Canada’s Temporary Foreign Worker Program Overhauled: New Wage Standards and Stricter Regulations Announced

Canada’s Temporary Foreign Worker Program Overhauled: New Wage Standards and Stricter Regulations Announced

Changes to Wage Requirements for High Wage LMIA Stream

On October 21, 2024, Randy Boissonnault, Canada’s Minister of Employment, Workforce Development, and Official Languages, announced additional updates to the Temporary Foreign Worker Program (TFWP). These reforms are designed to protect Canadian workers while addressing labour market needs, encouraging employers to prioritize hiring Canadians. The updates will introduce higher wages for temporary foreign workers (TFW) and more stringent hiring regulations.

Key Changes to the Temporary Foreign Worker Program

Wage Increases for High-Wage Stream Workers

Starting November 8, 2024, employers hiring TFWs under the high-wage stream must pay at least 20% above the provincial median wage for the province or territory where the work will occur. Previously, the threshold to determine whether an LMIA was in the high or low wage stream was the rate in comparison to the provincial median wage. Now, instead of high-wage positions being at the median wage for the province, they must meet that higher than 20% threshold.  This change particularly affects lower TEER/lower-skill positions, where the prevailing wage may not meet the new threshold. Positions in managerial and professional occupations may not see significant impact as these may already have prevailing wages above 20% of the provincial median wage.  Employers are encouraged to review the pay structure of current TFWs employed under high-wage LMIAs to consider potential salary increases ahead of LMIA renewals.

The federal government estimates that these changes will affect up to 34,000 workers across Canada, leading to hourly wage increases of approximately $5 to $8 CAD for high-wage stream positions, depending on the region. 

If an employer is unable to meet the new wage requirements for the high-wage threshold, then they will have to assess whether the recruitment can be done as a low-wage position. Considering the recent changes to the low-wage stream of the program, this may not be an option for some employers.

Wage Requirements by Province/Territory (as of November 8, 2024):

New Business Legitimacy Requirements

The announcement also set out that effective October 28, 2024, the program will no longer accept attestation letters from CPAs and lawyers as proof of business legitimacy. Previously, employers could submit attestations from accountants or lawyers,as proof that have the financial capability to pay the foreign worker for the duration of their employment.  Instead, employers must now demonstrate this with other application documents such as:

• A valid business license from their municipality, province, or territory
• The most recent T4 Summary of remuneration paid
• The most recent T2 Schedule 100 (Balance Sheet) and T2 Schedule 125 (Income Statement)

To further verify business legitimacy, the government will collaborate with provincial and territorial registries through data-sharing agreements.

Employer Actions and Considerations

As these new rules take effect, employers should adjust their recruiting strategies and wage offerings accordingly. Key takeaways for employers:

• Review LMIA Recruitment Timeline: If advertising for an LMIA position with a salary above the provincial median but below 20% of that figure, aim to complete the recruitment phase and submit the LMIA before November 8, as the new policy will not apply to applications filed before this date if possible.
• Adjust Wage Offers: If recruiting for an LMIA but still need to complete the minimum four weeks before November 8, consider increasing the offered wage to at least 20% above the provincial median to qualify for a high-wage LMIA.
• Increase Wages for Current TFWs: Review the pay structure of TFWs employed under high-wage LMIAs and consider necessary salary increases to meet the new threshold before any LMIA renewals.
• Support TFW Transition to Permanent Residency: Consider steps to help TFWs transition to permanent resident status before filing new LMIAs, which could mitigate the need for additional LMIA applications.

Conclusion

The recent updates to the TFW Program represent Canada’s ongoing efforts to balance the labour market needs with the rights and protections of both Canadian and temporary foreign workers. 

As labour market conditions continue to evolve, employers must stay updated to comply with these new regulations and ensure their businesses remain competitive.

If you’re an employer or a temporary foreign worker concerned about how these new changes might impact your hiring plans or employment, we’re here to assist. Our team will help you understand the implications of these policy shifts, guide you through the application process, and ensure compliance with the new regulations.

Contact us today to schedule a discovery call to ensure your business or employment aligns with the latest changes in the TFW Program.

The Team at Northern Connections Canada