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Minister of Employment and Social Development Jason Kenney speaks in Ottawa on Feb. 28, 2014.

Sean Kilpatrick/The Canadian Press

Restaurants are bracing for significant new limits on their ability to hire temporary foreign workers, but are hoping to avoid a permanent ban.

Employment Minister Jason Kenney promised Sunday that the federal government would unveil more changes to the controversial program within weeks.

"We've been working on this for over a year," Mr. Kenney said at the Sikh New Year parade in Toronto. "I don't want to put a date for certain on it, but it's more like weeks than months."

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Earlier, Mr. Kenney told CTV's Question Period he's reluctant to do anything that might impede the flow of higher skilled labour in a global economy.

"What we need is a balance," Mr. Kenney said. "We need to mend this program, not end it."

Last week, Ottawa imposed a moratorium on the use of the Temporary Foreign Worker program in the food service industry amid allegations of abuse by several McDonald's outlets and a Saskatchewan pizza restaurant.

Among the options, the government could make better use of city-by-city unemployment rates to set different standards for employers across the country, said Dan Kelly, president of the Canadian Federation of Independent Business, whose members include many restaurant owners.

"We are really crossing our fingers that this is not going to be a long-term thing," Mr. Kelly said.

Liberal Leader Justin Trudeau said the Conservatives have made an "absolute mash" of the program at a time when too many Canadians are looking for work. "Now they're trying to dig themselves out of a hole of their own creation," he said.

The moratorium for the service industry will remain in place until the government completes a probe of abuse allegations, Mr. Kenney told CTV. He acknowledged that reforms could force some restaurants to cut hours of operation or even to close.

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"That's unfortunate," he said, "but we need to send a message to them and every other industry that they have to redouble their efforts to hire Canadians."

Employers must work harder to hire Canadians first, even if that means paying higher wages, investing more in training and encouraging prospective employees to move to get a job, according to Mr. Kenney.

But the CFIB's Mr. Kelly urged the government not to use the program to force changes in the labour market. "These are complicated businesses," he said of restaurant chains, which he pointed out must often charge national prices while paying variable wages across the country.

Experts warn the program is ripe for cheating by employers because of inadequate information about local labour markets, said Dominique Gross, a professor of public policy at Simon Fraser University in Vancouver who wrote a recent report on the program for the C.D. Howe Institute. "Employers make a claim of a shortage, but if government doesn't have the information to prove it, there is a problem," she said.

The government could also raise the current $275 per-worker administrative fee, Prof. Gross said. That would force employers to work harder to find workers within Canada, including paying higher wages.

Prof. Gross pointed out that Canada is much more tolerant of companies who use foreign workers to fill low-skilled jobs than most other developed countries. Many European countries use foreign workers mainly to fill high-skilled positions, while allowing them for only a limited number of specific low-skilled jobs experiencing temporary shortages, she said.

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University of Ottawa labour economist David Gray said auctioning temporary foreign worker permits would make the program respond better to real labour shortages. That way, employers with the greatest needs would get foreign workers.

The number of temporary foreign workers has grown rapidly since the early 2000s and has become very popular in the restaurant and hotel industry, particularly in Western Canada. The number of new foreign entrants more than tripled between 2002 and 2012 – to 338,000, up from 101,000. Add in foreign workers already in the country on longer contracts and the number reaches nearly half a million.

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