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Labour Minister MaryAnn Mihychuk speaks in the House of Commons in Ottawa on April 11, 2016.Adrian Wyld/The Canadian Press

The federal government is freezing the 20 per cent cap on the number of low-wage temporary foreign workers a company can hire.

Labour Minister MaryAnn Mihychuk said the controversial temporary foreign worker program needs an overhaul and will announce her plan for more changes later this year.

But for now, the cap, which was set to go down to 10 per cent beginning July 1, will instead stay where it is.

"I believe this is a prudent step to take as we work to develop a better temporary foreign worker policy and fix some of the problems with the program that emerged under the previous government," Mihychuk said in a statement Thursday.

Employers who first began hiring low-wage temporary foreign workers before the previous Conservative government reformed the program will still be able to use it for 20 per cent of their workforce.

Those who started using the program after that point, or who are hiring temporary foreign workers for the first time, are subject to a 10-per-cent cap.

All the other program requirements — including having employers ensuring that Canadians and permanent residents have the first opportunities to apply for available jobs — will remain in place while the cap is frozen.

Meat-processing plants that have been dealing with severe labour shortages will welcome the relief, even if it does not solve all their problems, said Ron Davidson of the Canadian Meat Council.

"Every flexibility helps," said Davidson, noting that temporary foreign workers comprise between 10 and 20 per cent of the workforce at some plants.

"Everything helps. This does not solve the problem, but it all helps."

The Liberal government had already quietly lifted the cap on low-wage temporary foreign workers for seasonal employers, such as seafood processors, earlier this year.

The previous Conservative government overhauled the program in June 2014, phasing in a 10-per-cent cap on the number of temporary foreign workers most businesses can hire and disallowing use of the program in regions of Canada with high unemployment rates.

Those reforms followed a series of controversies dogging the program, including reports of fast-food franchise restaurants favouring temporary foreign workers over local employees.

The Royal Bank also landed in hot water for cutting Canadian jobs while a new supplier it contracted with to provide technical support brought in foreign workers.

The House of Commons standing committee on human resources studied potential changes to the program this spring, but will not release its report until after MPs return to Parliament Hill in September.