The federal government is considering whether to block employers in certain regions and industries from accessing the Temporary Foreign Worker Program, which companies have increasingly used to fill positions despite a rising unemployment rate.
Employment and Social Development Canada convened a meeting with business groups on Tuesday, where it outlined how the department is trying to reduce the use of temporary foreign workers, according to a press release.
Employment Minister Randy Boissonnault told the groups that he’s mulling whether to stop processing some employers’ applications to hire foreign workers through the low-wage stream of the program. “If implemented, this would prevent employers in certain areas and industries from using the TFW Program,” the release said. The government department declined to share which business groups attended the meeting.
If such policies went into effect, they would mark a significant departure for the federal government, which has expanded employers’ access to temporary foreign workers in recent years.
As part of a 2022 overhaul of the program, Ottawa allowed companies in most industries to fill up to 20 per cent of their positions through the low-wage stream of the TFW program, up from 10 per cent. (A 30-per-cent cap still applies to the health care and construction industries.) Moreover, employers in the hospitality and retail industries can use the program to hire certain low-wage occupations when local unemployment rates are 6 per cent and higher, where previously they could not.
Employers still turning to low-wage foreign workers, even as unemployment rises
The federal government said these moves were aimed at easing labour shortages, although many economists criticized the policies over the potential for wage suppression and exploitation of foreign workers, who have weaker labour rights than permanent residents and Canadians.
Employers have subsequently ramped up their recruitment of foreign labour, particularly in the low-wage stream. Cooks, food counter attendants and construction workers are among the low-wage employees in high demand.
At the end of 2023, nearly 190,000 people held valid work permits through the TFW program, an increase of 157 per cent from 2019. The program accounts for a small portion of temporary foreign labour in the country; for example, international students and people with postgraduate work permits are a large and growing cohort of workers in the Canadian economy.
The country’s soaring population growth – largely fuelled by temporary immigration – is colliding with a weakening labour market. The unemployment rate has risen to 6.4 per cent, and it’s taking longer for recent immigrants and young people to find jobs.
Tuesday’s news release said the government is applying “a stricter and more rigorous oversight” of employer applications to use the TFW program and when conducting inspections of companies using such labour.
“The TFW Program cannot be used to circumvent hiring talented workers in Canada, and the federal government will take further action to weed out misuse and fraud within the system,” the release said.
Editor’s note: This article has been updated to provide more details on the rules for hiring low-wage workers in hospitality and retail when unemployment rates are 6 per cent and higher.