low-wage sectors and to improve the quality and reliability of data that inform the federal government's labour market policies.

Employer groups in low-wage sectors had urged the government not to link the program to unemployment rates. They will be disappointed – and are not likely to be pleased news that user fees will rise.

The changes are less restrictive for sectors with above-average wages, even though those categories – such as information technology workers – have also come under scrutiny.

Key points in Friday's announcement:

• The Temporary Foreign Worker Program is split into two: a smaller Temporary Foreign Worker Program will focus largely on low-skilled positions and will be managed by Employment and Social Development Canada. Hiring in this category will require approval through a new screening process called Labour Market Impact Assessments, formerly known as Labour Market Opinions. The main source countries in this category are developing countries.
• The remaining sections of the old program will continue under the name “International Mobility Programs.” It will be run by Citizenship and Immigration Canada and hires will not be screened to see if Canadians are available for the positions. These entrants are largely coming to Canada through international trade agreements and the majority are highly skilled and highly paid. The main source countries are highly developed.
• There will be no access to the program for employers in the accommodation, food services and retail trade sectors – as well as those who hire cleaners, construction helpers, landscapers and security guards – if they operate in areas of high unemployment, which the government defines as being above 6 per cent.
• The moratorium on access to the program for all employers in the food service sector has been lifted, but the new high-unemployment area provision will effectively make that moratorium permanent in parts of the country.
• Fees charged to companies that use the program are being increased to $1,000 from $275 per application.
• Employers found breaking the rules will face fines of up to $100,000. The names of employers who are fined will be disclosed.
• The maximum duration a temporary foreign worker can work in Canada is being reduced from the current four years. An official said the new limit will probably be two years, but a decision is not final. The duration of work permits is being reduced to one year from two years, requiring employers to reapply after the first year.
• A new cap on low-wage temporary foreign workers will mean that no more than 10 per cent of an employer’s work force per worksite can be made up of TFWs. Employers with fewer than 10 employees are exempt from the cap. The cap will start at 30 per cent and will change in steps to 10 per cent by July 1, 2016. Documents indicate that 1,123 employers in Canada had relied on temporary foreign workers last year to make up more than 50 per cent of their work force. “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…” states a government report released Friday.
• The program will no longer rely on national occupation categories to determine average wages. Instead, low-wage positions will be defined as those below the provincial median hourly wage. Currently, these median wages range from a low of $17.26 in Prince Edward Island to a high of $29.96 in Nunavut.
• The new Labour Market Impact Assessment, for screening jobs with lower wages and skill levels, is described as “more comprehensive and rigorous.” Employers will need to provide more documentation, including the number of Canadians that applied for the job and the number that were interviewed, as well as an explanation as to why they were not hired.
• A new fast-track option will approve foreign workers within 10 business days if they are in the highest-demand occupations, such as skilled trades, or are among the top 10 per cent for highest-paid occupations. The fast-track option will also be available for short-term work of 120 calendar days or less for jobs with above-average pay.
• Farm workers who enter Canada under the On-Farm Primary Agriculture program are exempt from the cap, the reduced timelines and the higher fees.
• The Live-in Caregiver Program is subject to the new $1,000 fee, but is not subject to the cap or to the reduced timelines. An official said the program is currently facing a separate review and further related announcements are expected.
• A new fee of $230 per work permit will apply to workers in the International Mobility Programs. The fee will pay for a new compliance system, “featuring inspections of thousands of workers.”

The government expects the changes to reduce the number of entries of low-wage temporary foreign workers to 16,278 in 2016 from 31,099 in 2013, a drop of more than half.