Upcoming Changes to Temporary Foreign Worker Program to Increase Minimum Wage Requirements for High-Wage Workers

The federal government is set to introduce a significant change to the Temporary Foreign Worker Program (TFWP), specifically targeting the high-wage stream. In a move aimed at encouraging employers to hire more Canadian workers, Employment Minister Randy Boissonnault is expected to announce a boost to the minimum hourly wage required for temporary foreign workers under the program.

What is the High-Wage Stream?

Currently, under the Temporary Foreign Worker Program’s high-wage stream, employers seeking to hire foreign workers must pay at least the median hourly wage of the province where they operate. This requirement is part of the Labour Market Impact Assessment (LMIA) process, which is designed to ensure that employers only hire foreign workers when there are no available Canadian workers to fill the positions.

However, starting November 8, the minimum wage threshold will be increased. Employers will soon be required to pay 20% above the provincial median hourly wage, a significant jump from the current requirement.

How This Change Impacts Employers and Workers

For example, in Ontario, the current median hourly wage for high-wage workers is $28.39. Under the new rules, employers will need to pay at least $34.07 per hour to hire foreign workers in this stream. This change is expected to affect approximately 34,000 workers under the high-wage stream, although existing work permits will not be impacted until they are up for renewal.

Government’s Rationale

The federal government has faced criticism for its increasing reliance on temporary foreign workers, which some critics link to housing shortages and a rising cost of living in Canada. By raising the wage threshold, the government hopes to create incentives for employers to hire Canadian workers instead of relying on temporary foreign labor.

Temporary Foreign Worker Program: A Growing Trend

Temporary foreign workers are an essential part of Canada’s labor market, particularly in sectors where there are significant worker shortages. In 2023, 183,820 temporary foreign worker permits were issued, an increase of 88% compared to 2019 when 98,025 permits were issued. This growing number of temporary foreign workers has sparked concerns about its potential impact on Canadian workers and resources.

Other Restrictions and Rule Changes

The upcoming wage increase is part of a broader strategy by the Liberal government to tighten the eligibility rules for temporary foreign workers, as well as other categories of temporary residents such as international students. These measures include:

• Caps on the percentage of low-wage foreign workers in certain industries.
• Restrictions on work permits in metropolitan areas with high unemployment rates.

Notably, temporary foreign workers in the agriculture sector are not subject to these new rules or previous changes to the program, reflecting the sector’s unique reliance on foreign labor.