On June 20, 2014 Canada’s Temporary Foreign Worker Program (“TFWP”) was overhauled and reorganized into two distinct programs: the TFWP and the International Mobility Programs (“IMP”).

The TFWP will now refer only to the streams under which foreign workers enter Canada at the request of employers, after employers have obtained approval through a new Labour Market Impact Assessment (“LMIA”) (which replaces the Labour Market Opinion (“LMO”)). Employment and Social Development Canada (“ESDC”) will oversee the TFWP.

The IMP (which includes sections previously included in the TFWP) will include those streams in which foreign nationals are not required to obtain an LMIA (formerly called LMO) to be able to work in Canada. Some examples of the work permit streams are: Intra-company Transferee (“ICT”); NAFTA; and GATS. Citizenship and Immigration Canada (“CIC”) will continue to oversee the IMP.

Details of these major changes are described in more detail below. Unless stated otherwise, the changes are deemed to be effective as of June 20, 2014.

Changes to TFWP Include New Screening Requirements for Employers

The LMO will be replaced by the more rigorous LMIA as the screening mechanism for employers seeking to hire foreign workers. The new LMIA will require that employers provide information on the number of Canadians that applied for a particular job, the number of Canadians the employer interviewed and an explanation if Canadian applicants were not hired. Employers must now also attest that they are aware of the rule that Canadians cannot be laid-off or have their hours reduced at a worksite that employs foreign workers.

Employers seeking to hire high-wage temporary foreign workers (with very limited exceptions) will now be required to submit transition plans to demonstrate how they will increase their efforts to hire Canadians, including offering higher wages, investments in training and more active recruitment efforts within Canada.

Wage levels will now replace National Occupational Classification as the main criteria for administering the TFWP, as wages constitute a more accurate reflection of occupational skill level and local labour market conditions. Jobs with wages below the provincial or territorial median wage will be considered “low-wage.” And those with wages at or above the provincial/territorial median will be considered “high-wage.”

Employers with 10 or more employees applying for a new LMIA are subject to a cap of 10 percent on the proportion of their workforce that can consist of low-wage temporary foreign workers. This cap will be applied per worksite of an employer and is based on total hours worked on that worksite. To provide employers who are above the 10 percent cap time to transition and adjust to this new cap, it will be phased in over the next few years.

Applications for the lowest-wage, lowest-skill, entry-level occupations in the food services, accommodation and retail trade sectors will be barred from the TFWP in areas of high unemployment (six percent or higher).

LMIAs for low-wage temporary foreign workers will be reduced from the current two-year standard duration to one-year periods. LMIA extensions can be applied for, but only for one-year periods.

To reinforce the temporary nature of the TFWP, the cumulative period during which general low-wage temporary foreign workers will be allowed to remain in Canada will be reduced. This change will likely be implemented in Summer 2015.

Annex agreements with provinces and territories are being changed so that employers that previously brought temporary foreign workers to Canada through these agreements will now be subject to an LMIA.

LMIA Fees and Processing Times

The LMIA fee is increasing to $1,000 (from the previous $275 fee) for every temporary foreign worker requested by an employer. ESDC is also seeking the ability to impose an estimated $100 privilege fee on employers applying for LMIAs to offset the costs of Government of Canada investments in skills and job training.

Processing time for LMIAs will be shortened to approximately 10 business days for:

  • in-demand occupations (skilled trades);
  • highly paid occupations (top 10%); and
  • short duration applications (120 days or less).

On-farm primary agriculture is exempt from the LMIA fee and the cap on low wage temporary foreign workers, along with the one-year LMIA duration and the reduced duration a low-wage temporary foreign worker will be allowed to remain in Canada. The Live-in Caregiver Program (“LCP”) is exempt from the cap on low-wage temporary foreign workers, the one-year LMIA and the reduced duration in Canada.

Stronger Enforcement and Tougher Penalties on the Way

The number of inspections will increase dramatically, as will the number of program requirements that can be inspected. It is expected one in four businesses employing temporary foreign workers will be inspected by TFWP each year.

The changes include an expanded ability to publicly blacklist employers who have been suspended, are under investigation or have had an LMIA revoked. The government will also have the ability to issue significant monetary fines of up to $100,000. This is significantly higher than the current allowable fine amounts.

Food Services Industry Can Now Access TFWP

As of June 20, 2014, the moratorium on the Food Services Industry’s access to the TFWP has ended.

Reforms to Programs Under IMP

Previously part of the TFWP, the IMPs will refer to those foreign workers who are not subject to an LMIA to obtain a work permit. Some common IMP programs are: Intra-company Transferee; NAFTA; and GATS. Key reforms to the IMP are:

  • Employers of LMIA-exempt foreign nationals will be required to submit job offers directly to Citizenship and Immigration Canada (“CIC”);
  • CIC is introducing a robust monitoring system for employers employing workers through the IMPs on par with the enforcement improvements being made by ESDC for the TFWP. This system will be financed by a new $230 compliance fee per work permit, once authorities are in place. The fee will likely be imposed in Summer 2015 and will apply in cases where the work permit is employer specific and LMIA-exempt;
  • A $100 privilege fee will be imposed on open work permits holders as soon as possible, likely by Summer 2015; and
  • Some changes have also been made to the ICT Specialized Knowledge Category, which are detailed in our previous June 10, 2014 bulletin.